Moonshot AI unveils massive open model despite US chip curbs
Moonshot AI has released a 2.8-trillion parameter open model that approaches the performance of leading US systems, signaling that software innovations are mitigating the impact of Washington's semiconductor export controls.
Moonshot AI on Friday launched Kimi K3, an open-weight artificial intelligence model with 2.8 trillion parameters. The Chinese startup claimed the release represents a "new frontier of intelligence," directly challenging proprietary systems from OpenAI and Anthropic.
While Moonshot conceded that Kimi K3 still trails Anthropic’s Claude Fable 5 and OpenAI’s GPT 5.6 Sol in overall performance, it argued the model achieves "frontier-level" results. The company stated the model outperformed earlier iterations of GPT and Claude, as well as SpaceXAI’s Grok. In specific coding and general agent benchmarks, Moonshot added that Kimi K3 "performed competitively" with Fable 5 and "substantially outperformed" Claude Opus 4.8, Sol, and GPT 5.5.
The release carries significant implications for global technology markets, demonstrating that Chinese developers are compensating for hardware disadvantages through software efficiency. Bank of America analysts noted in a recent report that Moonshot achieved these advancements by refining model training and design, rather than relying on the most advanced semiconductors.
US export controls have heavily restricted Chinese firms' access to top-tier AI chips, such as Nvidia’s H200. Although the US Commerce Department recently approved limited exports of these processors, approvals remain scarce and tightly licensed. The US has also alleged that some Chinese companies are smuggling banned chips, while others have sought to bypass restrictions by renting overseas computing power or buying processors through foreign subsidiaries.
Moonshot’s ability to compete despite these structural constraints has attracted significant capital from major tech players. Backed by Alibaba and Tencent, the startup raised roughly $2 billion in its latest funding round to reach a valuation exceeding $20 billion. This represents a stark valuation spike from a $10 billion round earlier this year and a $4.3 billion raise at the end of last year.
The company is translating this hype into commercial revenue. Moonshot reported in April that annual recurring revenue surpassed $200 million, driven by growing subscriptions to Kimi and its other AI services. By offering an open-weight model—allowing developers to download and modify the underlying code much like Meta’s Llama—Moonshot is attempting to build a developer ecosystem that can rival the closed architectures dominating the US market.
