Moonshot Launches Kimi K2 AI Model 85% Cheaper Than US Rivals

In a significant development in the AI landscape, Alibaba-backed startup Moonshot has introduced its latest large language model, Kimi K2, designed to compete with prominent models like OpenAI’s ChatGPT and Anthropic’s Claude Opus 4. The model, released late Friday, not only matches or exceeds the performance of its US-based counterparts but is also notably cheaper and fully open-source.

This launch comes at a pivotal moment, as just hours later, OpenAI’s CEO, Sam Altman, announced a delay in the release of their first open-source model, citing safety concerns. This move highlights the contrasting strategies between Chinese and American AI firms, with Moonshot’s approach emphasizing accessibility and cost-effectiveness.

Kimi K2’s standout feature is its advanced coding capabilities, which are increasingly sought after by companies looking to leverage generative AI for cost-effective developer assistance. Moonshot’s announcement on X and GitHub claimed that Kimi K2 outperformed Anthropic’s Claude Opus 4 in two key benchmarks and surpassed OpenAI’s GPT-4.1 in several areas. AI analyst Wei Sun from Counterpoint noted that the model is “globally competitive” and emphasized that its open-source nature adds to its appeal. Additionally, Kimi K2 offers lower token costs, making it attractive for large-scale or budget-sensitive deployments.

In terms of cost, Kimi K2 is available for free through Kimi’s app and web browser. For commercial use, the pricing is highly competitive: 15 cents per million input tokens and $2.50 per million output tokens. In comparison, Claude Opus 4 charges $15 and $75, respectively, while GPT-4.1 costs $2 for input and $8 for output tokens. Moonshot has made Kimi K2 accessible to all developers with minimal restrictions, requiring only that commercial services with over 100 million monthly users or making $20 million per month include a “Kimi K2” credit on the interface.

The model has received generally positive feedback, although some users on social media have reported hallucination issues, a common problem with generative AI tools. Pietro Schirano, founder of AI startup MagicPath, praised Kimi K2 as the first model he feels comfortable using in production since Claude 3.5 Sonnet, highlighting its reliability and efficiency in tool calling and agentic loops.

Moonshot has been establishing itself as a ChatGPT alternative in China since early last year. While competitors like ByteDance and Tencent have also entered the generative AI race, Moonshot’s focus on quality and accessibility has garnered it a loyal user base. The company’s earlier AI releases were already open-source, a rarity in the tech landscape. With Kimi K2, Moonshot is making a more global push, especially as US companies hesitate to fully open their models.

Other Chinese firms are also making significant moves. DeepSeek, which gained attention earlier this year, has yet to release major updates. Meanwhile, Manus AI, another promising startup, recently shifted its base to Singapore, possibly seeking a more neutral ground amid rising geopolitical tensions. Kimi K2 is not Moonshot’s only recent success; the company launched another research-focused model last month, which performed impressively on the “Humanity’s Last Exam” benchmark, matching Google’s Gemini Deep Research score of 26.9 and surpassing OpenAI’s performance on the same test. This model even caught attention during Elon Musk’s release of Grok 4, which scored lower unless enhanced with extra tools and web access.

Winston Ma, a professor at NYU School of Law and author of The Digital War, described Moonshot’s new researcher model as a “paradigm shift.” He pointed to its ability to reason independently and complete complex tasks, a level of autonomous thinking not often seen in earlier large language models. “Instead of merely generating fluent responses, it demonstrates autonomous reasoning at an expert level — the kind of complex cognitive work previously missing from LLMs,” said Ma.

As US tech giants grapple with balancing innovation and safety, China’s new AI players, particularly Moonshot, are stepping into the spotlight with cheaper, open, and increasingly powerful tools. This development underscores the growing competition and innovation in the AI sector, with Chinese firms leveraging their unique strategies to challenge established players.