The Scarcity Premium Behind China's AI Valuation Puzzle

Chinese AI startups Zhipu and MiniMax have seen their share prices surge dramatically in 2025, even as established tech giants Alibaba and Tencent — actively deploying AI across their platforms at scale — trade below their year-start levels. This valuation disconnect is less about technology and more about market structure. With most leading global AI developers still privately held, the handful of publicly listed Chinese AI pure-plays have become rare vehicles for investors seeking direct exposure to frontier AI. The resulting scarcity premium mirrors what played out in US markets with names like Palantir and C3.ai.

The scarcity premium is real. But it is also, by definition, temporary. As more AI companies list, as private markets open up new access points, and as the incumbents begin to demonstrate measurable AI-driven revenue growth, the relative attractiveness of these positions will shift. The question for investors is whether they're paying for technology or for the lack of alternatives — and whether they'll still want to own the position when that scarcity fades.

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