Short positions in Hong Kong-listed AI model companies MiniMax and Zhipu AI have reached historical highs, according to S&P Global data. Shares sold short represent about 20% of MiniMax’s free float and roughly 6% of Zhipu’s. MiniMax is due to release its half-year report after the Hong Kong market closes on Aug. 26, while Zhipu is scheduled to report on Aug. 31. Both companies were heavily promoted after listing earlier this year and remain above their IPO prices, with Zhipu up more than 800% and MiniMax more than 80%, but both have fallen by more than half from their peaks. Their shares also dropped about 24% and 18%, respectively, after the launch of Kimi K3 in July. Zhipu’s subsequent release of GLM-5.3 failed to produce a clear rebound, despite Jefferies saying its performance was close to Kimi K3 while its cost per task was about 19% lower. The July expiry of IPO lock-ups released 25.68 million Zhipu shares and 150 million MiniMax shares, worth about $11.5 billion at the time. Southbound investors have increased their holdings to about 12% of Zhipu and 8.1% of MiniMax, but the buying has not restored either stock. Hedgeye says price competition is limiting Zhipu’s ability to raise prices and expand margins, while MiniMax is challenged by its position as neither the most capable nor the cheapest provider. The half-year results will test whether pure-play large-model companies can become profitable as competition makes AI services increasingly inexpensive.