On July 29, Moonshot AI secured $3.5 billion in funding, pushing its valuation to $35 billion, tripling its worth in just six months. This round nearly doubled the company's initial fundraising goal and was led by China’s National Artificial Intelligence Industry Investment Fund.

This state-backed fund is also in talks to lead DeepSeek’s first external funding round, signaling Beijing’s broader strategy to build multiple cutting-edge AI labs rather than betting on a single player. Moonshot’s rapid ascent is fueled by the release of its flagship model, Kimi K3, which launched on July 16 with 2.8 trillion parameters.

Following K3’s debut, daily sales surged sixfold. The company accelerated the model’s open-weights release on July 26-27, enabling developers worldwide to access it. Within days, Chinese open-weight models accounted for 68 percent of token volume in that segment, with high-profile adopters like Mozilla’s CTO embracing the technology.

The Trump administration has revived efforts to ban Chinese AI models, but officials concede that downloadable open weights make a complete ban nearly impossible. Moonshot’s fundraising history reflects its meteoric growth: $700 million at a $10 billion valuation in January, $1 billion at $18 billion in May, and now $3.5 billion at $35 billion.

Bloomberg reports talks are underway for a new funding round valuing the company at $50 billion pre-money, with a possible Hong Kong IPO as soon as late 2026. The National AI Industry Investment Fund, founded in early 2025 with around $8.8 billion backed by China’s semiconductor investment arm, is central to this expansion.

This fund anchors Moonshot’s current round and aims to lead DeepSeek’s IPO-track raise at up to a $50 billion valuation. Together, these two state-supported AI giants are approaching an $85 billion combined valuation. This isn’t just market competition it’s a clear example of China’s industrial policy shaping the frontier AI landscape.

This material is for informational purposes only and does not constitute financial advice.