ZAI, Minimax Shares Fall as Rival Moonshot AI Unveils Upgraded Model

Shares of Chinese artificial intelligence firms ZAI Co Ltd (HK:2513) and MiniMax Group Inc (HK:0100) fell on Monday after local rival Moonshot AI released a significant upgrade to its flagship model, intensifying competitive pressures within China's AI landscape.

Competitive Pressures Hit Stocks

MiniMax Group experienced the sharpest decline, with its shares sliding 9.4% to HK$170.0. The sell-off erased all gains made since the company's public debut earlier this year, pushing the stock below its IPO price. According to the source, Minimax's decline was also exacerbated by growing scrutiny over increased hallucination rates in one of its newly launched models.

ZAI Co Ltd shares also retreated, falling 1.7% to HK$490.40. While the drop trimmed the stock's substantial annual gains, it remains up approximately 300% so far in 2026.

Moonshot Unveils Kimi K3.1 Pro

The market reaction followed Moonshot's announcement on Friday of Kimi K3.1 Pro, the first major upgrade to the frontier model that became a breakout hit upon its release in July. Moonshot stated the new model is aimed at improving performance in specific professional domains.

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According to the company, the upgraded model features:

• Enhanced capabilities for financial research and coding.
• The ability to perform 3D modeling.
• Benchmark scores that are reportedly ahead of or in line with comparable models from OpenAI and Anthropic, but at a lower operational cost.

Broader Industry Headwinds

The development underscores the rapid pace of innovation and fierce competition among China's leading AI companies. The release has been compared to the market disruption caused by DeepSeek’s R1 model in early-2025, which also demonstrated the potential for powerful and efficient new models to emerge quickly.

These domestic rivalries compound existing pressures from U.S. competitors, which have recently implemented price cuts. Those reductions have narrowed the cost-advantage gap that had initially made some Chinese AI models appear more enticing to a global user base.