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While Wall Street was fast asleep, a Chinese-made large language model quietly leapfrogged 16 other models to become number one on the AI charts.
The model is called Kimi-K3, developed by Beijing-based firm Moonshot AI. On Thursday, the AI benchmark platform Arena.ai announced that Kimi had gone from number 17 in the “Frontend Code Arena” — a measure of an LLM’s ability to perform multi-step web development tasks — to number one, surpassing the buzzy Claude Fable 5 and GPT-5.6 Sol by a mile.
In the “Text Arena,” a measure of an LLM’s ability in text-to-text tasks like creative writing, Kimi-K3 earned the number nine spot, a significant improvement from Moonshot AI’s previous model, Kimi-K2.6, which held number 38.
The news comes as investors are facing a major reckoning, with US semiconductor stocks plummeting on Friday morning and the tech-heavy Nasdaq composite sliding by 1.4 percent. Those losses are extending a horrible week for tech stocks, which had been driven by concerns over an all-American AI bubble.
The moniker, “Moonshot,” might be an understatement. The major catch here is that not only did a Chinese AI model surpass every US-designed model in front-end coding in a benchmark, it did so using a dramatically different approach.
Just like DeepSeek, a similar Chinese AI model that rankled the US stock market last year, Kimi is an open-weight model, meaning its inner workings are viewable to the public. Compared to proprietary models like GPT-5.6 that are kept under lock and key, open models cost users on average six times less, though their performance has historically been ever-so-slightly worse than their closed counterparts.
Responding to the news, Xiaoyin Qu, former Meta senior product manager turned AI entrepreneur, posed an important question: “When the best open weight model exceeds the best closed-source model, how does [Anthropic] justify its Fable pricing? Why would anyone pay for that?”
Even before Kimi-K3 dropped, the proposition of paying up to six times more for the slight performance boost offered by closed models was already pushing US companies toward Chinese AI. Now that the performance gap is closing fast, there’s even less reason for companies or individuals to pay exorbitant prices associated with Silicon Valley’s frontier models.
That simple math is bad news for the US tech industry, which has spent years insisting that it will take trillions of dollars to make AI work.
As Qu observed, “Kimi’s most recent funding round values the company at $20 Billion as of two months ago. Anthropic is worth almost 1 trillion, 50x. Why?”
The psychology of solitude, perversion, and AI companionship
Psychologist Paul Bloom examines why loneliness feels like starvation, why people are drawn to behaving poorly, and why revenge feels righteous until it destroys everything.
Psychologist Paul Bloom has spent his career studying the parts of human nature we often feel uncomfortable examining: why loneliness feels like starvation, why people are drawn to behaving poorly, why revenge feels righteous until it destroys everything.
Bloom argues that the US doesn’t actually have a loneliness epidemic, it has a solitude epidemic, one being accelerated by AI companionship.
About the speaker: Paul Bloom is the Brooks and Suzanne Ragen Professor of Psychology at Yale University. An internationally recognized expert on the psychology of child development, social reasoning, and morality, he has won numerous awards for his research, writing, and teaching. Bloom’s previous books include Just Babies: The Origins of Good and Evil and How Pleasure Works: The New Science of Why We Like What We Like, and he has written for Science, Nature, The New York Times, and The New Yorker.
Timestamps
00:00:24 Chapter 1: The promise and peril of AI companions
00:05:10 Two concerns: addiction & yes-men
00:18:51 The case for AI companions
00:23:48 Chapter 2: Why are we compelled to behave badly?
Below is a transcript of the first five minutes of this video interview. This is a true verbatim transcript that captures the conversation exactly as it happened. If you’d like to read the full transcript while following along with the video, click here.
I’m Paul Bloom. I’m a professor of psychology at University of Toronto and an emeritus professor at Yale University, and I study human nature. I study children, I study development, I’m really interested in morality and the social emotions, in how we understand ourselves and how we relate to other people.
Chapter One: The Promise and Peril of AI Companions
When people talk about loneliness — when we think about loneliness — we think about being alone, about solitude, and that can definitely be a source of loneliness. But a lot of us are comfortable being alone. And you could be alone for a long period of time but not feel lonely if you know there’s people who love you and understand you and appreciate you, kind of waiting in the wings for when you come back. What loneliness is at its root is a lack of human connectedness — the feeling that you aren’t loved, you aren’t needed, you aren’t respected.
