Jul. 20 at 5:40 PM
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From Bloomberg on Friday:
"China’s Moonshot Unveils AI Model, Fueling Tech Rout"
Chinese AI pioneer Moonshot unveiled a new model that it claims performs on par with some of the top-tier platforms from OpenAI and Anthropic PBC, the latest sign that the Asian country’s artificial intelligence labs are closing a technology gap with the US.
Moonshot released Kimi K3 Friday, touting benchmarks comparable to some of the US labs’ best offerings. The model is open weight, meaning its parameters are available for users to download and customize, and outperforms all rivals except Anthropic’s Claude Fable 5 and OpenAI’s GPT-5.6 on overall capability, it said.
Moonshot’s latest platform underscores how rapidly China’s AI race is evolving beyond a competition on price alone. Moonshot priced Kimi K3 at roughly Anthropic Sonnet levels, showing the company believes it can charge a premium to other Chinese models given its capabilities.
The startup also claimed it surpasses local rival Z.AI’s most advanced offering on coding tasks. Those are among the most lucrative offerings by advanced model companies, driving revenue for Anthropic and OpenAI ahead of their planned initial public offerings. If Kimi can undercut them on price and achieve similar results, that could upend the business case for its rivals in the US and China.
Shares of its Chinese rival tumbled 28% in their biggest slide since listing, while MiniMax Group Inc. slid 16%. The declines came amid a broader selloff in Asian technology stocks, with investors concerned about whether a yearslong AI-fueled stock rally has become overstretched. The tech-heavy Nasdaq 100 Index closed down 1.5%, finishing its worst week in almost a month.
The K3 model is “brilliant,” said Leonid Mironov, a portfolio manager at Gavekal Capital Ltd. “In my use, it’s clearly the best Chinese model ever.”
The performance of Kimi K3 came as a surprise to the market and raised concerns over Z.AI’s competitive position. Moonshot said the model has 2.8 trillion parameters and a 1 million token context window, gauges of its capability. Artificial Analysis ranked Kimi K3 ahead of Anthropic’s Opus 4.8 on some frontier benchmarks, making it the first Chinese open-weight model to achieve that milestone.
Whenever there is a new AI model, the existing ones get hit because of concerns about competition, said Steven Leung, executive director at UOB Kay Hian.
The move also comes as Beijing steps up support for domestic AI development, with President Xi Jinping hailing China’s advances in low-cost artificial intelligence while calling for a more open global technological order.
Chinese models have already put pressure on the frontier models by offering pricing that is far below what’s available from OpenAI and Anthropic. The weighted average cost of performing a standardized intelligence task using DeepSeek’s V4 Flash model costs just 2 cents, compared with
$2.75 for the same task on Anthropic’s Claude Fable 5, according to benchmarking site Artificial Analysis.
DeepSeek just completed a record
$7.4 billion fundraising and is planning an initial public offering in 2027, giving it more capital to develop AI services and offer them globally at prices far below US rivals.
**Cheap AI is Changing the Race**
DeepSeek and other Chinese models deliver frontier-level performance at a fraction of the cost of many leading US rivals.
Meanwhile, Z.AI is on track for annual recurring revenue of
$1 billion, people familiar with the matter said.
