Key facts
- Moonshot executives are in talks to settle a legal dispute with shareholder Recurrent.ai.
- Recurrent alleges Moonshot CEO Yang Zhilin and CTO Zhang Yutao made false representations and enriched themselves.
- Recurrent and its investors seek compensation equal to 10.5% of Moonshot's original shares.
- Moonshot's valuation was $30 billion in a June fundraising round.
- Moonshot is planning a Hong Kong IPO.
- Recurrent is also considering legal action against Moonshot President Zhang Yutong.
Top executives of Chinese AI startup Moonshot are in talks to settle a legal dispute with shareholder Recurrent.ai ahead of its planned Hong Kong listing, people familiar with the matter said.
Recurrent.ai and some of its investors have accused Moonshot CEO Yang Zhilin and Chief Technology Officer Zhang Yutao of making false representations to Recurrent investors and enriching themselves at Recurrent's expense, according to a March 11 letter from Recurrent's lawyers seen by Reuters.
Yang and Zhang Yutao co-founded Recurrent.ai in 2016 before establishing Moonshot in 2023 and remain directors of Recurrent's holding company. The settlement talks have not been previously reported.
Reuters could not independently verify the accuracy of the letter's claims. Yang has previously denied the allegations, and Moonshot declined to comment. David Morrison, a senior partner at MinterEllison representing Yang, Zhang Yutao, and Moonshot, told Chinese media in November 2024 that the case "lacked both legal and factual basis" and that the law firm would mount a defense.
Recurrent is seeking compensation equal to 10.5% of Moonshot's original shares, which could be worth over $700 million based on Moonshot's $30 billion valuation in a June fundraising. Recurrent initially received 9.5% of Moonshot's original shares when the startup was established.
Recurrent is also considering separate legal action in the Cayman Islands against Moonshot President Zhang Yutong, who allegedly received a significant shareholding in Moonshot for personal benefit that was concealed from Recurrent's shareholders. Zhang Yutong did not respond to requests for comment.
Moonshot, based in Beijing, is known for its Kimi AI models and is seeking to challenge dominance by US AI companies. The company confidentially filed for a Hong Kong IPO in September. In July, Moonshot unveiled Kimi K3, a 2.8 trillion-parameter model.