China’s Moonshot AI challenges OpenAI with ultra-cheap model

Chinese startup Moonshot AI has released a new artificial intelligence model that costs far less to use than rivals from OpenAI and Anthropic. The move signals a price war in the fast-growing AI industry. The company’s latest model, called Kimi K2, charges users about one-tenth the price of comparable systems. Moonshot claims it performs nearly as well on standard tests. “We want to make AI accessible to everyone,” a company spokesperson said. “High costs have been a barrier.” The launch comes as global AI firms race to lower prices while maintaining quality. OpenAI’s GPT-4 and Anthropic’s Claude remain popular but expensive. Moonshot, based in Beijing, has raised over $1 billion from investors. Its strategy mirrors that of Chinese tech firms that previously disrupted markets with cheaper smartphones and electric vehicles. Industry analysts say the low-cost model could pressure Western companies to cut prices. “This is a direct challenge to the current pricing structure,” said one analyst. The model is now available to developers and businesses through Moonshot’s cloud platform.