{"text":[[{"start":12.28,"text":"Chinese AI start-up Moonshot has revamped its corporate structure and brought in several prominent state-backed investors as it seeks to win Beijing’s approval for a Hong Kong listing."}],[{"start":22.12,"text":"The Beijing-based AI lab’s Kimi K3 model has narrowed the performance gap with Anthropic’s leading systems and gained popularity among software developers. It is targeting an initial public offering that would fund its next phase of model development and expansion."}],[{"start":39.04,"text":"Before it can list Moonshot may need to unwind its corporate structure, which includes an offshore entity to raise funds in US dollars from international investors."}],[{"start":49.2,"text":"The timing of Moonshot’s IPO remains unclear, but two people familiar with the matter said it was unlikely to take place until next year. Another person said it could be sooner if the regulatory issues were resolved."}],[{"start":62.52,"text":"Last week, Moonshot restructured its China-based entity from a limited liability company to a joint stock company, in its first visible step towards going public, according to corporate disclosures."}],[{"start":73.68,"text":"Joint stock companies have more formal corporate governance requirements and generally have a wider shareholder base where it is easier to transfer shares."}],[{"start":82.2,"text":"The Chinese securities regulator has barred certain technology companies based in China with overseas entities that control the core operating business through so-called “red-chip” structures from listing outside the mainland."}],[{"start":94,"text":"That move reflects concerns over strategically important technologies potentially falling under foreign ownership."}],[{"start":101.36,"text":"Earlier this year, regulators issued a notification that certain companies with overseas entities holding key intellectual property would not be eligible for offshore listings. The policy forced several high-profile AI companies, including Moonshot and StepFun, to suspend IPO preparations while they restructured their ownership."}],[{"start":121.52,"text":"Moonshot is co-ordinating with a team of bankers and lawyers to resolve the issue with its overseas investor base, according to multiple people familiar with the matter."}],[{"start":130.88,"text":"Concerns of tech leakage intensified following the sale of Manus AI — an AI agent start-up founded in China — to Meta. China ordered the deal to be unwound."}],[{"start":139.92,"text":"Earlier this week, Moonshot sent an update to its existing investor base explaining that it was still in the process of unwinding its overseas entity and that it still had not determined how it would transfer investors’ offshore stakes to an onshore entity, according to one investor. The notice came after media reports that Moonshot planned to hold an IPO within six months."}],[{"start":162.12,"text":"One proposal would require overseas investors to establish mainland investment vehicles through which they could hold shares directly — a lengthy process given China’s foreign investment approvals and potential tax implications."}],[{"start":174.84,"text":"Another would see investors sell back their offshore stakes before repurchasing equivalent holdings through newly established onshore entities — a process that would also require extensive negotiations and approvals."}],[{"start":186.98,"text":"Investors could also choose the conventional foreign direct investment route and would retain their rights and interests no matter which option they decided on."}],[{"start":195.32,"text":"One person close to the regulator said that it could still grant Moonshot an exemption from the red-chip restrictions if solid reasons could be provided to keep such a structure. An exemption would significantly accelerate any listing timetable."}],[{"start":208.72,"text":"No decision has been made and the company is proceeding with the restructuring in the meantime."}],[{"start":213.68,"text":"Moonshot does not have any immediate financial pressure to list after recently completing one of two consecutive financing rounds. The first valued the company at about $30bn and the second will give it a valuation of $50bn once completed."}],[{"start":228.92,"text":"Moonshot attracted several high-profile state-owned funds in the $30bn round, including the National Artificial Intelligence Industry Investment Fund."}],[{"start":237.56,"text":"Its shareholder registration, updated in July, also lists the National Social Security Fund, local government guidance funds from Shanghai and Guizhou, and state media flagship People’s Daily as investors. Moonshot has previously received investment from groups including Alibaba and Tencent."}],[{"start":255.68,"text":"The broad mix of state investors from different provinces mirrors a strategy adopted by rival Z.ai, formerly Zhipu, whose growing network of government shareholders has helped it expand into new regional markets and secure contracts with local enterprises."}],[{"start":269.92,"text":"The fundraising race has become increasingly important as China’s leading AI laboratories spend billions to train ever-larger cutting-edge models while keeping inference, or usage, costs low to boost adoption."}],[{"start":282.52,"text":"Robin Zhu, a technology analyst at Bernstein, wrote that the objective for leading Chinese AI groups such as Moonshot and Z.ai was to “serve intelligence cheaply” by providing low-cost access to models while “funding the next training run”."}],[{"start":296.12,"text":"Rather than maximising short-term profits, he said the priority was to build models that quickly attract users: “A poor model can quickly drive away users, impacting both revenue momentum and the cost of funding for the next step forward.”"}],[{"start":309.64,"text":"Moonshot declined to comment."}],[{"start":314.76,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1786279466_1677.mp3"}