Full Breakdown
Moonshot AI Negotiates Revenue-Sharing Deals with U.S. Cloud Giants for Kimi K3
8/27/2026, 7:53:56 AM
Core Negotiations
Chinese AI startup Moonshot AI is in early talks with Microsoft Azure, Amazon Web Services and Google Cloud to host its Kimi K3 model. The firm seeks up to a 30 % share of revenue from K3-related services on each platform. The discussions are private; three people familiar with the matter confirmed the terms. No agreement has been reached, and the parties declined to comment.
Background & Context
Moonshot AI, founded in 2023 by Carnegie-Mellon-trained researcher Yang Zhilin, is backed by Alibaba, which invested roughly $800 million for a 36 % stake in fiscal 2024. The startup raised more than $2 billion in May and completed a Series F round of over $3.5 billion in July, valuing it at $35 billion. A pre-IPO round slated for August targets a valuation of up to $50 billion.
Kimi K3, launched in July 2026, is an open-weight mixture-of-experts model with 2.8 trillion total parameters, 104 billion active parameters, 896 experts, native vision support and a 1-million-token context window. The base model is downloadable; the more powerful reasoning and multimodal versions are available only via API.
Data & Statistics
- Model size: 2.8 trillion parameters (largest open-source model by count).
- Active parameters: 104 billion; experts: 896.
- Context window: 1,048,576 tokens.
- Benchmark performance: Ranked first by Arena.ai for web-interface building; Artificial Analysis found performance comparable to OpenAI’s GPT-5.5 and Anthropic’s Claude Opus 4.8 on complex tasks.
- Revenue trajectory: $100 million in March, $200 million in May and $300 million by mid-June 2026.
Official Statements & Responses
- U.S. Treasury Secretary Scott Bessent indicated Moonshot could be added to a trade blacklist.
- Michael Kratsios, Director of the White House Office of Science and Technology Policy, accused Moonshot of “distilling” Anthropic’s Fable model to create Kimi K3.
- U.S. Department of Commerce and Treasury have launched investigations into possible illegal acquisition of restricted Nvidia chips.
- Moonshot AI, in a statement to China’s National Business Daily, rejected the distillation allegation and said Kimi K3’s gains stem from original architectural changes.
Criticism & Opposition
U.S. officials allege intellectual-property theft from Anthropic’s Fable model and illicit Nvidia chip acquisition; Moonshot denies both. The Treasury Secretary’s blacklist warning underscores the political risk of any U.S. cloud partnership.
Why It Matters
A revenue-sharing pact would be the first major agreement of its kind between a Chinese AI firm and a large U.S. cloud provider, potentially opening a direct commercial channel for Chinese models in the American market despite export restrictions on advanced AI chips.
Timeline
- July 2026 – Kimi K3 open-sourced; ARR climbs to $100 million.
- July 2026 – Moonshot signs a revenue-sharing deal with domestic IT services provider Chinasoft International (terms undisclosed).
- August 26 2026 – Reuters reports Moonshot’s request for up to a 30 % revenue cut from Azure, AWS and Google Cloud services.
- August 2026 – Pre-IPO funding round underway, targeting a $50 billion valuation.
Unresolved Issues & Gaps
Negotiations still lack clarity on three key points: the precise revenue-sharing formula, data-access rights for the cloud providers, and mechanisms for auditing token usage across platforms that bill differently. No party has confirmed whether these issues can be reconciled, leaving the potential deal uncertain.
