Founded in March 2023, Monshot AI won in record time as a central player in artificial intelligence in China. With a valuation reaching $ 3.3 billion in August 2024, the startup owes its ascent to its flagship product, Kimi, a chatbot capable of processing up to two million characters in a single request.
Kimi’s architecture is based on an innovative concept, the “long-controlled lossless”, which makes it possible to absorb and analyze large quantities of text without loss of context. This advance is partly based on the research carried out by Yang Zhilin, co -founder of Moshot AI, during his doctorate in Carnegie Mellon and his passages at Meta and Google Brain. Its contributions to the Transformer-XL and XLNET models paved the way for a significant extension of the contextual memory of language models.
Moonshot AI’s ambition is part of a broader perspective than the only competition with the Chinese AI giants. Yang Zhilin has always rejected the idea of building a Chinese Openai equivalent, insisting on the need to develop a global artificial intelligence, freed from national borders. Halfway between tech idealism and a pragmatic approach inspired by the Bytedance model, he defends a strategy that combines radical and imperative innovation of monetization.
But this desire for grandeur meets its first limits. If the ability to deal with immense volumes of text gives an undeniable competitive advantage, it also generates increasing costs and tensions on technical infrastructure. Service interruptions and increased latency have tarnished the user experience, weakening Monshot’s position in the face of competitors like Baidu and Baichuan, who bet on more optimized architectures.
On the economic level, the exclusive dependence on the consumer market in Place Monshot Ai in a complicated position. Unlike other Chinese AI actors who combine consumer and government contracts, the startup has opted for a consumer innovation model. This choice directly exposes it to market fluctuations and a price war that groups such as Baidu and Bytedance are already led. The drop in IA services prices in China has forced Moonshot to adjust its offer, thus reducing its margins and testing its economic model.
At the same time, the stability of the company is questioned by internal tensions and conflicts of interest that splash its management team. An arbitration procedure initiated in Hong Kong by former investors of Recurrent AI, the previous enterprise of Yang Zhilin, questions the legitimacy of the fundraising made for Moshot. At the center of the case, Zhang Yutong, a former partner of GSR Ventures, is accused of having concealed a 14 % stake in Monshot while playing a key role in the introduction of Alibaba to the capital. News that have thrown a shadow on the startup and can be substantial for its future funding.
