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Remember January 2025? DeepSeek dropped R1, matched o1 at a fraction of the cost, and wiped nearly $1 trillion off the Nasdaq in a single day. Well, a different Chinese AI lab just had the most consequential week of any non-US AI company since that DeepSeek shock. The company is Moonshot AI. Their model is Kimi.
Here's what happened in the span of one week:
**1\. Attention Residuals**
On March 16, the Kimi team dropped "Attention Residuals" on arXiv a paper that proposes replacing a foundational component of every modern LLM that has gone essentially unchanged since 2015. Standard residual connections treat every layer's output equally. Attention Residuals let each layer selectively look back at previous layers with learned, input-dependent weights. The result: performance equivalent to training with 1.25x more compute, at less than 2% inference overhead. Elon Musk reposted it. Andrej Karpathy jumped into the discussion and commented that maybe we haven't been taking the title "Attention is All You Need" literally enough. Jerry Tworek, the OpenAI research lead who ran the o1 training program, quote-tweeted it with: "Rethink everything. deep learning 2.0 is approaching." When the people who built the current frontier reasoning models are publicly saying a paper from a Chinese lab might be the start of a new paradigm, that's a strong signal.
**2\. Cursor got caught shipping Kimi K2.5 as their own model.**
Last week Cursor, valued at $29.3 billion, launched "Composer 2," marketed as their in-house frontier coding model. Within 24 hours, a developer intercepted the API traffic and found the model ID: kimi-k2p5-rl-0317-s515-fast. Cursor's VP then admitted: "Yep, Composer 2 started from an open-source base."
**3\. A competitor got caught copy-pasting Kimi's code.**
Meanwhile on the Chinese side, a GitHub analysis revealed that MiniMax, another major Chinese AI company, had shipped Kimi's entire office skills codebase in their own agent platform with find-and-replace level changes. 13 byte-identical files. Hardcoded 'kimi' usernames left in the source code. A compiled .NET binary with the build path literally reading kimiagent/.kimi/skills/.
**So what?**
Nothing is more persuasive than peer behavior. When Karpathy engages with your paper, Cursor builds on your model, and competitors copy your code, that's three independent signals pointing in the same direction, Kimi is underrated.
Moonshot AI is still private, backed by Alibaba (BABA) and HongShan (formerly Sequoia China), among others, so there's no direct play here yet. But if you're holding BABA or tracking Chinese AI exposure, this is worth watching.
Not financial advice. I just think most people here are sleeping on this because each headline got covered separately and nobody connected the dots.