Moonshot AI, an artificial intelligence startup founded in China a year ago, has quickly narrowed the gap with rival Baidu’s ERNIE Bot in terms of users after upgrading its large language model Kimi to be able to handle text inputs of up to two million Chinese words in March.

According to a survey conducted by data website AIcpb, Kimi saw its combined website and app traffic top 12.6 million views last month, bringing its ranking up to second place behind Baidu’s chatbot, which received 2.29 million more views. 

Why it matters: The quadrupling of Kimi’s visit count in March meant the ChatGPT-like tool surpassed Alibaba’s competitor Tongyi Qianwen. Its ability to handle long texts is fueling Kimi’s popularity among users, raising hopes among its backers that it will soon break Baidu’s months-long hold on the top position in China’s AI sector.

Details: Moonshot focuses on longer textual inputs and outputs, a new battlefield for Chinese LLM companies. Alibaba opened up a free long-document processing feature that can handle 10 million characters following Kimi’s upgrade, while Baidu plans to support longer text conversations later this month.

• Less than 72 hours after Kimi claimed a technological breakthrough in handling 2 million Chinese characters, the chatbot experienced a service outage. The crash, which lasted at least two days, was blamed on “an abnormal increase in system traffic far exceeding the system’s capacity,” by the company, as users rushed to try out the new feature.
• In a recent interview with Tencent Technology, Moonshot founder Yang Zhilin noted that a focus on long texts was decided upon at the company’s inception. “It’s fundamental,” Yang said, noting that the core value of AI lies in personalized interaction, best achieved, he believes, not through fine-tuning but by supporting broader contexts.
• He also said that while there is “significant room” for expanding text length, focusing on the numbers alone is “meaningless.” Instead, reasoning, faithfulness, and clear instruction-following are what matters.

Context: Moonshot AI reportedly raised over $1 billion in funding earlier this year from existing shareholders such as Alibaba, Sequoia China, and Xiaohongshu, marking the largest single-round financing for a Chinese AI big model company to date. The company raised nearly RMB 2 billion ($277 million) last year.