China's Moonshot AI is negotiating what could be the first significant revenue-sharing deal between a Chinese AI company and major US cloud providers for its blockbuster Kimi K3 model. According to sources familiar with the matter, the startup is seeking up to a 30% share of revenue generated from K3-related services on Microsoft's Azure, Amazon Web Services and Google Cloud platforms. The discussions represent a historic milestone as they would establish a new commercial framework for Chinese AI models operating on US cloud infrastructure. If successful, these agreements would mark a significant shift in how Chinese AI companies monetize their models in the US market, potentially setting a precedent for future collaborations. As reported by Reuters, the proposed terms would be consistent with arrangements the startup has outlined for major customers using its open-weight model, though the talks remain at an early stage and may not ultimately result in agreements.
Kimi K3 has posted strong results in third-party evaluations, with Arena.ai ranking it first in web interface-building capabilities benchmarks. As reported by sources, Artificial Analysis says it delivers performance comparable to OpenAI's GPT-5.5 and Anthropic's Claude Opus 4.8, particularly on tests measuring complex, multi-step tasks. The model is an open-weight architecture that can be downloaded and modified, though analysts note few customers are likely to run systems with 2.8 trillion parameters due to huge computing costs. For big AI model providers like Moonshot, major cloud providers are the main route to enterprise adoption, making these partnerships crucial for commercial success.
According to sources, unresolved issues in Moonshot's negotiations with US cloud companies include revenue splitting terms, data access and auditing token usage. Tokens represent units of text processed by AI models, and measuring their use is central to calculating revenue under usage-based billing arrangements. The discussions are at an early stage with no certainty they will result in agreements, as confirmed by sources familiar with the talks. Industry observers note that the 30% revenue share ask reads as an opening position rather than a term sheet, with comparable cloud-model arrangements historically settling with the platform side retaining larger economics in exchange for compute commitments, distribution, or both. As reported by Reuters, several issues remain unresolved in Moonshot's negotiations with the US cloud providers, including how revenue would be divided, data access and the auditing of token usage.
The negotiations come despite critical comments from US Treasury Secretary Scott Bessent, who said last month he might add Moonshot to a trade blacklist. As reported by sources, US officials have accused the Beijing-based company of stealing from Anthropic's most sophisticated model, Fable, to help create Kimi K3 and illegally acquiring Nvidia chips. Moonshot has rejected suggestions that Kimi K3's performance was achieved via distillation, telling China's National Business Daily that performance gains came from original changes to underlying architecture. The discussions are taking place despite these regulatory challenges, highlighting the commercial appeal of the model despite political tensions. Washington has imposed restrictions on exports of advanced AI chips to China because of national security concerns, while US officials have increasingly scrutinized Chinese AI companies and their access to computing resources.
Founded in 2023 by Carnegie Mellon-trained AI researcher Yang Zhilin, Moonshot is backed by several Chinese tech giants including cloud computing giant Alibaba. According to sources, the startup raised more than $2 billion in May and is preparing for a potential Hong Kong listing. Alibaba is also seeking revenue-sharing agreements with major users of its new open-source AI model, while Moonshot has signed similar agreements with smaller cloud platforms without providing details. In July, Chinese IT services provider Chinasoft International said it had a revenue-sharing agreement with Moonshot, though it did not disclose how the revenue will be split. The key question remains whether all three major platforms are engaged simultaneously in parallel talks, which typically function as an auction dynamic that firms up pricing for the model developer and often ends with one anchor partner.
