China’s Moonshot AI raises $2 billion at $20 billion valuation as demand for open source AI soars

Chinese AI companies may not be raking in as much cash as their Western rivals, but their open-source models still have no shortage of interest from people who don’t mind sacrificing performance in exchange for cheaper inference. And investors are paying attention, too.

Moonshot AI, the Beijing-based AI lab behind the popular Kimi series of open-weight large-scale language models, has raised about $2 billion at a valuation of $20 billion, according to a post by Huafeng Capital, which advised some investors in the round.

The round was led by Long-Z Investment, the VC arm of Chinese food delivery company Meituan, a spokesperson told TechCrunch. According to the same post, Tsinghua Capital, China Mobile, and CPE Yuanfeng also participated.

The company has raised $3.9 billion in the past six months, according to Huafeng Capital. Moonshot was reportedly valued at $4.3 billion at the end of 2025, but after raising $700 million in funding, that amount more than doubled to $10 billion by early 2026.

Founded in 2023 by former Meta AI and Google Brain researcher Yang Zhilin, Moonshot AI quickly became one of China’s most popular AI labs after its openweight Kim K2.5 large-scale language model took the coding world by storm earlier this year, outperforming most benchmarks and posting performance numbers close to models from Open AI and Anthropic at the time.

The company’s latest model, Kim K2.6, is currently the second most used LLM in the distribution platform OpenRouter.

The funding comes amid a surge in investor appetite for open-weight AI models produced by Chinese labs. Moonshot’s annual recurring revenue exceeded $200 million in April due to rapid growth in paid subscriptions and API usage, according to the financial advisor’s post.

DeepSeek, perhaps the most popular Chinese AI lab, is reportedly in talks to raise external capital for the first time at a valuation of about $45 billion.

Some of Moonshot’s rivals have gone public due to demand for their AI models. Zhipu AI, which trades in Hong Kong as Knowledge Atlas Technology, closed on Thursday with a market capitalization of HK$434.7 billion (about $55.9 billion), while MiniMax ended the day with a market capitalization of HK$257.3 billion (about $33 billion) after the launch of a new model boosted both stocks.

Moonshot’s Kim model competes with OpenAI’s ChatGPT, Google’s Gemini, Anthropic’s Claude, as well as ByteDance’s Doubao, Alibaba’s Qwen, Zhipu’s Z.ai, and DeepSeek.

Moonshot’s backers include Alibaba, Tencent, HongShan (formerly Sequoia China), ZhenFund, IDG Capital, and 5Y Capital.