This could mean you have nobody in your life, but it could also mean that you’re surrounded by people and you’re not connecting to them. Hannah Arendt pointed out that the most painful form of loneliness is when you are surrounded by people and you feel utterly isolated. And I’m interested in loneliness in part because it’s an exquisitely painful experience — it’s one of the worst states a human could be in, to feel alone, to feel disconnected.
People talk about a loneliness epidemic. There’s a wonderful discussion by Derek Thompson — he argues there is no loneliness epidemic, and in fact, if you look at the data, people were much lonelier a few years ago during COVID than they are now, and there’s not much evidence people are more lonely now than they were 20, 30, 40, 50 years ago. What we see instead is actually a solitude epidemic — so people are spending much more time alone than they ever have been. And it makes sense if you think about the way technology — our houses, are much better, our TVs are much better. Used to be your average person went to the movies multiple times a month; now we don’t go to the movies as much, we watch movies at home on our big screen TVs and abundance of streaming channels. We used to go out to eat a lot; now, you know, a lot of our dining is along and we order from Uber Eats. So as our interior life, the possibility for rich life indoors, inside, by ourselves, has gotten better, we have become more alone. And you could talk about whether solitude in itself is a problem. What I will say about loneliness is, regardless of whether or not it’s an epidemic, regardless of how bad it is relative to the past, it’s a terrible thing, and many people suffer from it. Estimates of how many people suffer — it’s hard to get a good estimate because it depends how you ask the question — but a reasonable estimate is one in five. One in five people are awfully lonely. Loneliness is most severe in adolescence, and it’s most severe in the very old, and these people really suffer.
We now live in a world with LLMs, large language models, generative AI, machines that seem to many of us to be intelligent — some say super intelligent — and more than that, seem compassionate, seem empathic. Last year, there was — I was part of a team of researchers that was led by my colleague Mickey Inzlicht. We wrote a paper called “In Praise of Empathic AI,” and in it we summarized a lot of the data suggesting that when you compare people interacting with people and interacting with AIs, at least for short-term interactions, the AIs win. So the typical experiment is: you’d have one person, one group of people would interact with other people, maybe over text or talking; another group would interact with ChatGPT, text or talking; and then later on they rate their experiences. And the main finding is that if you don’t know who’s a person, who’s AI — you’re not biased in any way — the people who interact with ChatGPT say they felt more listened to, they felt they were talking to somebody who was more empathic, more compassionate, to get more out of it.
So we published this, and we said, look, here’s a case for empathic AI, and man, people hated this article. I’ve written a few things people disliked, but boy, they — we got slammed. And I have some sympathy for the objections. We made the positive case for AI, but there’s a negative case too, and I think a proper understanding, a proper answer to the question, what role should these things play in our lives, should look at both sides of the issue. And I think, deal with some very, very difficult questions.
When I think of people interacting with AI companions, I worry. I’m very sensitive to negatives, and I’m most sensitive to negatives when I think about young people, about adolescents, maybe people in their 20s, and I see two problems, and they’re both deeply serious.
People visit the Moonshot AI stand, featuring Kimi K3, during the World Artificial Intelligence Conference (WAIC) in Shanghai on July 17, 2026.CN-STR—AFP via Getty Images
On Thursday, Moonshot AI, a Beijing-based AI startup, unveiled the latest version of its Kimi large language model, which promises performance close to Anthropic’s Fable 5—perhaps the most powerful publicly available model today—at a fraction of the cost.
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Kimi K3, the largest open-weight model ever released, performed “competitively” with Fable 5, and “substantially outperformed” Anthropic’s Opus 4.8, and OpenAI’s GPT 5.6 Sol, according to Moonshot. The company’s officially-released benchmarks consistently rank K3 among the top three AI models; one independent benchmark from Arena.AI even put K3 as the best model currently available, ahead of Anthropic.
Many observers, including Anthropic CEO Dario Amodei, didn’t expect a Chinese AI lab to release a model that could approach the U.S.’s best offerings for another six months.Tesla CEO Elon Musk, for example, suggested it might happen by the first quarter of next year. K3’s launch rapidly shrank that timeline and underscores just how quickly Chinese AI developers are closing the performance gap with their U.S. rivals.
“The AI ecosystem in China is probably much better than people thought,” says Paul Triolo, a partner at DGA-Albright Stonebridge Group.
Moonshot AI has priced K3 at $15 per million output tokens, the bits of information processed and generated by a large language model. That’s cheaper than Fable 5, which costs $50 for the same level of output.
