Can China’s AI IPOs give OpenAI and Anthropic courage?
If Z.ai and MiniMax's IPOs go well, American AI labs will be heartened
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Things That Matter
On messaging and timing: After xAI’s Grok model was used to “create sexualized images of women and minors,” the company said that it has “identified lapses in safeguards and are urgently fixing them.”
The problem arose when Grok released a new feature that allowed users to edit images posted on X without requiring permission from their original poster. Suddenly, any picture posted to X was fodder for AI editing whims, and predictably many abused the capability.
The company’s response, and comments from its owner, that using Grok to create illegal content would “suffer the same consequences as if they upload illegal content,” did not mollify anyone, and nor did Grok itself confessing its actions. Entire nations including India, the EU, the UK, France and Malaysia are incensed.
xAI unveiled new subscription tiers for Grok business customers on December 30. Grok Business (SMB-focused) will cost $30 per month, while the higher-grade Grok Enterprise is not priced publicly.
To successfully compete with Anthropic and OpenAI, xAI will need to sell lots of Grok to lots of businesses. Progress in that direction is good, but becoming a global magnet for CSAM generation is not.
There are good arguments for adopting a light-touch approach to AI regulation. Handing opponents of light-touch AI regulations this type of ammunition is an impressive own-goal.
A few words on Venezuela: CO is not a foreign-policy-focused publication. Still, the United States’ recent decision to capture, transport and now arraign Venezuela’s erstwhile premier Nicolás Maduro is a potentially pivotal moment in the Americas.
The tech-right have been beating their communal chest, arguing that anyone not “celebrating” the end of Maduro “hate[s] the West,” and are calling for getting “rid of socialism at home” next.
The atmosphere on X currently is reminiscent of the political right after the Iraq war was launched (speaking as someone previously of that political persuasion).
There’s consensus that Maduro was a miserable leader who clung to power illegally across the political spectrum.
But not everyone agrees why the United States took him out (and what comes next). The States’ VP framed the actions as merely a great power taking back its economic assets seized decades ago, and some right-leaning commentators argued that using military might to secure resources is acceptable. The commerce secretary posted that POTUS intends to “fix the broken Venezuelan economy and rebuild the country.” Trump himself claims that Venezuela stole the US’ oil.
What matters for our purposes is that the United States is taking an increasingly aggressive posture in its vicinity. Consider this another plank rotting out from under the NATO world we’ve long known. Over a longer time horizon, I expect US technology products to slowly cede their grip on the European market as the two blocs separate. The Greenland issue is proving to be another wedge.
Can we talk about startups now?
Cybersecurity starts 2026 on a hot note: Kicking off the 2026 startup news cycle are two potential M&A transactions in the cybersecurity space: Palo Alto Networks may purchase Koi for $400 million, and Cisco is working to buy Axonius for $2 billion.
Koi (endpoint security) had raised $48 million while independent, and counts Battery Ventures, Team8, and NFX on its cap table.
Axonius (digital asset control and security) has raised nearly $900 million, and was last valued at around $2.6 billion.
Both companies have roots in Israel, adding points to the board for the country’s cybersecurity footprint. I expect cybersecurity to have another cracker year. Cyera was a good exemplar of the industry in 2025, growing quickly and raising several rounds in a single year. Which startup will be 2026’s Cyera?
Can China’s AI IPOs give OpenAI and Anthropic courage? Continuing our look at Chinese AI IPOs, here’s Bloomberg:
MiniMax plans to price its Hong Kong initial public offering at the top of the marketed range, people familiar with the matter said, reflecting investor enthusiasm for Chinese startups that are increasingly challenging US rivals like OpenAI.
You can read our short primer on MiniMax’s AI models and IPO fundamentals here. What matters for our context is that a Chinese AI company is about to go public with minor revenues and stark losses to seemingly cheery local investors.
There’s gold in them (IPO) hills. At least in Hong Kong.
With both Z.ai and MiniMax looking to list in short order, the world will have access to the regular financials of at least two leading AI labs. If both IPOs go as well as the early enthusiasm indicates, American AI labs will be heartened to try their own luck at the public markets. They do have, after all, many times the revenue of their Chinese rivals, and they need more money!