Moon of the Dark Side (Kimi) enters settlement talks ahead of IPO, claims in the old case could exceed $700 million

Beating AI News Flash: Reuters exclusively reports that executives of Moonshot AI are negotiating a settlement with their former company Recurrent AI and its investors, aiming to resolve a nearly two-year arbitration dispute ahead of its Hong Kong IPO. It remains unclear whether the two sides can reach an agreement. The dispute involves Moonshot AI founder Yang Zhilin and CTO Zhang Yutao, who co-founded Recurrent AI in 2016. According to a letter seen by Reuters, Recurrent AI and some of its investors accuse the pair of establishing Moonshot AI without board authorization and providing false information to Recurrent AI’s investors. The letter also alleges that servers holding key large language model data were improperly transferred, with some data deleted. The shareholding arrangement of Moonshot AI President Zhang Yutong has also been called into question. Reuters has not independently verified these allegations. Yang Zhilin has previously stated the startup obtained all necessary approvals, while his legal representative noted the case lacks factual and legal basis. At Moonshot AI’s founding, Recurrent AI was allocated a 9.5% initial stake. Now, Recurrent AI and some of its investors are seeking compensation equivalent to 10.5% of Moonshot AI’s initial share capital. Based on Moonshot AI’s $30 billion valuation from its June funding round, the potential compensation could exceed $700 million, according to people familiar with the matter. Moonshot AI has secretly submitted its Hong Kong IPO application. Sources close to the matter believe the dispute will not directly block the listing for now, but if left unresolved, issues related to equity ownership and disclosure could still act as obstacles.