Moonshot AI Launches Kimi K2 to Reclaim Spot in China’s AI Race

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In a bold move to regain its position in China’s fiercely competitive AI landscape, Moonshot AI has released a powerful new open-source model named Kimi K2, the company announced on Friday.

The new model offers advanced coding performance, stronger agent task handling, and better tool integration. Moonshot claims Kimi K2 outperforms DeepSeek’s V3 model and rivals the performance of top U.S. models such as those from Anthropic, especially in coding-related tasks.

Kimi K2’s launch marks a critical moment for Moonshot AI as it attempts to bounce back in a fast-shifting market. The startup, once known for its dominance in long-text analysis and AI search, has recently seen a drop in popularity. According to Chinese AI tracking platform aicpb.com, its Kimi app, which ranked third in user engagement last August, fell to seventh by June 2025.

Meanwhile, rivals like DeepSeek have surged ahead. In January, DeepSeek disrupted the market by launching R1, a low-cost model that challenged both domestic and international competitors.

Moonshot’s response is part of a growing trend among Chinese AI firms to open-source their technologies. By releasing models to the public, companies aim to build stronger developer ecosystems, demonstrate technological strength, and expand their international reach. This strategy also supports China’s push to counter U.S. restrictions on advanced tech exports.

Unlike U.S. firms such as OpenAI and Google, which typically keep models closed, many Chinese players including Tencent, Baidu, Alibaba, and DeepSeek have chosen to open their models. Moonshot’s new release strengthens that wave.

Founded in 2023 by Tsinghua University graduate Yang Zhilin, Moonshot AI quickly gained attention and support from major Chinese internet firms, including Alibaba. Its earlier success was driven by tools that analyzed lengthy text and answered complex queries effectively.

Now, the company hopes Kimi K2 will restore its momentum by offering developers a high-performance, open-source alternative. In a crowded field, where innovation and transparency are increasingly valuable, Moonshot is betting that open-source AI could be the path back to the top.