Moonshot AI’s release of the 2.8-trillion-parameter Kimi K3 open-weight model sent global semiconductor stocks tumbling on Friday, as investors reacted to the emergence of another competitive Chinese AI system built despite U.S. export restrictions on advanced chips.
The model, which Moonshot claims is the largest open-weight system ever released, triggered what analysts described as flashbacks to the DeepSeek selloff in early 2025, when a similarly unexpected Chinese AI breakthrough caused a sharp market correction. Major chip stocks including Nvidia, AMD, and ASML all experienced notable declines during Friday trading.
Kimi K3’s release is significant not only for its scale but for the architectural innovations it employs. Moonshot developed the model using what it calls Kimi Delta Attention and Attention Residuals, techniques designed to improve training and inference efficiency. The model supports a 1-million-token context window and includes native visual understanding capabilities.
The selloff reflects ongoing market anxiety about the effectiveness of U.S. chip export controls. Despite restrictions intended to slow China’s AI progress, companies like Moonshot continue to produce frontier-capability models, raising questions about whether the semiconductor trade barriers are achieving their intended effect or merely accelerating Chinese innovation.
Analysts cautioned that while the immediate market reaction was sharp, the long-term implications may be more complex. The availability of competitive open-weight models could actually expand the AI market, driving demand for inference computing and specialized hardware even as it puts pressure on high-end training GPU pricing.
This article was adapted from Decrypt. Read the original here.
