Zhipu AI shares plunge 22% as Moonshot AI unveils powerful Kimi K3 model, shaking up China's AI race

Zhipu AI shares slide over 20% after Moonshot unveils advanced AI model By Investing.com

Investing.com-- Shares of Zhipu AI (HK:2513) fell in Hong Kong trade on Friday after Chinese artificial intelligence startup Moonshot released a new flagship open-weight AI model, intensifying competition in China's fast-moving AI sector. Zhipu AI shares slumped 22% to HK$1,209.0 by 04:49 GMT, reaching their lowest since June 12. Get real-time updates on market-moving news with InvestingPro -- avail 60% off now Moonshot on Friday unveiled Kimi K3, a 2.8 trillion-parameter model that it described as the world's largest open-weight AI model. The company said the model features a one million-token context window and performs competitively with leading AI systems on coding, reasoning and agent tasks. It added that the full model weights will be released by July 27. The launch raises the stakes in China's AI race, where companies including Zhipu AI, Alibaba, Baidu and DeepSeek have accelerated releases of increasingly capable foundation models to win enterprise customers and developers. Moonshot, backed by Alibaba and Tencent, said Kimi K3 uses a hybrid attention architecture and activates only a fraction of its experts to improve efficiency while supporting long-context reasoning and software engineering tasks.

Z.AI Shares Slump on Competitor's Model Release, Broader Tech Decline

Chinese artificial-intelligence company Z.AI's shares slumped after a key competitor released a powerful new large language model, compounded by a broader tech-sector decline. Shares of Z.AI, previously known as Zhipu AI, slid 24% to 1,168.00 Hong Kong dollars, equivalent to US$148.98, in Friday afternoon trading. The Hang Seng Tech Index was last down 4.1%. Domestic rival Moonshot AI launched Kimi K3, saying it outperforms some cutting-edge U.S. systems, as well as Z.AI's GLM 5.2. Shares of MiniMax, another Chinese AI company, also slid in Hong Kong trading, down 18%. Morningstar senior equity analyst Chelsey Tam said the release of Kimi K3 likely contributed to Z.AI and MiniMax's declines. This reflects "the intense competition in the large language model space, where new models are constantly leapfrogging one another," Tam said. "K3 raises the capability ceiling for China AI models, shifting the burden of proof to other independent AI labs, e.g. Zhipu and MiniMax," BofA Securities said in a research note. DBS said in a note that it is cautious on Z.AI's relatively high valuation, which likely prices in its position as the "best Chinese model player." However, DBS noted that K3 has overtaken Z.AI's GLM 5.2 model across major benchmarks. Chinese AI companies are catching up quickly with U.S. leaders in terms of model capabilities, but revenue and valuations generated remain a fraction of companies such as OpenAI and Anthropic.