How Moonshot AI's Kimi K3 Puts Pressure on US Tech

[00:00:00]That, we're joined by Bloomberg executive editor for global technology, Elstrom. So, Peter, how do you read this moment? Do you think that it's a deep sea version two, or do you think it's something different? Because now a lot of the tech companies kind of had an idea of what a deep sea could do. But this is moonshot, and maybe it's something new altogether.

[00:00:18]Yeah. I think the tech, companies in The US in particular thought they knew, where the competition was coming from in China, and this was a bit of a surprise. We had seen the deep seek moment last year as you had talked about. There were some other players that were kind of prominent, including Alibaba, the ecommerce company that has a strong model in Guin in particular. But then over the weekend, we got these this news from Moonshot that they'd introduce Kimi k three, which is a very powerful model. It outstrips most of the frontier models on many parameters except for the two leading ones from, Anthropic and OpenAI.

[00:00:54]So it's a very strong performer. It has 2.8, trillion parameters, which is sort of like equivalent to brain synapses. It's a very powerful model, and I think that surprised people that there was yet another Chinese company that was able to come and compete with the best from Silicon Valley on a number of parameters at cost that people really don't understand at this point. Many of these Chinese models are also open source or open weight, so they're much less expensive. They're offered, very broadly. If you don't wanna run them on, somebody else's computer systems, you can run them on your own. Also, you can take the model and then run it so they can that can avoid some of the security concerns around Chinese models. But it is a very serious threat for some of these, frontier models in The US that had been planning on charging premium prices. Now there may be some pricing pressure on what they're able to charge their customers, and that may make it a little bit more difficult as we see OpenAI and Anthropic try to go public in the near future, both of them wanna get valuations that are above a trillion dollars each That may be a little bit more challenging today.

[00:01:55]Right. And it challenges the whole CapEx thesis and the whole AI stack. Peter, Isabelle made a really good point earlier when we're talking on our pre show call, basically comparing this to BYD. I mean, BYD, you have this Chinese technology that's just as good as not better than other EVs in The US, and it's cheaper. But notably, in America, you can't buy a BYD. Do we hear any noise coming from government officials about trying to curtail the usage of some of these Chinese models?

[00:02:23]There there are questions about this. I mean, you make a very good point. China has been able to compete in a number of different areas, not just electric vehicles, but also solar panels, steel, for example. So you do have, some some of these historic cases where in different industries, Chinese companies have come up, they've been able to do things at much, much lower prices. Yes, that is happening in AI models right now. And you've got a whole series of them, DeepSeek, Moonshot now, there's MiniMax, there are others that that are coming out with these less expensive models. And there has been some discussion about whether we should try to borrow those companies from competing in The US. I think the challenge there is that you may be hurting American companies by forcing them to use more expensive models or less capable models. There are open source models in The US too, but I think when you look at the leading edge of open source right now, these less expensive models, they're really Chinese companies at this point. So if you take away a tool that companies want to use to be able to, incorporate AI into their businesses, you may end up hurting American businesses that are not the AI leaders. You may perhaps help the AI the AI frontier companies, but you may punish, other companies in other parts of the economy.

[00:03:33]Peter, so interesting. Thank you for your coverage. That's Bloomberg's Peter Elstrom.