Chinese AI startup Moonshot AI developed its latest model, Kimi K3, using computing infrastructure provided by major investor Alibaba, Bloomberg reported, citing sources familiar with the matter.[2][3] The setup reportedly involved about 20,000 Nvidia chips and helped power much of the computing capacity used for the Kimi series.[2][3]
Kimi K3 was unveiled last month at the World Artificial Intelligence Conference in Shanghai as the largest open-weight model ever released, and its debut rattled global tech markets.[2][3] Bloomberg said the model’s performance also fueled frustration inside Alibaba, since Kimi K3 reportedly outperformed Alibaba’s own AI models on several benchmarks.[2][6]
The report highlights a key tension in China’s AI sector: Alibaba is both an investor in Moonshot and a cloud infrastructure provider, while also building competing AI systems of its own.[2][3] Alibaba has denied claims that the chips it provided were H200s, calling that allegation unfounded, but it did not deny supplying Nvidia chips for Moonshot’s use.[2][6][7]
The case also underscores a loophole in U.S. export controls, which focus on tracking chips physically crossing borders rather than access through cloud-based leasing arrangements.[2][3] The U.S. Commerce Department’s Bureau of Industry and Security revised related guidance on May 31, but said existing data centers can continue operating, and Kimi K3 training has already been completed with the model weights fully released.[1][2]
