Chinese artificial intelligence startup Moonshot AI has reportedly raised $3.5 billion in a funding round that valued the company at $35 billion, following growing interest in its Kimi K3 open-weight AI model.
The three-year-old startup secured more capital than its initial target of between $1 billion and $2 billion. China’s state-backed National Artificial Intelligence Industry Investment Fund was among the lead investors in the round.
The financing represents a significant increase from Moonshot AI’s earlier valuations. The company is backed by investors including Alibaba and Tencent and has emerged as one of China’s prominent developers of large language models.
Founded in Beijing in 2023 by AI researcher Yang Zhilin, Moonshot AI develops the Kimi family of AI models and operates the Kimi chatbot. Its latest Kimi K3 model has attracted attention for its performance across coding, reasoning and agent-based tasks.
Kimi K3 is based on a mixture-of-experts architecture and contains 2.8 trillion total parameters. The system activates only a selected portion of those parameters while processing individual tasks, an approach designed to improve computing efficiency.
The model has been positioned as an open-weight alternative to proprietary AI systems developed by companies including OpenAI and Anthropic. Moonshot AI has reported competitive performance across selected benchmarks, although model results can differ depending on testing methods and use cases.
At $35 billion, Moonshot AI’s private valuation is higher than the current market capitalisation of some established Indian IT companies, including Wipro and Tech Mahindra. However, the comparison is not exact because Moonshot’s valuation was established through a private funding transaction, while the values of listed companies change according to their publicly traded share prices.
Moonshot AI is also reportedly approaching investors for another funding round at a pre-money valuation of $50 billion. The potential financing could be its final private round before a proposed initial public offering in Hong Kong. The company has not formally confirmed the new fundraising or IPO timeline.
The latest investment reflects continuing demand for Chinese AI companies capable of developing advanced models despite restrictions on their access to high-end computing chips.
