China’s Moonshot Challenges Anthropic With a Bigger, Cheaper Model

Chinese artificial intelligence startup Moonshot is reportedly preparing to launch Kimi K3, an open-weight model expected to rival Anthropic’s flagship systems while costing a fraction as much to run. It could mark the company’s boldest challenge yet to U.S. AI leadership.

Moonshot is expected to release Kimi K3 in the coming days, the Financial Times reported, citing two people familiar with the matter. The model is expected to have between 2 trillion and 3 trillion parameters, making it China’s largest AI model to date. Industry analysts estimate Anthropic’s Claude Opus 4.8 has between 1.5 trillion and 2 trillion parameters, though Anthropic has not disclosed the figure.

According to the report, Kimi K3 is expected to outperform Claude Opus 4.8 on mainstream benchmarks and will be released as an open-weight model, allowing developers to download and modify it. The model is still expected to trail Claude Fable 5, Anthropic’s most powerful model, which was briefly withdrawn after U.S. officials raised concerns about its cybersecurity capabilities.

The launch underscores how quickly Chinese AI developers are narrowing the technology gap with U.S. rivals. The Financial Times reported that Kimi K3 could challenge the industry’s long-held assumption that Chinese frontier models trail their American counterparts by eight to 12 months.

The competitive pressure increasingly extends beyond benchmark performance to economics. PYMNTS reported that Chinese developers, including DeepSeek, have gained enterprise interest by offering AI models at a fraction of the cost charged by leading U.S. providers, forcing businesses to reconsider whether premium frontier models justify their higher prices.

According to the Financial Times, Anthropic plans to raise prices for Claude Opus 4.8 in September to $3 per million input tokens and $15 per million output tokens. By comparison, Moonshot’s current K2.6 model costs roughly one-third as much, while remaining open-weight rather than proprietary.

The rivalry has also intensified concerns over intellectual property. The Financial Times noted that Anthropic accused Chinese AI companies earlier this year of conducting “industrial-scale distillation attacks,” in which developers train smaller models using outputs from frontier systems instead of building them entirely from scratch.

The competitive race is also reshaping AI investment. PYMNTS reported that OpenAI is weighing delaying its IPO until 2027 because advisers are concerned that technology stock volatility could weaken investor demand. Meanwhile, Chinese AI companies continue raising capital, with Moonshot reportedly seeking a valuation of about $31.5 billion while rival DeepSeek is pursuing a valuation of roughly $71 billion, according to the Financial Times.