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Chinese AI startup’s low-cost model challenges US competitors

Jul 16, 2025, 6:28am EDT
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A Deepseek logo.
Florence Lo/File Photo/Reuters

A Chinese artificial intelligence startup released an open-source language model that challenges top US chatbots’ performance at a fraction of the cost.

The release of Moonshot AI’s Kimi K2 shows that the “DeepSeek moment” — in which another cheaply trained Chinese model challenged Western market leaders — of January was not a one-off, Interconnects.ai argued: China is nearing “the absolute frontier” of performance.

The tech writer Azeem Azhar agreed, saying this is the model that should worry Silicon Valley. If DeepSeek represented the AI race’s “Sputnik moment,” shattering “Western assumptions of technological primacy,” he wrote, Kimi K2 is the equivalent of Yuri Gagarin becoming the first man in space four years later, proving that the first event was no fluke.

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