The contest between China and the United States for supremacy in artificial intelligence escalated on Friday when the Chinese start-up Moonshot AI released a new A.I. model that appeared to narrow the lead held by well-funded American competitors.
Moonshot said that the model, Kimi K3, was the world’s largest open-source A.I. system, allowing anyone to use, modify and build on it freely. The company said that Kimi K3 performed as well as leading models from OpenAI and Anthropic at some key tasks.
The release coincided with an address by Xi Jinping, China’s leader, in which he outlined an ambitious vision for global A.I. development that cast China as the champion of an open approach to the technology.
“A.I. development should not be a solo performance by a single country but a symphony of international cooperation,” Mr. Xi said. China was “ready to work with all parties to seize the opportunities of A.I. development,” he said.
The market reaction was immediate. Stocks fell on Friday, with the Nasdaq dropping about 1 percent as investors sold shares of companies that make the computer chips needed to power A.I., including Nvidia and Intel.
The developments underscored the geopolitical stakes of the U.S.-China contest for leadership in what many see as the defining technological race of our time. President Trump has repeatedly framed maintaining America’s lead in artificial intelligence as a strategic imperative for preserving the country’s economic and national security.
The emergence of A.I. as a foundational technology with far-reaching economic and military implications has pushed the United States to slow China’s progress by restricting its access to the advanced chips needed to train cutting-edge A.I. systems.
The release of a free, open-source Chinese A.I. model that could rival the performance of costly, computing-intensive systems from Silicon Valley’s best-funded companies has reignited concerns over whether the industry’s enormous spending spree on data centers is justified.
Over the past 18 months, Chinese technology companies have released a steady stream of open-source A.I. models that approach the performance of their American rivals, while claiming to require fewer computing resources. That combination of strong performance and lower costs has made Chinese A.I. systems the preferred choice for many developers worldwide.
Moonshot’s latest release adds to that momentum and raises the prospect that a Chinese company could soon match — or even surpass — the cutting-edge models built by leading American A.I. firms, which have raised hundreds of billions of dollars to build models that are closed and expensive to operate.
According to benchmarks run by Vals AI, an independent company that evaluates the performance of A.I. models, Kimi K3 performs just below Anthropic’s Fable 5 model while outperforming OpenAI’s flagship GPT-5.6 Sol model, said Rayan Krishnan, Vals AI’s chief executive.
The latest A.I. models from Anthropic have become so powerful that their capabilities — including identifying vulnerabilities in critical infrastructure such as banking networks and power grids — have alarmed governments around the world.
Graham Webster, a Stanford University professor who studies China’s open-source A.I. ecosystem, said it did not matter much whether a model was at the absolute cutting edge, because the performance gap between leading American and Chinese models had narrowed.
“Everyone has a different number about how many months China is behind the U.S., and the estimates cluster around six months,” he said. “That is not much of a lead.”
Moonshot said it would release the full details of Kimi K3 at the end of the month.
Samm Sacks, a senior fellow at the Johns Hopkins School of Advanced International Studies who attended Friday’s A.I. conference in Shanghai where Mr. Xi spoke, said that many experts believe it’s only a matter of time before a Chinese company releases a freely available model that matches Anthropic’s most advanced systems. Such a breakthrough, Ms. Sacks said, would raise difficult questions for regulators trying to contain powerful A.I. technology once it has been released.
Last month, another Chinese start-up, Z.ai, released a model called GLM-5.2 that was nearly as powerful as Anthropic’s Fable 5 model, the leading American system. And unlike Fable, this Chinese model was widely available.
Many software developers and start-ups in Silicon Valley quickly adopted the model, largely because it was much cheaper than the leading American systems. It arrived just as U.S. businesses realized they had to find ways to cut down their A.I. spending.
Kimi K3 is even more powerful than GLM-5.2, according to benchmarks run by Vals AI. The model arrives as the Trump administration is considering regulating the technology. Many Silicon Valley executives have begun to support such regulation, saying that leading technologies can enable malicious cyberattacks and potentially help build biological weapons.
Xinyun Wu contributed research from Taipei.
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