The Chinese AI Model Rattling Silicon Valley and Washington

**Oanh Ha** (0:02)
Bloomberg Audio Studios, Podcasts, Radio, News.
The battle for AI dominance between the US and China has escalated sharply over the past few weeks. After the surprise release of a new Chinese AI model, took the tech world and Washington by storm.

**Mark Anderson** (0:22)
Kimi K3, which is a very powerful model.

**SPEAKER_3** (0:25)
Kimi K3 model.

**SPEAKER_4** (0:26)
This company's AI model, known as Kimi K3 model. For the last three days, I've said Kimi K3 many times.

**Oanh Ha** (0:33)
Kimi K3, developed by Chinese startup Moonshot AI.

**Mark Anderson** (0:37)
Kimi K3 is really making waves because it stacks up so well against offerings from OpenAI and Anthropic, which are among the most powerful AI models in existence.

**Oanh Ha** (0:49)
Mark Anderson is Bloomberg's Asia Technology Editor based in Hong Kong.

**Mark Anderson** (0:54)
And all of this developed by a Chinese AI company that has access to far less compute and far less resources than deep pocketed American competitors.
Kimi K3 trails only OpenAI's GPT 5.6 and Anthropic's Claude Fable 5 So it's the third most powerful model on the market today.

**Oanh Ha** (1:20)
Within hours of its release, Kimi K3 sent shockwaves through global markets, triggering memories of the deep seek panic in early 2025

**SPEAKER_4** (1:30)
Remember, chip stocks fell into a bear market Friday.

**SPEAKER_3** (1:33)
Because investors are now really re-assessing whether or not all that capex by Samsung and SK Hynix, is that really justified, given that China is doing it better and cheaper?

**Oanh Ha** (1:44)
Once market settled, the questions began about how Moonshot built Kimi in the first place.

**Michael Kratzios** (1:51)
It raises the question about if this was done illegally and in a violation of those export controls.

**Oanh Ha** (1:59)
Did it use banned NVIDIA chips? Did it steal proprietary data from American rival Anthropic?

**Michael Kratzios** (2:06)
This is what the director of the White House Office of Science and Technology, Michael Kratzios, he is saying that Moonshot allegedly developed a sophisticated internal platform to conduct large-scale distillation against US models.

**Oanh Ha** (2:20)
And most importantly, what is yet another low-cost Chinese AI model mean for the race between the US and China for global AI supremacy?

**Mark Anderson** (2:30)
I think the K3 moment tells us that the race is much closer than people previously thought. I think that China is about six months behind the US.

**Oanh Ha** (2:41)
That's not a lot of time.

**Mark Anderson** (2:42)
Which is not a lot of time, but it's also bringing a challenge to this perception that only American AI, only proprietary AI can be frontier, can be the most cutting edge AI. It's challenging this idea that America owns the most advanced AI models in a really exciting way.

**Oanh Ha** (3:05)
Welcome to the Big Take Asia from Bloomberg News. I'm Oanh Ha. Every week, we take you inside some of the world's biggest and most powerful economies, and the markets, tycoons, and businesses that drive this ever-shifting region. Today on the show, what we know about Moonshot's Kimi model, what the company's stunning rise means for Silicon Valley's tech giants, and the high-stakes AI arms race between the US and China.
Kimi K3's launch didn't just rattle markets. Overnight, it became clear that China is intent on rewriting the rules of the global AI race. It's also upending long-held assumptions about how this technology will evolve. The prevailing view in the AI industry used to be that the companies with the biggest budgets, largest data centers, and access to the most advanced chips would lead. But with the release of DeepSeek's R1 model last year, and Moonshot AI's latest offering, that narrative is being challenged.
I want to get just a little geeky with you. Can you take us under the hood about this model and what's special about it?

**Mark Anderson** (4:18)
Sure. Geeky is good.
Basically, it's got a really huge brain. By brain, we mean parameters. It's got 2.8 trillion parameters.

**Oanh Ha** (4:28)
What are parameters?

**Mark Anderson** (4:30)
I would describe parameters as the size of the model's brain. It's essentially the amount of information that is stored inside an artificial intelligence model. The bigger the brain, the more information that is stored in it, the more information can be processed. It's really as simple as bigger is better.
2.8 trillion is certainly a very large number, which is essentially on par with the latest offerings from OpenAI and Anthropic.

**Oanh Ha** (4:57)
Kimi K3 isn't just notable for its brain size, it's also remarkable for the way it's being shared. While models like GPT and Claude largely operate behind closed doors, K3 was released to the public last month as an open-weight model, meaning anyone, a researcher, a startup, a government, can access it.