Zhipu AI Disbands Key Product R&D Center Amid Listing Plans and Strategic Shift

October 17 – Blue Whale News — Chinese AI company Zhipu AI has undergone a major internal restructuring, dissolving its 60-member Product R&D Center under the commercial division at the end of September. The move comes as the company prepares for an IPO and seeks to balance its consumer (To C) and enterprise (To B/G) business strategies.

An employee involved in several delivery projects told Blue Whale Tech that the Product R&D Center had handled critical tasks such as domestic chip adaptation and multi-model integration. “The team’s performance in the first half of the year was solid, with multiple private deployments already in place and many new orders lined up,” he said, adding that staff were shocked by the sudden decision.

Swift Internal Shake-Up
The adjustment took place around September 23. Employees were informed verbally that the department would be disbanded, followed by individual HR meetings for same-day termination and settlement. There were no internal announcements or official emails. Departing staff received compensation based on the “N + 1” formula, and were required to sell back company shares at the original grant price.

Documents reviewed by Blue Whale Tech confirmed the official reason: “Your department and position have been eliminated due to internal restructuring, and there are currently no alternative positions available.” Roughly half of the 60 employees have since left, while the rest were reassigned to delivery teams. Other departments such as sales and solutions also experienced minor adjustments. Zhipu currently employs about 1,000 people, including contractors.

This marks Zhipu’s second major reorganization in 2025. The first occurred in late June when COO Zhang Fan resigned to start a new venture. Following his departure, the company merged its To B and To G business lines, and placed sales, product R&D, and delivery teams under CEO Zhang Peng.

Strategic Refocus, Not Retreat
The now-dissolved Product R&D Center was part of Zhipu’s commercial division — the company’s main revenue engine serving government and enterprise clients. Its core responsibilities included developing private large-model solutions and maintaining Zhipu’s Model-as-a-Service (MaaS) platform for customized enterprise models.

Industry insiders say the move may signal a strategic realignment rather than retreat. “The private AI market is becoming increasingly competitive. Long-term success depends less on manpower-heavy delivery and more on product standardization, ecosystem partnerships, and cost control,” one AI executive told Blue Whale Tech. “This looks like Zhipu tightening its focus to improve efficiency and profitability before going public.”

Betting on Z.ai as Consumer Pivot
Zhipu’s overall product portfolio spans three lines:

• BigModel, its open API platform;
• Consumer products, including Qingyan, Z.ai, the multimodal Animal Circle, and AutoGLM;
• Commercial solutions for To B and To G clients. The company’s AI Institute leads research and model development, while its Engineering Institute handles core infrastructure.

In December 2024, former Alibaba Damo Academy expert and Alipay China’s Chief Data Officer Hu Yunhua joined Zhipu to lead Qingyan, once the company’s fastest-growing product with more than 25 million users. After DeepSeek’s open-source release earlier this year, however, the consumer AI market cooled, and Qingyan’s monthly active users dropped from 10.4 million in March to 7.1 million in September.

Zhipu is now shifting focus to Z.ai, which has seen rapid growth. According to AI Product Rankings, Z.ai recorded 3.47 million monthly visits in August — a 219% surge, ranking first globally in growth rate. “The company’s foundation remains in commercialization,” one employee said. “We’re trying to break into the consumer market, but it’s a tough path.”