Battle for yuan: Moonshot AI nears a $10 billion valuation

The Battle for Yuan: Moonshot AI Storms Toward a $10 Billion Valuation

Chinese startup Moonshot AI has found itself at the center of a turbulent investment cycle, initiating a new funding round with a valuation exceeding $10 billion. This comes against the backdrop of its recent $700 million fundraising from giants like Alibaba and Tencent. Market optimism is fueled by the impressive successes of competitors Zhipu AI and MiniMax, whose market capitalizations have surged multiple times following their initial public offerings (IPOs) in Hong Kong.

While startups actively compete to attract capital, tech giants such as ByteDance and Alibaba wage aggressive marketing wars, spending billions promoting their chatbots Doubao and Qianwen. Analysts emphasize that participating in the race for large language models (LLMs) requires colossal spending — up to $700 million annually just for developing foundational models.

The beginning of the year was marked by an influx of capital into China's large language model market. On one hand, major players like ByteDance, Alibaba, and Tencent spend billions of yuan distributing gifts and driving traffic to their flagship AI applications. On the other hand, startups known as the "Six Tigers" of large models demonstrate rapid stock growth and active fundraising. In this race for capital, the largest deal of the year's beginning is Moonshot AI's financing.

It was previously reported that Moonshot AI was preparing to complete a funding round exceeding $700 million, with participation from existing investors such as Alibaba, Tencent, Source Code Capital, and Ascendent Medical, with oversubscription. Simultaneously, the company launched a new funding round with a valuation of $10–12 billion. According to exclusive information, in the over-$700 million round, a new investor — Cathay Innovation — joined existing investors including Source Code Capital, marking their first investment in a large models company. The new funding round with a valuation exceeding $10 billion has already attracted interest from several institutional investors, including funds with European capital. At the time of publication, Moonshot AI provided no comment on this information.

The situation surrounding Moonshot AI's fundraising is characterized by high competition. Sources report that investors showed active interest since mid-2025, when the company began raising funds. This round attracted funds making their first investment in large models. For example, Cathay Innovation, which had previously announced a strategy focused on practical applications and ecosystems, now invested in Moonshot AI. This evidences growing hype comparable to the initial surge of interest in large models in early 2023, known as FOMO (fear of missing out).

The primary driver of this surge was the rapid increase in market capitalization for Zhipu AI and MiniMax following their Hong Kong IPOs. After listing in early 2026, both companies' stock prices grew significantly. Particularly after launching new models in February 2026, their market values reached new peaks: Zhipu AI exceeded HK$220 billion, and MiniMax reached HK$260 billion, 4–5 times their initial valuations. The attractiveness of the secondary market prompts primary market investors to seek opportunities in companies like Moonshot AI before their public debuts.

Hong Kong IPOs have also expanded the influence of Chinese large models onto the international stage. European investors, previously less active in financing Chinese tech companies, now show interest in Moonshot AI. High-speed decision-making was a key factor in securing a stake in Moonshot AI's previous $700 million funding round. The new round with a valuation exceeding $10 billion was essentially initiated by those who failed to secure a stake in the previous round.

The market capitalizations of Zhipu AI and MiniMax serve as benchmarks for valuing other large models companies. Previously, valuations of Moonshot AI and Baichuan AI were relatively low. Despite the current valuation exceeding $10 billion, they still significantly lag Zhipu AI (approximately $28 billion) and MiniMax (approximately $33 billion).

Confirmation of model company values on the secondary market changed the funding strategy of Moonshot AI and Baichuan AI: since mid-2025, they transitioned to continuous fundraising for rapid valuation increases. Thus, after announcing completion of a $500 million funding round in late December 2025, Moonshot AI immediately began a new $700 million round, followed by the current round with a valuation exceeding $10 billion. In just two months, Moonshot AI's valuation grew more than 2.

2 times.

Currently, all four leading large models startups are accelerating their capital acquisition on primary and secondary markets. Their main competitors — ByteDance, Alibaba, and Tencent — have already outpaced them, entering an active spending phase to attract users. Holiday advertising spending, including distributing billions of yuan in bonuses and promotion through popular platforms, evidences large companies' drive to dominate the "public AI applications" market.

For the four remaining startups, maintaining positions in the first tier of technological development is a paramount task. Baichuan AI chairman Ying Qi recently noted that maintaining competitiveness in foundational model development requires annual investments of 3–5 billion yuan. High valuations and investor willingness to fund on primary and secondary markets are optimistic signals for startups.