Moonshot is targeting a valuation of $10 billion in an expansion of a funding round already backed by Alibaba Group Holding Ltd. and Tencent Holdings Ltd., seeking to tap strong interest in Chinese startups creating AI models to rival Silicon Valley’s best.

The company behind the Kimi chatbot kicked off discussions in late January around additional financing to satisfy demand from investors, people familiar with the matter said, just about a month after securing $500 million in funding at a $4.3 billion valuation.

Existing backers, including Alibaba, Tencent and 5Y Capital, have already committed more than $700 million to the first tranche of the latest round, people in the know, who asked not to be named, told Bloomberg.
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Representatives of Moonshot, Alibaba and 5Y didn’t respond to requests seeking comment. A Tencent spokesperson declined to comment.

The speed with which Moonshot is raising funds reflects investor eagerness for bets on a coterie of Chinese startups that are trying to compete with the likes of OpenAI and Anthropic PBC in developing world-class AI services. Beijing-based Moonshot last month released its Kimi K2.5, leading a wave of major Chinese AI model upgrades ahead of the crucial weeklong Lunar New Year holiday.

K2.5 is among the most-used large language models on the distribution platform OpenRouter, well ahead of rivals like DeepSeek and Alphabet Inc.’s Google Gemini. In terms of performance, K2.5 now ranks second among open-source models on benchmarking site Artificial Analysis, eclipsed only by Chinese rival Zhipu’s newest release, GLM-5.

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Talks around the financing are progressing, and it’s not certain if Moonshot can hit its target valuation, the people said. At $10 billion, the startup would still undershoot closest rivals Zhipu and Minimax Group Inc., both of which are valued at more than $29 billion after a pair of popular initial public offerings this year. The duo, among the world’s first major LLM makers to go public, collectively raised more than $1 billion in Hong Kong listings.

Moonshot was founded by former Tsinghua University professor Yang Zhilin, who had earlier stints working on AI projects at Meta Platforms Inc. and Google. The company sells tiered subscription plans for its chatbot and offers its underlying technology to enterprise clients, but it trails the likes of Zhipu and MiniMax in commercialisation.

Moonshot holds 10 billion yuan ($1.4 billion) in cash and is in no rush for an IPO, Yang wrote in an internal memo in December. Paying users both in China and overseas markets grew more than 170% month-on-month during the September-to-November period, according to the memo. This week, it launched a cloud service for its paid users to host the popular OpenClaw agent.