Chinese startup Moonshot AI has unveiled a new model it says closes the gap with leading U.S. offerings and surpasses OpenAI and Anthropic’s most capable systems on some benchmarks.
Kimi K3 still trails Anthropic’s Claude Fable 5 and OpenAI’s GPT 5.6 Sol on overall performance, the company said on Friday, but consistently outperformed other tested models.
The model beat Claude Opus 4.8 and GPT 5.5 — models that sit just behind Anthropic and OpenAI’s leading-edge systems — on benchmarks including coding and general agents, according to Moonshot.
It’s China’s largest AI model so far, with 2.8 trillion parameters, referring to the size of its neural network.
“Despite persistent hardware/compute capacity constraints in China, K3 demonstrates that pre-training scaling, paired with architectural innovation, can still deliver step-change gains for flagship Chinese models,” Bank of America analysts said in a note led by Alex Liu.
The release comes as the race for AI supremacy between the U.S. and China intensifies.
Chinese AI models are already gaining traction among Western companies as they close the performance gap with U.S. rivals and remain cheaper to use than the most advanced offerings from American labs. U.S. lawmakers are considering how to curb the growing adoption of Chinese AI models by homegrown companies.
China’s AI shock
Founded in 2023, Beijing-based Moonshot AI is one of China’s leading model builders. It raised $2 billion at a more than $20 billion valuation in May, Bloomberg reported.
Backers include Chinese tech giants Alibaba, which makes the Qwen series of AI models, and Tencent.
Chinese AI rivals’ shares dropped on news of the release. Z.ai, which released a new model to much fanfare in June, saw its stock plummet 28% on Friday. MiniMax Group, another Chinese model company, fell 16%.
“K3 raises the capability ceiling for China AI models, shifting the burden of proof to other independent AI labs,” said Liu.
Earlier this week, Alibaba saw its stock buoyed by news that it was partnering with Apple in China. However, shares dropped 4% Friday.
“For Alibaba, while it benefits from broad AI training/usage growth for its cloud service given tight compute environment, Alibaba Qwen’s “open-source leader” narrative may face some tests,” said Liu.
