The launch, which comes a month after Anthropic’s Fable and Mythos models were abruptly withdrawn by the US government due to security concerns, underscores how quickly China’s open AI ecosystem is narrowing the gap with the most advanced American systems.
Companies including Moonshot, Z.ai and MiniMax are releasing increasingly powerful models at sharply lower cost, challenging long-held assumptions in the West that mainland developers trail their American peers by months.
Moonshot, founded by Yang Zhilin, said Kimi K3 is the first open-weight model to approach the three-trillion-parameter mark and is designed for advanced reasoning, long-horizon coding and knowledge work. The model features a one-million-token context window, allowing it to process and retain substantially more information than earlier generations in a single prompt.
Kimi K3 “performed competitively with Fable 5 [with fallback] and substantially outperformed [OpenAI’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 and Minimax down sharply in Hong Kong; they were down over 25 percent and 15 percent, respectively, at one stage in intraday trading.
Mainland 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.
Hong Kong-listed MiniMax is reportedly also developing its own 2.7-trillion parameter model to be released as soon as the third quarter of 2026, and plans to launch its frontier-level multimodal model H3 in the near future.
The race towards trillion-parameter systems reflects growing demand for autonomous systems capable of handling complex reasoning tasks. Leading AI labs are also pursuing systems capable of autonomous self-improvement, a process often referred to as recursive self-improvement.
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.
Open-weight models allow users to download, run and customise the underlying systems, unlike proprietary, closed-source models.
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 US$2 billion in fresh funding at a valuation of about US$30 billion ahead of a potential Hong Kong listing. (Reuters)
