Moonshot has priced Kimi AI’s K3 model at just $15 per million output tokens, significantly undercutting Anthropic Fable 5’s $50 price tag|@Kimi_Moonshot|X

China-based Moonshot AI lab recently unveiled the Kimi K3 large language model, which it claims performs “competitively” with Anthropic’s Fable 5 and OpenAI’s GPT 5.6 Sol, and costs a fraction as much for users.

Moonshot has priced K3 at just $15 per million output tokens, significantly undercutting Fable 5’s $50 price tag. K3 also reportedly outperforms recent versions of GPT and Claude on major revenue-generating coding and agentic tasks.

The debut rattled global markets and intensified a semiconductor selloff. TSMC shares fell 7%, and SoftBank dropped 9%.

In the US, the tech-heavy Nasdaq 100 dipped 1%, while Meta dropped over 2.4% and Nvidia slid 1.2%.

Experts note the shake-up was similar to the one when Chinese AI app DeepSeek released its R1 open-source model last January.

Founded in 2023, Moonshot previously gained traction when its Kimi 2.5 model was integrated into Cursor’s Composer 2 agent in March.

Kimi’s capabilities pose a direct threat to OpenAI and Anthropic, both of which are eyeing IPOs this year.