Moonshot execs in talks to settle shareholder dispute ahead of IPO

The dispute, which is in arbitration in Hong Kong and has been ongoing since 2024, centers on allegations that Yang and Zhang set up Moonshot without authorization from the Recurrent board. A letter from Recurrent's lawyers to Moonshot's investors, seen by Reuters, also alleged that vital large-language-model data servers were transferred without authorization to a Moonshot subsidiary in April 2023, and that other key data was deleted in September 2024 at Zhang Yutao's instructions. Recurrent and its investors are also considering separate legal action in the Cayman Islands against Moonshot President Zhang Yutong, alleging she received a significant shareholding in Moonshot for personal benefit that was concealed from shareholders.

Yang and Zhang co-founded Recurrent.ai in 2016 before establishing Moonshot in 2023 and continue to be directors of Recurrent's holding company. Yang has previously denied the allegations, and David Morrison, a senior partner at MinterEllison representing Yang, Zhang, and Moonshot, stated in November 2024 that the case "lacked both legal and factual basis." Moonshot declined to comment, and Recurrent did not respond to requests for comment.

Moonshot, which is challenging the dominance of US AI companies like OpenAI and Anthropic with its Kimi AI models, confidentially filed for a Hong Kong IPO in September. While the dispute is not expected to jeopardize the IPO, an unresolved fight could raise governance, ownership, and disclosure issues for potential investors and complicate the listing process.