Chinese AI startup Moonshot AI has temporarily paused new subscriptions for its recently launched Kimi K3 model after demand exceeded its current capacity. The company announced on Sunday, July 20th, 2026, that since the release of Kimi K3, it has experienced "unprecedented compute challenges" with user requests sharply exceeding forecasts over the past 48 hours and nearing the limits of its existing clusters.

Moonshot unveiled Kimi K3 on Friday as a 2.8 trillion-parameter model, which it claims is the world's largest open-weight AI system. The strong reception for Kimi K3 has contributed to the capacity bottleneck.

Founded in 2023 by AI researcher Yang Zhilin, who studied at Pittsburgh-based Carnegie Mellon University, Moonshot is among China's most closely watched AI startups. It raised over US$2 billion in May from investors including Meituan, China Mobile, and CPE, bringing its total fundraising to more than US$5.5 billion. The company's valuation reached US$30 billion in June, and it is currently seeking up to US$2 billion in fresh capital.

Moonshot is also in the process of unwinding its offshore structure in preparation for a potential initial public offering (IPO) in Hong Kong. The company has engaged financial advisers such as Goldman Sachs and China International Capital Corp to discuss the IPO plan, although the timetable remains fluid.

Alibaba, an investor in Moonshot, announced on Sunday that its own 2.4-trillion-parameter model, Qwen3.8-Max-Preview, had debuted on its AI platforms ahead of a planned open-weight release.

Notably, Moonshot remarked, "Kimi K3 has received far more love than we expected, and our GPUs are feeling it," highlighting the unexpected surge in user demand.

Sources