Moonshot AI in revenue talks with Microsoft, Amazon, Google

China's Moonshot AI is negotiating revenue-sharing agreements with Microsoft ↗ 1.68%, Amazon Amazon.com, Inc. ↗ 3.97%, and Alphabet's ↗ 1.53% Google that would allow the U.S. cloud giants to host its Kimi K3 model, Reuters reported on Wednesday, citing three people familiar with the talks.finance.yahoo

Any deal could mark the first major revenue-sharing pact between a Chinese AI firm and a U.S. cloud company, underscoring how China's leading AI models are gaining traction in American markets despite national security concerns in Washington.

What Moonshot Wants

The IPO-bound startup is seeking up to a 30 percent share of revenue generated from K3-related services on Microsoft's Azure, Amazon Web Services, and Google Cloud, according to the sources, who declined to be identified because the discussions are private. That figure would be in line with terms the company has outlined for major customers using the open-weight model.business-standard+1

The discussions remain at an early stage with no certainty they will result in agreements. Unresolved issues include how revenue might be split, data access, and auditing token usage — the units of text processed by AI models that form the basis of usage-based billing.finance.yahoo

Moonshot did not respond to a request for comment. Microsoft, Google, and AWS declined to comment.finance.yahoo

Geopolitical Headwinds

The negotiations come despite critical comments from senior U.S. officials. Treasury Secretary Scott Bessent said last month he might add Moonshot to a trade blacklist, and U.S. officials have accused the Beijing-based company of stealing from Anthropic's most sophisticated model to help create Kimi K3 and of illegally acquiring Nvidia ↘ 4.58% chips. Moonshot has rejected suggestions that K3's performance was achieved via distillation, saying its gains came from original changes to underlying architecture.business-standard

K3's Market Position

Kimi K3, released in July with approximately 2.8 trillion parameters, has posted strong results in third-party evaluations and delivers performance comparable to leading Western models on tests measuring complex, multi-step tasks. Few customers are expected to run a system of that scale on their own infrastructure because of the computing costs involved, making major cloud providers the main route to enterprise adoption.globaltechcouncil+1

Founded in 2023 by Carnegie Mellon-trained researcher Yang Zhilin and backed by Alibaba ↗ 2.23%, Moonshot raised more than $2 billion in May and is preparing for a potential Hong Kong listing. Reuters previously reported that Alibaba is also seeking revenue-sharing agreements with major users of its own open-source AI model.business-standard+1