If you felt a tremor in your portfolio this week, you can trace it back to Shanghai. Moonshot AI, a Beijing-based startup that most retail investors couldn’t name two weeks ago, just released an AI model large enough to make Wall Street question everything it thought it knew about who’s winning the AI race.
The company unveiled its Kimi K3 model on July 16 at the World Artificial Intelligence Conference in Shanghai. The model features a 2.8-trillion-parameter open-weight architecture and a one-million-token context window, making it the largest open-weight model in the world. It reportedly matched or outperformed top US AI systems from OpenAI and Anthropic on multiple coding benchmarks, while offering significant cost advantages and free access for modifications.
The market fallout was swift
The Nasdaq dropped approximately 1% in the wake of the launch. Shares of Nvidia and Intel both declined as investors suddenly started doing math on whether US companies are overspending on AI infrastructure.
The damage wasn’t limited to American companies either. Chinese AI firms Zhipu and MiniMax saw their stocks drop around 27% and 16%, respectively.
