A report released on June 25, 2025, indicates that Chinese AI startup Zhipu AI has made progress in securing government contracts across multiple regions, according to OpenAI.

This development underscores China’s efforts to establish itself as a global leader in AI.

Zhipu AI, supported by the Chinese government, provides AI solutions such as large language model infrastructure and hardware.

The company collaborates with Huawei to serve governments and state-owned enterprises in countries including Malaysia, Singapore, the UAE, Saudi Arabia, and Kenya.

It has reportedly received over US$1.4 billion in state funding and maintains close ties with Chinese state entities, according to OpenAI.

Zhipu AI has not yet commented on the report.

In January, Zhipu AI was added to the US Commerce Department’s export control entity list, limiting its access to US components.

.source-ref{font-size:0.85em;color:#666;display:block;margin-top:1em;}a.ask-tia-citation-link:hover{color:#11628d !important;background:#e9f6f5 !important;border-color:#11628d !important;text-decoration:none !important;}@media only screen and (min-width:768px){a.ask-tia-citation-link{font-size:11px !important;}}

🔗 Source: Reuters

🧠 Food for thought

1️⃣ China’s AI export strategy follows a coordinated national roadmap

Zhipu AI’s government contracts are part of China’s long-term AI strategy outlined in the 2017 New Generation Artificial Intelligence Development Plan (AIDP), which explicitly targets global leadership by 20301.

This coordinated approach combines massive state funding with private sector innovation. Zhipu’s $1.4 billion in state investment mirrors how China has mobilized resources, with some regional governments individually committing up to 100 billion yuan (~$14.7 billion) to AI development1.

The targeting of Malaysia, Singapore, UAE, Saudi Arabia, and Kenya reflects China’s strategic focus on establishing AI infrastructure in emerging markets before Western competitors, creating long-term technological dependencies2.

This approach aligns with China’s broader ambition to establish self-sufficient AI capabilities while reducing reliance on American technology, a goal repeatedly emphasized by President Xi Jinping, who has stressed the importance of “securing critical technologies domestically”3.

2️⃣ China’s “National AI Team” model creates formidable competitors

Zhipu AI represents a successful implementation of China’s distinctive “National AI Team” approach, where the government designates and supports specific companies to advance strategic technologies4.

This public-private partnership model, formalized through National New Generation Artificial Intelligence Open Innovation Platforms, allows designated companies to access preferential policies, funding, and data resources while aligning with national objectives4.

The effectiveness of this approach is evident in how quickly Chinese AI firms have narrowed the performance gap with Western counterparts. Stanford research shows differences in AI model capability have shrunk from double digits to near parity in recent years5.

This coordinated ecosystem has created a wave of competitive AI unicorns alongside Zhipu, including Moonshot AI, MiniMax, 01.ai, and Baichuan AI, all valued at over $1 billion and challenging Western dominance in specific AI domains6.

3️⃣ Global AI competition has entered a new phase of techno-nationalist positioning

OpenAI’s highlighting of Zhipu AI reflects the evolving nature of global AI competition, where companies increasingly serve as proxies in national technological rivalries2.

The U.S. adding Zhipu AI to its export control entity list in January demonstrates how AI development has become entwined with national security concerns, creating a feedback loop of restrictions and self-sufficiency efforts2.

This competitive dynamic is reshaping market positioning, with Zhipu AI deliberately marketing itself as a “responsible, transparent and audit-ready” alternative to American AI systems while providing sovereign infrastructure solutions designed to operate independently of U.S. technology7.

The competition now extends beyond technical capabilities to include regulatory approaches, with both Chinese firms and OpenAI developing “sovereign AI capability” offerings for governments, reflecting how AI governance models themselves have become competitive battlegrounds2.

……