On 17 July, Moonshot AI, a Chinese startup, launched a new model called Kimi K3, capturing global attention overnight after the model was recognized as having standards comparable to top U.S. models from companies like OpenAI and Anthropic.
Previously, Moonshot AI was seen as an AI developer operating under the shadow of DeepSeek. This new model's launch thus surprised the market. Furthermore, according to a report on 19 July, the company announced plans to file for an initial public offering (IPO) soon, shaking the AI industry once again.
Since Moonshot AI's announcement, investors in the AI stock market have begun to realize that Chinese businesses are catching up closely with U.S. firms and continuously capturing market share, causing related stocks to immediately drop following the news.
Over the past week, AI-related stocks have experienced significant volatility in both Chinese and U.S. markets. Despite forecasts of earnings growth by AI companies by thousands or even tens of thousands of times, investors view these stocks as increasingly risky due to the huge investments companies plan to make, while Chinese AI models are now demonstrating performance comparable to major U.S. models.
Moonshot AI is a Chinese startup founded in early 2023 by Yang Zhilin, a former Tsinghua University professor who previously worked with Meta and Google and holds a PhD from Carnegie Mellon University.
When DeepSeek first disrupted the market, Yang became a prominent figure in China's AI scene due to his numerous research papers and academic work on Natural Language Processing (NLP).
When founding his own company, Yang aimed to challenge OpenAI's models, attracting significant investor interest and funding. Soon, Moonshot AI's valuation soared past $20 billion.
The startup's popularity stems from its Kimi model series, which represents ChatGPT in China. The company now plans to raise an additional $2 billion, potentially increasing its valuation to $30 billion, making it one of China's major AI firms.
Regarding revenue, the company expects annual income to reach $300 million, up from $200 million in April, mainly driven by growing demand for AI models and increased AI chatbot usage.
Currently, the company's business model primarily generates revenue from subscription services for the Kimi chatbot, offering multiple usage packages, and from providing AI models for enterprise clients by integrating its large language models into various organizational systems and services.
According to Bloomberg, Moonshot AI is preparing to list on the stock exchange, potentially within the next six months.
The company has officially sent shareholder resolutions to investors to approve listing on the Hong Kong stock exchange. Moonshot AI is currently restructuring its organization to prepare for the IPO.
This IPO push comes amid increased Chinese government support for the domestic AI industry. President Xi Jinping praised China's progress in developing low-cost AI and called for a more open global technology system.
However, the Chinese government has also introduced policies making it harder for Chinese firms to list abroad, as seen when the Manus deal with Meta was blocked, preventing the acquisition by a major U.S. tech company.
Meanwhile, DeepSeek plans to go public in mainland China by the end of this year and is currently raising funds to support AI technology development and expand global services at prices lower than U.S. competitors.
Moonshot AI states that Kimilatest versionis especially outstanding in coding, one of the highest-revenue markets among leading AI model developers.
Kimi K3, launched last week, is a new open-weight AI model that the company claims is second only to Anthropic's Claude Fable 5 and OpenAI's GPT-5.6 in overall capability.
Demand for Kimi K3 surged rapidly within 48 hours of launch, and many analysts expressed strong satisfaction with the new model, prompting the company to temporarily suspend new subscriptions to allocate computing resources for current users first.
Currently, U.S. AI companies like OpenAI and Anthropic have invested hundreds of billions of dollars combined into AI infrastructure for training and serving models, with much of this investment flowing to AI chip manufacturers.
Coding services are highly profitable and a major revenue source for Anthropic and OpenAI before their planned IPOs. Therefore, if Moonshot can offer similarly effective or competitive alternatives, it could challenge U.S. competitors' business models and advantages.
Additionally, Chinese AI companies compete aggressively on price, setting service fees significantly lower than U.S. rivals.
Data from the ranking website Artificial Analysis shows substantial differences in average AI processing costs:
However, Moonshot's latest Kimi K3 model has a higher average cost of about $0.95 per task. Although still below U.S. competitors, this premium pricing reflects the company's confidence in the model's performance compared to other Chinese AI models.
Source: Bloomberg [1][2],WSJ,TechCrunch
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