Over 200 startups, including members of the Y Combinator network, have signed a letter opposing an outright ban on Chinese AI models, which they consider essential to their operations due to their significantly lower costs. Moonshot AI’s Kimi K3 model, released on July 16 with 2.8 trillion parameters, reportedly matched or exceeded the performance of Anthropic and OpenAI on certain reasoning and coding tasks. US authorities, including the White House, have accused the Chinese startup of illegally distilling models from American companies and accessing restricted Nvidia chips. Coinbase announced cutting its AI spending by approximately 50% after transitioning to more cost-effective Chinese models like GLM and Kimi, whose usage now accounts for over 30% of US developer tokens since February 2026.
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