Alphabet Inc Class CGoogle's Gemini 3.5 is delayed, and Chinese startup Moonshot releases a competitive free model, eroding US AI lead.

China is eroding the United States' lead in artificial intelligence as Google struggles with delays to its next Gemini model and Chinese startup Moonshot releases a surprisingly capable, free, open-weight model called Kimi K3. Google is months behind schedule on Gemini 3.5, partly due to efforts to improve coding abilities to match Anthropic's Claude, and the delay sent its shares sliding. Moonshot's Kimi K3 features strong front-end coding and is free to use and open-weight, allowing anyone to download and run it locally, but demand quickly overwhelmed the company's GPU capacity. The release is part of a broader Chinese strategy of open-sourcing models and undercutting US rivals on price, supported by Beijing's subsidies for computing resources and power. The development has rattled Silicon Valley and Washington, with Trump administration officials reportedly considering new restrictions on Chinese AI models, while some investors argue the competition is simply what global rivalry looks like.
Alphabet Inc Class CGoogle's Gemini 3.5 is delayed, and Chinese startup Moonshot releases a competitive free model, eroding US AI lead.
International Business MachinesAnthropic's Claude is mentioned as a benchmark for coding ability, but no direct impact on Anthropic is stated.