StepFun Races Toward Hong Kong IPO With Near-$2.5B Raise at $10B Valuation

StepFun, the Shanghai-based artificial intelligence startup founded by former Microsoft vice president Jiang Daxin, has raised nearly $2.5 billion in what is being described as the largest single funding round ever completed by a Chinese AI company — a capital injection that values the firm at roughly $10 billion post-money and sets the stage for a Hong Kong stock market debut.

The megaround caps a remarkable six months for the two-year-old foundation-model developer. In January, StepFun closed a B+ financing exceeding RMB 5 billion (about $718 million), which at the time was the largest single raise in China's large-model sector in a year. The company has now nearly quadrupled that with a raise that dwarfs the debuts of newly listed AI rivals.

Tearing up the VIE structure

Ahead of the listing, StepFun is dismantling its variable interest entity (VIE) structure — the offshore arrangement long used by Chinese tech firms to court foreign capital — a move that reflects both regulatory shifts and the growing pool of domestic capital eager to back homegrown AI champions. Its cap table reads like a who's-who of Chinese finance: Tencent Holdings, Qiming Venture Partners, and 5Y Capital have followed on, joined by state-linked backers including China Life Private Equity Investment, Shanghai's leading industrial funds, and Pudong Venture Capital.

Models, agents, and terminals

StepFun's pitch centers on foundational model development paired with an "AI-plus-terminal" strategy — embedding its models directly into devices and building autonomous agents that can act on users' behalf. The fresh capital will fund training of a major new base model and accelerate the rollout of terminal-based agents, an area where Chinese firms are moving quickly to differentiate from pure chatbot plays.

The raise underscores a wave of Chinese AI companies rushing toward Hong Kong listings in 2026, as founders seek liquidity and a domestic-friendly path to public markets amid tightening cross-border capital flows. StepFun's June IPO target puts it among the first of the country's marquee model labs to test public investor appetite at scale.

If the listing lands near its $10 billion valuation, StepFun would become one of Asia's most valuable pure-play AI companies — and a proof point that China's foundation-model contenders can raise Silicon Valley-sized war chests almost entirely from home capital.