Moonshot’s launch seemed to rattle investors who interpret the new model as undermining the conventional wisdom that U.S. firms can maintain their extended lead by simply outspending Chinese competitors on computing power.
A semiconductor selloff was already underway, but the K3 debut seemed to make things worse. Leading chipmaker Taiwan Semiconductor Manufacturing Company fell by 7% on Friday, despite reporting a 77% jump in quarterly operating profit. SoftBank—often seen as a proxy for OpenAI—fell by 9.0%. Z.ai, a Chinese AI startup that has released a competing model to Moonshot’s Kimi, plunged by almost 30% in Hong Kong trading.
Fear has spread into U.S. markets, with the Nasdaq 100 down by 1.0% as of 2:00pm Eastern time. Nvidia shares fell by 1.2%, briefly forfeiting the chipmaker’s lead as the world’s most valuable company to Apple. Meta shares plunged by over 2.4%.
Who’s who in China’s AI sector
China’s AI sector includes both established tech companies, like Alibaba and ByteDance; smaller startups like DeepSeek, MiniMax, and z.ai; and even dark horse entrants like phonemaker Xiaomi and food delivery platform Meituan.
Moonshot AI is one of the upstarts. Founded in 2023, its Chinese name comes from Pink Floyd’s album The Dark Side of the Moon, which is founder Yang Zhilin’s favorite album. The company is backed by Alibaba, Tencent, and Meituan, as well as HSG (formerly Sequoia China); it’s reportedly considering an IPO in Hong Kong.
This is Moonshot’s second time in the spotlight this year. Earlier Kimi models, notably K2.5 and K2.6, gained traction among Silicon Valley developers by offering strong coding performance at meaningfully lower cost than Anthropic’s Claude. In March, U.S. coding assistant maker Cursor acknowledged that its Composer 2 agent ran on top of Kimi 2.5.
It’s now taking its turn as China’s AI leader, a position that’s changed hands repeatedly this year.
In April, DeepSeek unveiled V4, its long-awaited update to last year’s V3 model. While V4 didn’t shock markets quite as much as its predecessor, it still offered frontier-level performance at rock-bottom prices—currently $0.87 for a million tokens of output—and its ability to be run on Huawei-made processors.
Fellow AI startup z.AI followed up in mid-June, with the release of its GLM-5.2 model. The Beijing-based startup announced the model just days after U.S. officials briefly disrupted access to Anthropic’s Fable and Mythos models for some users outside the United States and for foreign nationals. “Frontier intelligence should not belong to only a few people, nor be subject to withdrawal by a handful of rules at any moment,” the company wrote in a social media post announcing GLM‑5.2.
Even China’s consumer‑internet giants are getting into the frontier race. Meituan launched its own LongCat 2.0 model last month and revealed that it trained the system entirely on Chinese‑made semiconductors rather than U.S. chips.
“The idea that Meituan could train a 1.6 trillion-parameter model on domestic hardware would have been inconceivable in October 2022,” Triolo says, referring to the month when the U.S. launched sweeping export controls designed to slow China’s access to advanced AI chips.
Why are Chinese models cheaper?
Chinese AI has earned a global following by being systematically cheaper than the U.S. competition. DoorDash, for example, is pushing “lower-level work” to Moonshot’s Kimi model, leading to “better quality, cheaper cost,” according to chief technology officer Andy Fang.
Chinese systems routinely dominate the weekly leaderboards on OpenRouter, a popular marketplace that lets developers mix and match models from different providers. As of this week, all of the top five most-used models are from Chinese companies: Tencent, Xiaomi, DeepSeek, MiniMax, and z.ai.
Power costs in China are lower than in many parts of the U.S., in part because the country has made massive investments into power generation and transmission, making it easier to add data‑center capacity. New data centers in the U.S., however, often face political resistance due to perceived strain on grids and water use.
Chinese AI companies are also willing to sacrifice profit margins in a bid to capture market share and establish their models as a de facto standard.
Ironically, U.S. export controls—designed to hold China’s AI sector back—may also be a factor behind the low price of Chinese AI models. Without access to the most powerful AI processors, domestic labs were forced to squeeze more performance out of less capable hardware.
“Labs are so compute-constrained, capital-constrained, and talent-constrained that a lot of them are being cautious in how they use their resources,” says Grace Shao, an AI analyst and author of the AI Proem newsletter.
