[DigitalToday reporter Seungah Yoo (유승아)] China artificial intelligence (AI) startup Moonshot AI has filed a confidential application for an initial public offering in Hong Kong. The move is seen as an effort to raise funds in the public market needed for rapid business expansion.

On Sept. 4 (local time), the South China Morning Post reported that Moonshot AI is aiming for a Hong Kong listing as early as the first quarter of 2027. The timing could change depending on regulatory approvals and market conditions, the sources said. They requested anonymity because the information is private.

Moonshot AI is also pushing to raise a final round of funding ahead of the IPO. If the funding goes through, the company could be valued at about $50 billion, the sources said.

The IPO and additional fundraising plans show Moonshot AI is rushing to secure funding as Chinese AI labs step up competition with major U.S. AI developers.

Moonshot AI drew attention in July when it unveiled its flagship AI model, Kimi K3. Kimi K3 is the world’s largest open-weight AI model, with more than 2.8 trillion parameters. Parameters are a metric that indicates the scale and complexity of AI systems, and in general, larger scale can make stronger performance more likely.

The release of Kimi K3 also sent shockwaves through the U.S. AI industry. That was because it maintained the price competitiveness typical of Chinese open-source models while showing performance close to key proprietary AI models in Silicon Valley.

At the time of the Kimi K3 launch, Moonshot AI said it had delivered "open cutting-edge intelligence". Citing independent benchmarks, it claimed it outperformed key products from Anthropic and OpenAI in some functions, but acknowledged that "overall performance still lags the most powerful proprietary models".

Kimi K3 is currently ranked among the top Chinese models on AI evaluator Artificial Analysis’ Intelligence Index, alongside Z.ai’s GLM-5.3. The two models currently score 60 points on the index.

Price competitiveness is also cited as a strength. The price for 1 million output tokens for Kimi K3 is 50 percent cheaper than OpenAI’s GPT-5.6 Sol and 70 percent cheaper than Anthropic’s Claude Fable 5. Kimi K3’s output price is $15 per 1 million, GPT-5.6 Sol is $30, and Claude Fable 5 is about $50.

Moonshot AI’s annual recurring revenue (ARR) is also rising quickly this year. ARR is a metric that estimates annual revenue on the assumption that current monthly subscription revenue continues for the next 12 months.

Nomura Securities said in a research note in July that Moonshot AI’s ARR is expected to reach $1 billion by the end of this year. That would be about double the mid-2026 estimate of $400 million to $500 million. Nomura Securities analyzed broader adoption of the developer platform as one factor behind the rapid growth.

Moonshot AI is also in talks with overseas cloud service providers such as Amazon, Microsoft and Google on revenue-sharing agreements to host Kimi K3. If agreements are reached, discussions include having the platforms share up to 30 percent of service revenue generated from hosting Kimi K3 with Moonshot AI. According to Reuters, the two sides are negotiating over the revenue-sharing ratio, data access and audits of token usage.

Chinese AI companies besides Moonshot AI are also pressing ahead with IPO plans. DeepSeek, based in Hangzhou, and Stepfun, based in Shanghai, are also said to be preparing listings.

DeepSeek is pursuing a listing on Shanghai’s Nasdaq-like Star Market while also planning to raise pre-IPO funding, the South China Morning Post reported last month.