What is China’s Kimi K3 and why is the US so rattled by it?

 

People walk past the Moonshot booth promoting its Kimi K3 AI model, during the World Artificial Intelligence Conference in Shanghai, China, July 17, 2026.

Go Nakamura/Reuters

Hong Kong —  

Remember DeepSeek? The Chinese artificial intelligence startup that rattled the US tech industry with its model that nearly matched leading rivals, trained at a fraction of the cost?

China may have done it again.

The latest Chinese AI model making waves was developed by a lesser-known startup called Moonshot AI. In just two days after launch, Moonshot suspended new subscriptions after demand overwhelmed its computing capacity.

The unexpected enthusiasm for Moonshot’s Kimi K3 model stems from its ability to match – and in some cases outperform – its most advanced US competitors, such as the latest iterations of OpenAI’s GPT and Anthropic’s Claude, for free.

Now its rise is intensifying an already contentious race between the US and China to dominate cutting-edge AI. Washington has ramped up export restrictions against China in recent years to slow the country’s development of AI and

He demonstrated potential early on when studying at Tsinghua University, China’s most elite engineering school, under Tang Jie, a professor who would go on to found another prominent AI startup, Z.ai, in 2019.

“He is the most talented and exceptional student I’ve encountered in recent years,” Tang said while recommending Yang for a scholarship in 2014.

Yang Zhilin, co-founder of the artificial intelligence (AI) company Moonshot AI, speaks at the 2026 Zhongguancun Forum Annual Conference on March 25, 2026 in Beijing, China.

VCG/AP

Yang then went to Carnegie Mellon University for his PhD in computer science, studying under Ruslan Salakhutdinov, a former AI executive at Meta and Apple. By the end of his studies, Salakhutdinov recalled, Yang turned down a job offer from a senior Apple executive who reported directly to Tim Cook.

“I remember him telling me that if he didn’t at least try starting his own company, he would regret it for the rest of his life. I respect that, and he was right,” Salakhutdinov said in a post on X.