Most recent Chinese AI models are also now compatible with cheaper, locally-made processors. “For the money [a Chinese AI company would] spend on an Nvidia chip, they can buy ten local chips from Huawei or other local chipmakers,” says George Chen, a partner at the Asia Group.
Perhaps most importantly, Chinese companies have embraced the open-source movement, releasing their models for free. Almost all Chinese companies release their work under licenses that allow users to download models for free, run them on local hardware, and fine-tune them.
This allows third-party providers, including those in the U.S., to host Chinese models for free. The only costs that matter, in that case, are “GPUs and energy,” says Ameya Karnitkar, co-founder of Larridin, an AI measurement platform. “Anthropic adds the additional costs of their R&D, and their own inference costs.”
On July 17, at the World Artificial Intelligence Conference in Shanghai, China President Xi Jinping affirmed that the country will remain committed to releasing models on an open-source basis.
“We must seize this rare historic opportunity, encourage open source, openness, cooperation, and sharing, and comprehensively promote AI technological innovation, industrial development, and scenario-based applications,” Xi told conference attendees.
He also added a dig against Washington’s attempt to slap controls on the release of frontier models.
“We should jointly oppose the practice of overstretching the concept of national security in the field of AI or placing one country’s own security above the security of others.”
The Fortune Leaders Forum will convene Fortune 500 executives and founders of leading Asian companies to help define the future of leadership in an age of convergence and complexity. September 8 in Macau. Apply here.
Surrogacy is not permitted in Germany and the conservative Christian Democratic Union (CDU) opposes its legalization. Spahn and his husband had their child through a surrogate mother in the US.
Spahn led the conservative Christian Democratic Union (CDU) in the German parliamentImage: Mike Schmidt/IMAGO
The resignation was requested by Chancellor Friedrich Merz of the conservative Christian Democrats (CDU).
Spahn did not say he was standing down as a member of the Bundestag.
Surrogacy is not permitted in Germany and the CDU opposes its legalization. Spahn and his husband had their child through a surrogate mother in the United States.
What has Spahn said?
“In recent days, I have come to realize that my personal happiness in starting a family with my husband and becoming a father is incompatible with my political office,” Spahn said in a statement seen by news agencies.
After the announcement, Chancellor Merz said it was the called the decision both “correct” and “unavoidable,” saying that “credibility is the most valuable asset in politics.”
Merz went on to explain that he would now work with Markus Söder, the leader of the CDU’s Bavarian sister party the Christian Social Union (CSU) to put forward a proposal for a new parliamentary group chair.
“The procedure and timeline will now be coordinated with the party and parliamentary group committees,” he said.
Spahn and husband Daniel Funke [FILE: June 2025]Image: Annette Riedl/dpa/picture alliance
Surrogacy controversy
Earlier this week, Spahn, 45, and his husband, Daniel Funke, announced that they had become parents and posted a photo on social media pushing a stroller.
The announcement attracted immediate criticism from all sides of Germany’s political spectrum, accusing Spahn of double standards given his senior position in a party that supports upholding the legal ban on using surrogate mothers inside Germany.
Spahn had in the past said he found the idea of “rented wombs” very difficult to come to terms with as a Christian and a gay man, and he had voted on party lines in favor of the ban on using surrogates in Germany.
In a podcast interview with Germany’s Bild newspaper on Friday, Spahn had tried to defend his decision, saying he had “wrestled with myself for a long time, including on the issue of surrogacy.”
Spahn will not face legal consequences in Germany for having a baby via surrogacy, as it is not illegal in Germany to raise a child born abroad to a surrogate mother.
This is not the first time Spahn has faced controversy. As Germany’s COVID-era health minister, Spahn was investigated for alleged misuse of public money.
Spahn was seen as a rising star in the conservative bloc, having been re-elected leader of the parliamentary group with 85% of the vote in May.
How did other parties react?
Political responses to the news of Spahn’s resignation varied in tone.
Spahn’s opposition number in the center-left Social Democrats (SPD), Mattias Miersch, opted to focus on personal empathy. The SPD are in coalition with their historical rivals the CDU/CSU.
“As a person I can imagine how the last few hours must have been for Jens Spahn and his family,” Miersch said. “I wish Jens Spahn and his family all the best and much strength for the time after office.”
Opposition politicians were more eager to twist the knife.
Far-right AfD co-leader Alice Weidel described Spahn’s resignation as “overdue,” saying his COVID-era misadventures alone made him “untenable.”
