Moonshot AI Used 20,000 Nvidia Chips via Alibaba for Rival Model, Report Says

Chinese artificial intelligence startup Moonshot AI leveraged a significant computing agreement with investor Alibaba Group Holding Ltd. to access approximately 20,000 advanced Nvidia chips, according to a report from Bloomberg News. The hardware was reportedly instrumental in developing Moonshot's Kimi K3, a 2.8-trillion-parameter model that has demonstrated capabilities competitive with top systems from U.S. firms like OpenAI and Anthropic.

The Alibaba Partnership

The arrangement underscores the deep ties between the two companies, as Alibaba is one of Moonshot's largest investors. Citing people familiar with the companies' operations, Bloomberg reported that the hardware accessed via Alibaba constitutes a large portion of the total computing power used for Moonshot's Kimi models.

This partnership has reportedly created internal friction within Alibaba. The performance of Moonshot's Kimi model has surpassed that of Alibaba's own Qwen AI products, despite both development teams having access to similar Alibaba-provided infrastructure, leading to disappointment among some at the e-commerce and cloud giant, the report noted.

Scrutiny Over Chip Technology

The specific type of Nvidia chips involved is a key point of interest amid U.S. export controls. The Bloomberg report, citing its sources, identified the chips as Nvidia's Hopper generation, specifically the powerful H200 accelerators, which were the industry standard before the current, heavily restricted Blackwell architecture.

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An Alibaba spokesperson denied providing H200-powered computing to Moonshot but did not deny the broader agreement for 20,000 Nvidia chips, declining to specify the models involved. This development comes as the U.S. government separately accuses Moonshot of illegally acquiring and using newer Blackwell accelerators, allegedly sourced through a third party in Thailand.

Geopolitical and Market Implications

The revelations illustrate the complex strategies Chinese technology firms are employing to remain competitive in the global AI race despite U.S. sanctions. By utilizing domestic cloud partnerships and exploring international supply channels, companies are working to overcome restrictions on accessing cutting-edge hardware.

The controversy highlights the challenges Washington faces in enforcing its technology embargoes. According to Bloomberg, a person familiar with Moonshot's procurement confirmed the startup has a channel to access Blackwell processors via Southeast Asia, though the legality of the method remains unclear. As Moonshot reportedly seeks more Blackwell chips for its next-generation Kimi K4 model, its procurement strategies will likely face continued international scrutiny.