Moonshot AI Negotiates K3 Revenue Sharing with Tech Giants
China’s Moonshot AI is in discussions regarding revenue-sharing agreements with Microsoft, Amazon, and Alphabet’s Google, which would enable the US cloud giants to host its highly anticipated Kimi K3 model, according to three individuals familiar with the negotiations. Any deal could signify the inaugural substantial revenue-sharing agreement between a Chinese AI firm and a prominent US cloud company. The discussions underscore the increasing traction of China’s leading AI models in the US market, which are frequently more affordable than their Western counterparts. This trend persists despite the national security apprehensions in Washington that have resulted in export bans on AI chips to China. They are also occurring despite critical remarks regarding Moonshot from high-ranking US officials. IPO-bound Moonshot is aiming for as much as a 30 percent share of revenue derived from K3-related services on platforms such as Microsoft’s Azure, Amazon Web Services, and Google Cloud, according to sources.
That would align with the terms that sources have indicated the startup has established for significant customers utilising the open-weight model. The discussions are currently in their preliminary phase, and there is no assurance that they will culminate in agreements, according to the sources. Moonshot did not respond to a request for comment regarding the potential deals. Microsoft, Google, and AWS refrained from providing any comments. Moonshot has faced criticism from US Treasury Secretary Scott Bessent, who indicated last month that it could potentially be included on a trade blacklist. US officials have accused the Beijing-based company of appropriating elements from Anthropic’s most advanced model, Fable, to assist in the development of Kimi K3, as well as unlawfully obtaining Nvidia chips. Moonshot has dismissed claims that Kimi K3’s performance was attained through distillation, asserting to China’s National Business Daily last month that the enhancements in performance stemmed from fundamental modifications to the underlying architecture.
One source indicates that ongoing negotiations between Moonshot and US cloud companies remain unresolved on several key issues, including the division of revenue, access to data, and the auditing of token usage. Tokens represent segments of text that AI models analyse, and quantifying their utilisation is crucial for determining revenue within a usage-based billing framework. Kimi K3 has demonstrated robust performance in third-party evaluations. Arena.ai has achieved the top position in a benchmark evaluating web interface-building capabilities, while Artificial Analysis indicates that it offers performance on par with OpenAI’s GPT-5.5 and Anthropic’s Claude Opus 4.8, especially in assessments focused on complex, multi-step tasks. For significant AI model providers such as Moonshot, the primary pathway to enterprise adoption is through major cloud providers. Despite the Kimi K3 being an open-weight model available for download and modification, analysts suggest that it is improbable for many customers to operate a system with 2.8 trillion parameters on their own infrastructure due to the substantial computing costs associated.
Moonshot has entered into comparable agreements with several smaller cloud platforms, according to sources, though specifics were not disclosed. In July, Chinasoft International, a Chinese IT services provider, announced a revenue-sharing agreement with Moonshot, although the specifics of the revenue distribution remain undisclosed. Founded in 2023 by Carnegie Mellon-trained AI researcher Yang Zhilin, Moonshot is supported by several prominent Chinese technology firms, including the cloud computing leader Alibaba. The startup secured over $2 billion in May and is reportedly gearing up for a possible listing in Hong Kong, according to sources. Alibaba is pursuing revenue-sharing agreements with significant users of its new open-source AI model, sources have indicated.