“That he has now undermined a law that he himself voted for has definitively destroyed his credibility,” Weidel said.
The Greens‘ co-chairs Britta Hasselmann and Katharina Dröge issued a joint statement saying the resignation was not “only about a personal decisions that stood in defiance of a party position.” They said Spahn’s “scandals, mistakes and leadership weaknesses ultimately led to this point.”
The socialist Left Party‘s Sören Pellmann said that anyone “who bears political responsibility must be measured by the yardsticks that they set for other people.”
And the Free Democrats‘ leader Wolfgang Kubicki, a successor to the first senior openly gay party leader in Germany, said it was a “pity” that Spahn had not made it clear sooner “that he had changed his opinion on surrogate mothers on the basis of his own personal experiences.”
Jens Spahn: US decisive actor in international conflicts
Edited by: Wesley Dockery
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Had the honour of speaking at the People’s Forum on Peace and Neutrality last month! Well recommended to follow and watch the many strong and informative presentations from advocates and specialists on peace and international law, on the dangers of the arms trade, and on the resilience of public commitment to neutrality in Ireland and why it’s so important to hold on to and strengthen it.
Published: November 24, 2009Last Updated: May 28, 2025
On July 18, 1940, Franklin Delano Roosevelt, who first took office in 1933 as America’s 32nd president, is nominated for an unprecedented third term. Roosevelt, a Democrat, would eventually be elected to a record four terms in office, the only U.S. president to serve more than two terms.
Roosevelt was born January 30, 1882, in Hyde Park, New York, and went on to serve as a New York state senator from 1911 to 1913, assistant secretary of the Navy from 1913 to 1920 and governor of New York from 1929 to 1932. In 1932, he defeated incumbent Herbert Hoover to be elected president for the first time. During his first term, Roosevelt enacted his New Deal social programs, which were aimed at lifting America out of the Great Depression. In 1936, he won his second term in office by defeating Kansas governor Alf Landon in a landslide.
Franklin D. Roosevelt Creates Social Security
Franklin D. Roosevelt signed the Social Security Act as part of his New Deal efforts.
On July 18, 1940, Roosevelt was nominated for a third presidential term at the Democratic Party convention in Chicago. The president received some criticism for running again because there was an unwritten rule in American politics that no U.S. president should serve more than two terms. The custom dated back to the country’s first president, George Washington, who in 1796 declined to run for a third term in office. Nevertheless, Roosevelt believed it was his duty to continue serving and lead his country through the mounting crisis in Europe, where Hitler’s Nazi Germany was on the rise. The president went on to defeat Republican Wendell Wilkie in the general election, and his third term in office was dominated by America’s involvement in World War II.
In 1944, with the war still in progress, Roosevelt defeated New York governor Thomas Dewey for a fourth term in office.However, the president was unable to complete the full term. On April 12, 1945, Roosevelt, who had suffered from various health problems for years, died at age 63 in Warm Springs, Georgia. He was succeeded by Vice President Harry S. Truman.
On March 21, 1947, Congress passed the 22nd Amendment to the U.S. Constitution, which stated that no person could be elected to the office of president more than twice. The amendment was ratified by the required number of states in 1951.
Israel clears path for Ben-Gvir plan to ring Palestinian prison with crocodiles —— The Israeli government has removed legal protections from Nile crocodiles to advance National Security Minister Itamar Ben-Gvir’s plan to imprison Palestinians inside a compound encircled by the predatory reptiles, Israeli media reported on 17 July.
Environment Minister Idit Silman signed a decree on 16 July reclassifying the crocodiles as a “specially managed wild animal,” a category permitting Israeli security forces to keep them, according to Ynet, overriding the Environment Ministry’s own legal adviser, who concluded the scheme had no sufficient legal or professional basis.
Ben-Gvir, who oversees the Israel Prison Service, first proposed imprisoning Palestinians behind a ring of crocodiles in December, citing as his inspiration the notorious Florida immigration detention center dubbed “Alligator Alcatraz.”
The minister celebrated the decree on social media by posting an AI-generated image of himself holding a crocodile on a lead, writing “Damn terrorist, thinking of trying to escape? Think again.” The plan to deploy wild predators against Palestinian detainees advances under a minister who has presided over the systematic torture, starvation, and degradation of Palestinian prisoners since the start of Israel’s genocide in Gaza in October 2023, with human rights organizations repeatedly denouncing Israeli prisons as “torture camps.”
