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Wall Street saw Kimi K3 and reached for the DeepSeek playbook: Sell chip stocks first, sort out the details later.
Moonshot AI’s new model added fuel to a broader technology selloff that pushed the Philadelphia Semiconductor Index (SOX) down nearly 10% for the week, its worst performance in more than a year. Investors worried that another capable Chinese model had exposed the hyperscalers’ infrastructure spending as wasteful.
Then Moonshot ran into a wall.
Demand for Kimi K3 surged so quickly that the company temporarily stopped accepting new subscriptions. User traffic had pushed its GPU capacity close to the limit, forcing Moonshot to protect service for existing customers while it added more computing resources.
