Chinese artificial intelligence startup Moonshot AI is in discussions with Microsoft, Amazon, and Alphabet's Google to allow these US cloud giants to host its Kimi K3 model, according to a Reuters report citing three people familiar with the matter. The talks could lead to the first major revenue-sharing arrangement between a Chinese AI firm and a leading US cloud provider, potentially giving Moonshot access to a much larger pool of enterprise customers.
Moonshot is seeking as much as a 30% share of revenue generated from Kimi K3-related services hosted on Microsoft Azure, Amazon Web Services, and Google Cloud, the sources said, speaking on condition of anonymity because the discussions are private. The proposed terms would be consistent with arrangements the startup has outlined for major customers using its open-weight model.
The negotiations remain at an early stage and may not result in agreements, the sources cautioned. Moonshot did not respond to Reuters' request for comment, while Microsoft, Google, and AWS declined to comment.
US-China AI tensions
The talks underscore the growing appeal of Chinese AI models in international markets, particularly as developers seek lower-cost alternatives to leading Western systems. They also highlight the complicated relationship between Chinese AI developers and US technology companies, which face export controls on advanced AI chips to China due to national security concerns.
US officials have increasingly scrutinized Chinese AI companies and their access to computing resources. Treasury Secretary Scott Bessent said last month he could consider adding Moonshot to a trade blacklist. US officials have also accused the Beijing-based startup of stealing from Anthropic's most sophisticated model, Fable, to help develop Kimi K3 and of illegally obtaining Nvidia chips. Moonshot has rejected these claims, telling China's National Business Daily that improvements in Kimi K3 came from original changes to its underlying architecture.
Revenue split unresolved
Several issues remain unresolved in the negotiations, including how revenue would be divided, data access, and the auditing of token usage, according to one source. Tokens are the units of text processed by AI models, and tracking their use is critical to determining revenue under usage-based pricing arrangements.
The potential agreements would give Moonshot another route to enterprise customers. Although Kimi K3 is an open-weight model that can be downloaded and modified, analysts expect relatively few companies to operate a system with 2.8 trillion parameters on their own infrastructure due to substantial computing requirements.
Moonshot has already signed similar agreements with smaller cloud platforms, the sources said. In July, Chinese IT services company Chinasoft International said it had reached a revenue-sharing agreement with Moonshot, though it did not disclose financial terms.
Kimi K3 gains attention
Kimi K3 has posted strong results in third-party evaluations. Arena.ai ranked the model first in a benchmark focused on web interface-building capabilities, while Artificial Analysis said its performance was comparable to OpenAI's GPT-5.5 and Anthropic's Claude Opus 4.8 on tests involving complex, multi-step tasks.
Founded in 2023 by Carnegie Mellon-trained AI researcher Yang Zhilin, Moonshot is backed by Chinese technology companies including Alibaba. The startup raised more than $2 billion in May and is preparing for a potential Hong Kong listing, according to sources. Alibaba is also seeking revenue-sharing agreements with major users of its own new open-source AI model, highlighting the growing importance of commercial distribution channels for China's AI developers.
These developments come amid broader market movements in the AI sector, such as Marvell's valuation under scrutiny following its Google deal, and Microsoft's stock slide on AI chip deployment concerns. Investors are closely watching how AI infrastructure deals shape the competitive landscape.
This article is for informational purposes only and does not constitute financial advice.
