ONE BIG THINGChina’s AI labs are challenging American ones—and beating them on cost
In mid-July, online sleuths who obsessively track the internet for signs of new AI models started to whisper about the latest offering from Moonshot AI, the Beijing-based artificial intelligence startup behind the Kimi large language model: Something big was coming. Moonshot AI’s latest model didn’t just live up to the hype—it raised the stakes, Fortune’s Nicholas Gordon reports.
On July 16, Moonshot debuted Kimi K3, the largest open-source model ever released, and promised it could perform close to the level of Anthropic’s Fable 5—perhaps the most powerful publicly available model on the market today—at a fraction of the cost.
Kimi K3 blew up the timeline: Chinese AI is now cheap enough and good enough that even U.S. startups and Fortune 500 companies are quietly plugging the models into their operations to rein in spiraling AI budgets. It’s a remarkable closing of the gap that China achieved despite Washington imposing export controls to choke off China’s access to the world’s most advanced chips.
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