^{Photo: South China Morning Post}

Moonshot AI’s valuation climbs in fresh funding round

Moonshot AI, a Chinese artificial intelligence startup backed by Alibaba, is being valued at approximately $4.8 billion in a new funding round, according to two people familiar with the matter. The figure represents a roughly $500 million increase from the company’s valuation just weeks earlier, highlighting rapidly growing investor enthusiasm for China’s domestic AI champions.

The latest round comes after Moonshot was valued at about $4.3 billion in December. Sources said the deal is close to completion and has attracted strong demand, suggesting that the company could command even higher valuations in future rounds if market conditions remain favorable.

Moonshot AI did not respond to a request for comment.

Riding the momentum of China’s AI listings

Investor interest in Moonshot has intensified following the successful Hong Kong initial public offerings of two rival Chinese AI companies, Zhipu and MiniMax, earlier this year. Since listing, both firms have seen sharp gains in their market capitalizations, reinforcing confidence in the sector.

As of the latest trading session, Zhipu, which is listed under the name Knowledge Atlas, carried a market value of around $13 billion, while MiniMax was valued at approximately $15.2 billion, according to market data. These public market benchmarks have become key reference points for private investors assessing the next generation of AI IPO candidates.

Sources said the strong post-IPO performance of these rivals has prompted investors to reassess Moonshot’s growth potential, accelerating demand in its current funding round.

Kimi chatbot drives early popularity

Moonshot AI is best known for Kimi, a conversational AI chatbot that gained widespread attention in China months before the release of DeepSeek last year. Kimi’s rapid adoption helped establish Moonshot as one of the most visible domestic alternatives to U.S.-developed AI tools.

The company’s growth has been supported by the unique dynamics of China’s technology market, where many leading U.S. AI services, including OpenAI’s ChatGPT, are not officially available. This has created space for local startups to scale quickly and capture user demand without direct competition from some of the world’s largest AI platforms.

Geopolitics and regulation reshape the AI landscape

The rise of companies like Moonshot is also tied to broader geopolitical and regulatory trends. Beijing continues to restrict access to many U.S.-based internet services, while U.S. policymakers have imposed tighter controls on American companies doing business with China, particularly in advanced technologies.

These constraints have accelerated the development of a largely self-contained Chinese AI ecosystem, backed by domestic capital and major technology firms. Moonshot’s previous funding round, announced on December 31, included participation from IDG Capital, Alibaba, and Tencent, underscoring strong local institutional support.

What comes next for Moonshot AI

According to people familiar with the matter, the current funding round could be followed by additional capital raises, especially if investor interest in Chinese AI IPO candidates continues to build. While Moonshot has not publicly commented on any plans to go public, its rising valuation and growing profile place it among the most closely watched private AI companies in China.

With public markets rewarding peers and domestic demand for AI tools continuing to expand, Moonshot AI’s latest valuation increase reflects more than short-term enthusiasm. It signals a broader reassessment of China’s AI sector as a significant force in global technology and capital markets.

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