Moonshot AI's Kimi K3 triggers global tech selloff — a new 'DeepSeek moment'

What happened

Moonshot AI released Kimi K3 on July 17, 2026 — a 2.8-trillion-parameter open-weight MoE model that rivals all US frontier models except Anthropic Claude Fable 5 and OpenAI GPT-5.6 Sol. The release triggered a global selloff in AI and semiconductor stocks, drawing comparisons to January's 'DeepSeek moment'.

Context and impact

TSMC fell 7% despite reporting a 77% jump in quarterly operating profit. SoftBank dropped 9%, Nvidia lost 1.2%, and Meta fell over 2.4%. Z.ai, a competing Chinese AI startup, plunged nearly 30% in Hong Kong trading. Kimi K3 is the world's largest open-weight model as of its launch date.

Details

• 2.8T total parameters, open-weight (downloadable)
• Outperforms all rivals except Claude Fable 5 and GPT-5.6 Sol on overall capability
• Built on Kimi Delta Attention and Attention Residuals, activates 16 of 896 experts
• Release caused a selloff despite TSMC's strong Q2 results (77% operating profit jump)
• Bloomberg, Fortune and CNBC labeled it a second 'DeepSeek shock'