BEIJING — Chinese artificial intelligence startup Moonshot is aiming for a valuation of about £7.9 billion (US$10 billion) as it expands an ongoing funding round backed by major tech giants, including Alibaba Group Holding and Tencent Holdings. The move highlights growing investor appetite for Chinese AI firms racing to rival Silicon Valley leaders.
The company behind the Kimi chatbot began discussions in late January to secure additional financing, according to sources familiar with the matter. The effort comes barely a month after Moonshot raised £395 million (US$500 million) at a valuation of roughly £3.4 billion (US$4.3 billion).
Existing investors — among them Alibaba, Tencent and 5Y Capital — have already committed more than £553 million (US$700 million) to the first tranche of the latest round, the sources said. Representatives from Moonshot, Alibaba and 5Y Capital did not respond to requests for comment, while a Tencent spokesperson declined to comment.
Moonshot’s rapid fundraising underscores strong investor enthusiasm for a new wave of Chinese startups developing advanced AI models to compete with companies such as OpenAI and Anthropic. Last month, the Beijing-based firm rolled out Kimi K2.5, leading a broader surge in major AI model upgrades across China ahead of the Lunar New Year holiday.
K2.5 has quickly become one of the most widely used large language models on the OpenRouter distribution platform, outperforming rivals such as DeepSeek and Alphabet’s Google Gemini. In performance rankings, the model now places second among open-source systems on benchmarking site Artificial Analysis — surpassed only by Chinese competitor Zhipu’s latest release, GLM-5.
Talks remain ongoing, and it is not yet certain whether Moonshot will achieve its targeted valuation. Even at £7.9 billion (US$10 billion), the startup would still trail close competitors Zhipu and MiniMax Group, both valued at more than £22.9 billion (US$29 billion) following a pair of high-profile initial public offerings this year. The two companies collectively raised over £790 million (US$1 billion) through listings in Hong Kong.
Moonshot was founded by former Tsinghua University professor Yang Zhilin, who previously worked on AI initiatives at Meta and Google. The firm generates revenue through tiered chatbot subscription plans and by licensing its core technology to enterprise clients, though it continues to lag behind Zhipu and MiniMax in terms of commercialisation.
In an internal memo circulated in December, Yang revealed that Moonshot holds approximately £1.1 billion (US$1.4 billion) in cash and is under no immediate pressure to pursue an IPO. Paying users across China and overseas markets reportedly grew more than 170% month-on-month between September and November.
This week, the company also introduced a cloud service that enables paying customers to host the widely used OpenClaw agent — another step in Moonshot’s push to strengthen its position in the fast-evolving global AI race.
