UBS has released a research report indicating that Chinese AI models are gaining greater global recognition due to narrowing capability gaps and cost advantages. However, recent developments have made the competitive outlook more complex, weighing on the momentum of publicly listed model companies.

The firm maintains a Buy rating on both MiniMax-W (00100) and Z.AI (02513). The bank notes that the evolving regulatory environment, including discussions on potential restrictions for open-weight models, is adding uncertainty to overseas adoption.

Meanwhile, global leaders are tightening anti-distillation measures, and US policy is paying closer attention to industrial-scale distillation, raising questions about the pace of capability catch-up. The cost-efficiency advantage is also becoming increasingly task-dependent, particularly for complex, long-horizon tasks where overseas frontier models can partially offset their per-token price premium through higher token efficiency and task success rates.

The bank believes Chinese AI labs are expanding their overseas footprint, including MiniMax's global enterprise adoption, vertical fine-tuning, and cloud deployment partnerships, as well as Z.AI's recent collaborations with global cloud providers and the debut of Kimi K3 on AWS Bedrock. These moves help better monetize the rising global adoption of open-weight models.

UBS expects continued deflation in per-token prices at the scale end, while pricing power at the capability frontier will prove more durable. Recent funding rounds for Chinese labs also support expanded compute capacity, enabling the training of next-generation, larger-scale models.

The bank believes sustained model releases may help repair investor sentiment, with potential catalysts including DeepSeek V4.1 Pro, Kimi K3.1, MiniMax M3 Pro, and Z.AI's GLM-5.5/6.0.