China's Moonshot unveils world's largest open AI model, closing in on US rivals
Companies including Moonshot, Z.ai and MiniMax are releasing increasingly powerful models at sharply lower costs, challenging long-held assumptions in the West that Chinese developers trail their American peers by months.
Chinese AI startup Moonshot on Friday (17 July) unveiled Kimi K3, a 2.8 trillion-parameter model that it said is the world's largest open-weight AI system and delivers performance approaching US giant Anthropic's frontier Fable model.
The launch, which comes a month after Anthropic's Fable and Mythos models were abruptly withdrawn by the US government due to security concerns, underscores how quickly China's open AI ecosystem is narrowing the gap with the most advanced US systems.
Companies including Moonshot, Z.ai and MiniMax are releasing increasingly powerful models at sharply lower costs, challenging long-held assumptions in the West that Chinese developers trail their American peers by months.
Keep updated, follow The Business Standard's Google news channel
Moonshot said Kimi K3 is the first open-weight model to approach the 3 trillion-parameter mark and is designed for advanced reasoning, long-horizon coding and knowledge work. The model features a 1 million-token context window, allowing it to process and retain substantially more information than earlier generations in a single prompt.
Open-weight models allow users to download, run and customise the underlying systems, unlike proprietary, closed-source models.
Kimi K3 "performed competitively with Fable 5 (with fallback) and substantially outperformed Anthropic's Opus 4.8, GPT-5.6 Sol, and GPT-5.5" in terms of GPU kernel optimisation, the company said. The term refers to techniques that maximise AI hardware utilisation and minimise latency.
The model has also posted strong results in third-party evaluations.
Arena.ai ranked Kimi K3 first in a benchmark assessing web interface-building capabilities, while Vals AI placed it second overall behind Fable 5 and ahead of GPT-5.6 Sol. Artificial Analysis said the model delivered performance comparable to OpenAI's GPT-5.5 and Anthropic's Claude Opus 4.8, particularly on tests measuring complex, multi-step tasks.
The Moonshot news drove shares of domestic AI competitors Zhipu (2513.HK) and MiniMax (0100.HK) sharply lower in Hong Kong. Just before the market closed, they were down 27.7% and 16.5%, respectively.
Faster release cycles
Chinese AI firms are accelerating their model release cycles as the global AI race intensifies. The shift follows the debut of Z.ai's GLM-5.2, which stunned industry observers by scoring near top US closed-source models on benchmark tests, undermining a consensus among Western analysts that Chinese AI models were at least six months behind.
Lian Jye Su, chief analyst at Omdia, said Chinese models were gaining traction because they could be deployed far more cheaply than leading US systems.
"They can be run at a fraction of the cost that OpenAI charges its clients," he said, but cautioned that Kimi K3's scale "doesn't necessarily mean you have the best performance by default."
Kimi K3's size also means few users are likely to host it themselves despite its open-weight release.
Ryan Fedasiuk, a fellow at the American Enterprise Institute, said in a LinkedIn post that running a 2.8 trillion-parameter model locally would require hundreds of thousands of dollars' worth of computing equipment.
Trillion-parameter systems
Parameters are the internal variables a model learns during training and are often used as a rough measure of scale, though not necessarily capability.
Before Kimi K3's release, Meituan's LongCat-2.0 and DeepSeek's V4-Pro led China's AI industry with 1.6 trillion total parameters, while several other domestic rivals have passed the trillion-parameter threshold.
But a direct comparison with US frontier models is difficult because companies such as Anthropic and OpenAI do not disclose the parameter counts of systems including Fable, Mythos or GPT-5.5.
Moonshot said Kimi K3 incorporates two significant architectural upgrades that improve computing efficiency and enable it to complete long-horizon coding tasks with minimal human supervision.
Backed by giants like Alibaba and Tencent, Moonshot has been heavily expanding its capabilities and capital to remain at the forefront of the AI sector.
Bloomberg reported last month that the startup was seeking $2 billion in fresh funding at a valuation of about $30 billion ahead of a potential Hong Kong listing.
