Kai-Fu Lee's 01.ai is raising a pre-IPO round ahead of a planned Hong Kong listing in 2027, the former Google China chief told Bloomberg at the World AI Conference in Shanghai. The company is unwinding its offshore holding structure, the same prerequisite that Moonshot dismantled in May to clear its own path to a Hong Kong debut. Lee said the funding round would close around the time 01.ai publishes its first annual results. The fiscal year ends in December.

The story behind the IPO is a strategic retreat that turned into a business. Lee founded 01.ai in 2023 to build frontier AI models and raised it to a $1 billion valuation with backing from Alibaba's cloud unit. Then DeepSeek's open-weight releases collapsed the economics of model training. Lee conceded the race. “Only a handful of companies with essentially bottomless balance sheets could still justify the cost of building models from scratch,” he told Bloomberg. “Everyone else needed a new business model.”

His answer is enterprise data infrastructure. 01.ai no longer builds foundation models. It fine-tunes existing Chinese open-weight models, DeepSeek, Alibaba's Qwen, Z.AI's GLM, and wraps them in software that organises a client's scattered data pools so executives can query and visualise them instantly. Lee calls the product “Boss AI” and describes 01.ai as “the Palantir of China.” The software deploys on-premises rather than in the cloud, because enterprise buyers increasingly insist on keeping sensitive data in-house. Roughly half of 01.ai's business now comes from outside China, spanning Asia, Europe, and South America. Lee ruled out the US market, saying buyers there remain wary of Chinese software.

01.ai has about 240 employees, lean by AI startup standards. It was one of China's original “AI Tigers” alongside Z.AI, MiniMax, StepFun, DeepSeek, and Moonshot. Of that group, Z.AI and MiniMax have already listed in Hong Kong. Moonshot plans to list within six months at a $30 billion valuation. DeepSeek is planning a 2027 IPO. Lee's pivot means 01.ai will arrive on the exchange with a fundamentally different pitch: not a model builder competing on benchmarks, but an enterprise software company competing on revenue. Whether the market values that humility or punishes it is the question the IPO will answer.