Chinese AI firms may not have the deep pockets of their Western counterparts, but their open-source models are drawing plenty of interest from users willing to accept slightly lower performance in exchange for cheaper inference costs. Investors are taking note of this trend.

Moonshot AI, a Beijing-based lab behind the popular Kimi series of open-weight large language models, has raised approximately $2 billion at a $20 billion valuation. This information comes from a post by Huafeng Capital, which advised some investors involved in the round. Other participants include Tsinghua Capital, China Mobile, and CPE Yuanfeng. According to Huafeng Capital, the company has raised $3.9 billion over the past six months.

By the end of 2025, Moonshot was valued at $4.3 billion, according to reports. That figure more than doubled to $10 billion by early 2026, following a $700 million raise.

Founded in 2023 by Yang Zhilin, a former researcher at Meta AI and Google Brain, Moonshot quickly became one of China's most prominent AI labs. Its open-weight Kimi K2.5 large language model made waves earlier this year, nearly topping coding benchmarks and achieving performance close to models from OpenAI and Anthropic. The company's latest model, Kimi K2.6, is now the second-most used LLM on the distribution platform OpenRouter.

This fundraising surge reflects growing investor appetite for open-weight AI models from Chinese labs. Moonshot's annual recurring revenue surpassed $200 million in April, driven by 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 outside capital for the first time, at a valuation of around $45 billion. Some of Moonshot's rivals have even gone public, capitalizing on demand for their models. Zhipu AI, trading in Hong Kong as Knowledge Atlas Technology, ended Thursday with a market cap of HK$434.7 billion (roughly $55.9 billion). MiniMax finished the day at HK$257.3 billion ($33 billion), after both stocks rallied on new model releases.

Moonshot's Kimi models compete with OpenAI's ChatGPT, Google's Gemini, and 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.