Moonshot’s Kimi K3 launch sparks AI stock selloff in Hong Kong

Chinese artificial intelligence startup Moonshot unveiled Kimi K3 on Friday, a 2.8 trillion-parameter model it described as the world's largest open-weight AI system, sending shares of rival AI companies tumbling in Hong Kong and adding to weeks of pressure on global tech stocks. The launch coincided with Chinese President Xi Jinping's first appearance at the World Artificial Intelligence Conference in Shanghai, where he delivered a keynote address signaling Beijing's deepening commitment to the technology.

A New Benchmark From China

Kimi K3 claims performance approaching that of Anthropic's frontier Fable model and, according to Moonshot, "substantially outperformed" OpenAI's GPT 5.6 Sol and Opus 4.8 on key benchmarks. The model features a one-million-token context window and is designed for advanced reasoning and long-horizon coding tasks. Arena.ai ranked it first in frontend code generation, ahead of even Fable 5.simonwillison+4

The release follows a pattern set earlier this year by DeepSeek, whose open model triggered a global AI stock selloff in January. Moonshot, backed by Alibaba ↘ 2.06% and Tencent, was reported last month to be seeking $2 billion in fresh funding at a $30 billion valuation ahead of a potential Hong Kong listing.gbcode.rthk+1

Market Fallout

The announcement hit Moonshot's domestic competitors hardest. Shares of Hong Kong-listed Zhipu AI fell more than 25 percent in intraday trading, while MiniMax dropped over 15 percent, according to RTHK. Investing.com reported Zhipu shares slumped 22 percent to their lowest level since June.investing+1

The selloff reflects investor anxiety that Moonshot's aggressive pricing — $3 per million input tokens and $15 per million output tokens — combined with open-weight access promised by July 27 could undercut the business models of both Chinese and Western AI providers.fortune+1

Xi's AI Summit Debut

President Xi's appearance at the 2026 World AI Conference, held in Shanghai from July 17 to 20, marked his first attendance at the annual event since its inception in 2018. China's Ministry of Foreign Affairs said Xi would "systematically elaborate on China's policies, position, visions and propositions on AI development and governance". The conference theme — "Intelligent Partners, Co-create the Future" — underscores Beijing's framing of AI as central to a "new form of intelligent economy" outlined in the country's 2026 government work report.facebook+2

The convergence of Moonshot's model launch with Xi's summit appearance reinforces the message that China's AI sector is closing ground on its American rivals at a pace that continues to unsettle global markets.