China's Moonshot, Netflix's Slump & Greylock's $1.5B Bet

**SPEAKER_1** (0:02)
Bloomberg Audio Studios, podcasts, radio, news. Bloomberg Tech is live from the heart of Silicon Valley with Ed Ludlow in San Francisco.

**Ed Ludlow** (0:22)
This is Bloomberg Tech. Coming up, the global AI race is accelerating as Chinese startup Moonshot says its latest model can compete with the best from OpenAI and Anthropic. Plus, Netflix shares tumble after the streaming giant warns of slowing sales growth for a second straight quarter. And Greylock, one of the oldest venture firms just raised $1.5 billion for its 18th fund. We speak with partner, Saam Motamedi. Let's get straight to our top story. Technology stocks are under pressure all around the world this Friday. And the catalyst is a surprise out of China. AI startup Moonshot has unveiled Kimi K3, a $2.8 trillion parameter model. It says can compete with the best from OpenAI and Anthropic. It charges about $3 per million input tokens and $15 per million output tokens. Basically, dramatically cheaper to use than many leading AI models, despite performing at the frontier. Investors are drawing parallels with last year's deep seek moment and questioning whether the AI industry's enormous spending spree is becoming harder to justify.
Here's what's moving and here's where the pressure is. Right now, we're off-session lows, but the NASDAQ 100 down 1.7 percent, the SOX down almost 3 percent, SOX is on track for its biggest weekly decline since April of 2025 Right now, it's trading at its lowest level since about early to mid-May. The NASDAQ 100 is not far off that weekly drop milestone either, about a percentage point away from its biggest drop since April of 2025 The individual movers, their compute names that we're looking at. One point, Apple is now down significantly modestly, two tenths of a percent. It is very close and at one point did overtake Nvidia as the world's most valuable company, but basically the market's under pressure generally.
Let's get to Bloomberg Senior Tech Editor, Mike Sheppard, and let's talk about China and AI. I mean, Shepp, let's start with Moonshot and Kimi K3. I'll try to get as much of the detail of this release as possible and the market reaction is clear. But what else do we know?

**Mike Sheppard** (2:33)
Well, what we know is that this really does put China on the map. Once again, with a model that rivals some of the best coming from Silicon Valley. And it also echoes in a way, if you ask around town here in Washington, certainly among some of the companies here in the US, that some of these models that China is putting forth may have been built on the backs of this practice known as distillation, where results are harvested from the outputs of American AI models to build this rival generation of chatbots in China on the cheap.
China has rejected a lot of those claims, and yet it certainly is a friction point between the US and China in this broader global race to dominate the emerging technology of AI.

**Ed Ludlow** (3:19)
Chinese President Xi Jinping has been outstaking his claim for leadership in the field of AI, talking about China's domestic prowess in AI, but also taking policy action to support what we see from Moonshot. What do we need to know about what President Xi has been saying this week?

**Mike Sheppard** (3:40)
Well, earlier today, he made a debut appearance, his first ever, at the Shanghai World AI Forum. This is an event held annually there. But this really signified his personal stamp on China's push to lead in AI. Earlier this year, the government there had agreed to put as much as $295 billion toward building a nationwide, interconnected network of computing hubs, data centers to really power the nationwide push to ensure that there is enough compute to go around to support all of these startups that are developing models like Kimi and others that we have been talking about on this program. And then Xi is also making this not just a message about China, but about the world. He is calling for AI to be something distributed more equitably around the world. He pitched this message to the Global South, saying he wants to see AI for all countries, not just the richest and most powerful. And that really played to concerns that we have heard from decades from developing nations that they are the last to bear the fruits of any big technological advance. And AI, many countries in the Global South have been watching advances by the US and by China, wondering when they would get a piece of the action. And she is making an offer to them that, look, if you sign up with us, you will get your fair share. He is also calling for some guard rails on the technology.