A Shanghai launch this week sent tremors through global markets. Beijing-based startup Moonshot AI unveiled its Kimi K3 model at the World Artificial Intelligence Conference.
The model features a 2.8-trillion-parameter open-weight architecture. It reportedly matches or outperforms top US systems on coding benchmarks while offering free access for modifications.
The market fallout was immediate. The Nasdaq dropped about 1%. Shares of Nvidia and Intel declined as investors questioned US AI infrastructure spending. The damage spread globally; Chinese AI firms Zhipu and MiniMax saw stocks drop sharply.
Bitcoin also declined in a pattern dubbed a "Kimi moment," echoing a previous shock from Chinese AI firm DeepSeek earlier this year.
Moonshot AI was established in 2023. It raised $2 billion in May 2026, achieving a valuation over $20 billion ahead of a potential Hong Kong IPO. The company's open-weight strategy contrasts with the proprietary models from most US labs, adding significant competitive pressure to the entire AI sector.