Moonshot AI, the Chinese startup behind the open-source Kimi K3 model, has a computing power agreement with Alibaba Group for the use of around 20,000 Nvidia chips, Bloomberg reported on July 31, citing people with knowledge of the companies’ operations.
That hardware forms a substantial chunk of the overall computing capacity Moonshot uses for its Kimi models, according to the people, who requested anonymity to describe a confidential deal. The report underscores China’s continued reliance on Western semiconductors to fuel its AI development despite US export controls.
Moonshot burst onto the global stage earlier this month with the debut of Kimi K3, an open-source AI model that goes nearly toe-to-toe with the leading models from the likes of OpenAI and Anthropic on some metrics. The release of the model, described as the largest open-source AI model to date, rattled global markets and triggered sharp selloffs in chip stocks when it was announced in mid-July.
Alibaba Cloud and Huawei’s Ascend unit both announced day-zero support for Kimi K3, a sign of how deeply Moonshot is integrated into China’s AI ecosystem. Bloomberg’s reporting reveals that Alibaba’s computing relationship with Moonshot extends to hardware procurement, giving the startup access to Nvidia GPUs at a scale most Chinese rivals cannot match.
The arrangement highlights the limits of US export restrictions, which bar sales of advanced Nvidia processors to China without licenses. Moonshot is also reportedly seeking more Nvidia Blackwell chips for its next model, while preparing for a potential Hong Kong initial public offering.
The news adds to a contentious backdrop: US officials have accused Moonshot of distilling Anthropic’s Claude models without authorization, a claim the company denies. The Bloomberg report suggests that even as Washington tightens controls, Chinese labs continue to secure Western compute through cloud partners and other channels.
For the global AI race, the disclosure underscores how open-source Chinese models are closing the gap with US frontier labs, and how cloud giants like Alibaba have become crucial conduits for advanced chips. Analysts say the arrangement could intensify scrutiny of cloud providers that route Nvidia hardware to Chinese AI developers.
Sources: Bloomberg, WinBuzzer, Seeking Alpha