China’s Moonshot AI in Negotiations with US Cloud Titans
Chinese technology firm Moonshot AI is currently engaged in talks regarding revenue-sharing agreements with leading U.S. cloud providers Microsoft, Amazon, and Alphabet’s Google.
These discussions would permit the American tech giants to host Moonshot’s high-profile Kimi K3 artificial intelligence model, as confirmed by three insiders familiar with the negotiations.
A successful agreement could signify a landmark revenue-sharing arrangement between a Chinese AI enterprise and a prominent U.S. cloud entity.
The negotiations underscore the rising momentum of China’s notable AI models, which are frequently far more cost-effective than their Western counterparts.
This advancement occurs even amid escalating national security apprehensions in Washington that have prompted restrictions on the export of AI chips to China.
Additionally, the talks persist despite disparaging remarks from high-ranking U.S. officials concerning Moonshot’s activities.
Moonshot, which is on the cusp of an initial public offering (IPO), is reportedly seeking up to a 30 percent share of the revenue accrued from K3-related services across Microsoft’s Azure, Amazon Web Services, and Google Cloud, according to anonymous sources who insisted on confidentiality due to the private nature of the discussions.
This stipulated percentage aligns with earlier terms that have been delineated for substantial customers leveraging the open-weight model.
However, it’s important to note that the negotiations remain in their infancy, with no assurance that they will culminate in finalized agreements, according to those familiar with the situation.
Moonshot has yet to respond to inquiries regarding the prospective deals, while representatives from Microsoft, Google, and AWS have opted not to comment on the matter.
The company has faced scrutiny from U.S. Treasury Secretary Scott Bessent, who indicated last month that he could potentially add Moonshot to a trade blacklist.
U.S. officials have accused the Beijing-based firm of appropriating elements from Anthropic’s advanced model, Fable, to enhance Kimi K3 and of unlawfully acquiring Nvidia chips.
Moonshot has vehemently denied allegations that the performance of Kimi K3 was achieved through distillation, asserting in an interview with China’s National Business Daily that its enhancements stem from original modifications to the underlying architecture.
OUTSTANDING ISSUES IN THE NEGOTIATIONS
As detailed by one source, key unresolved issues in Moonshot’s discussions with U.S. cloud entities encompass the distribution of revenue, access to data, and the auditing of token utilization.
Tokens represent the units of text processed by AI models, and accurately measuring their usage is pivotal for computing revenue within a usage-based billing framework.
Kimi K3 has gained acclaim in third-party assessments, with Arena.ai ranking it the highest in a benchmark focused on web interface-building capabilities.
Additionally, Artificial Intelligence Analysis has indicated that its performance rivals that of OpenAI’s GPT-5.5 and Anthropic’s Claude Opus 4.8, especially in evaluations assessing intricate, multi-step tasks.
For prominent AI model providers such as Moonshot, collaboration with major cloud services presents the principal avenue to penetrate enterprise markets.
Despite Kimi K3 being an open-weight model, allowing for download and modification, analysts contend that few customers would elect to operate a system housing 2.8 trillion parameters on their own infrastructure due to the exorbitant computational expenses involved.
Sources indicate Moonshot has formed similar agreements with a handful of smaller cloud platforms, though specific details have not been disclosed.
In July, Chinasoft International, a Chinese IT services provider, announced it had established a revenue-sharing agreement with Moonshot, although the particulars regarding revenue distribution remain undisclosed.
Founded in 2023 by Yang Zhilin, an AI researcher trained at Carnegie Mellon, Moonshot has garnered support from numerous Chinese tech behemoths, including Alibaba, a prominent player in cloud computing.
Furthermore, sources indicate that Alibaba is also pursuing revenue-sharing arrangements with significant users of its newly developed open-source AI model.
Source link: Business-standard.com.
