Moonshot Debuts First AI Upgrade Since Its Own DeepSeek Moment

Moonshot AI, the Chinese upstart that had its own DeepSeek moment over the summer, released the first major upgrade to the seminal model that thrust the $50 billion company into the frontier.

The Beijing-based startup unveiled Kimi K3.1 Pro, the first in a new series of AI models that is designed to be significantly better at financial research and coding, two areas of focus for rival developers in the US. Kimi K3.1 Pro is also more capable at 3D modeling, making it more adept for tasks like game design, Moonshot said.

The new release is intended to keep Moonshot competitive in shipping near-frontier AI models alongside competitors like DeepSeek and Z.ai Co. Upon its debut in July, K3 delivered performance on industry benchmarks that rivaled top-tier offerings from OpenAI and Anthropic PBC. The surprise breakthrough — much like DeepSeek’s breakout R1 hit from early 2025 — sent AI and semiconductor stocks tumbling as investors feared it could make US data and computing buildouts obsolete. Both DeepSeek and Z.ai have since released newer offerings that edged past K3 on key leaderboards.

Moonshot recently closed a final round of private fundraising at a valuation of about $50 billion, ahead of an anticipated Hong Kong debut in the first quarter of next year, Bloomberg News reported. The financing mirrors moves by the larger DeepSeek, which just closed a $15 billion financing round – the biggest for any Chinese AI lab – ahead of its own anticipated stock debut.

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Like most of its Chinese rivals, Moonshot has been accused by US rivals and Washington of distillation — the practice of siphoning results from bigger models to train its own – an allegation that culminated in an Anthropic security report detailing cases of data violations. Moonshot has not publicly addressed the allegations.

Moonshot monetizes through subscriptions and token credits sold via its AI tools Kimi Work and Kimi Code, as well as direct model access for developers. The company is targeting a manifold jump in annualized sales to $2 billion by the end of the year, Bloomberg News reported. Its annual recurring revenue topped $1 billion in August, up from $300 million in June.

Chinese regulators last week proposed new export rules that require companies to file for registration before deploying homegrown AI technologies overseas. DeepSeek and MiniMax Group Inc. have already won approval for such overseas deployment under the new draft rules, state media said Thursday, reassuring markets that much of Chinese AI will remain free for export.