http://Z.ai reported a 400% year-on-year increase in first-half revenue to RMB 954 million ($142 million), but the Chinese AI company remains loss-making.
The growth was driven mainly by cloud-based deployment services, where revenue jumped 2,736% to RMB 825 million（USD123million), accounting for 86.5% of total revenue as http://Z.ai shifts from customized, on-premise services toward cloud APIs and subscription-based AI agents.
Gross profit rose 164% to RMB 252 million(USD37.4million), but gross margin fell from 50% to 26.4% as cloud inference carries much higher computing costs. http://Z.ai's total loss for the six months ended June 30 narrowed 12.1 per cent to RMB 2.07 billion(USD308million), adjusted net loss increased 12.1 per cent to USD1.96 billion(USD291million), R&D spending rose 33.6% to RMB 2.13 billion(USD317 million).
Meanwhile, ARR reached USD1.6 billion by the end of August, twice the domestic competitor MiniMax’s USD800 million, while registered users surpassed 7.4 million.
http://Z.ai is growing remarkably fast, but its numbers also show the challenge facing AI companies: turning rapidly growing usage into sustainable profits.