On January 20, 2026, Beijing time, the new round of financing for the large model product Kimi under the Dark Side of the Moon has been finalized, with the pre-investment valuation raised from $4.3 billion a few weeks ago to $4.8 billion. In a short period, its market value has surged again, quickly becoming the focus of China's large model sector. This company, which holds over 10 billion RMB in cash reserves, has chosen to continue large-scale financing despite seemingly abundant funds, bringing the superficial contradiction of "plenty of money, still desperately raising funds" to the forefront. As the valuation continues to rise, the controversies surrounding Kimi have also come to light: is the current price based on real market demand and a clear business path, or is it more a collective bet on the future potential of the "second tier" of domestic large models? Whether the high valuation truly matches its position in the sector has become the key suspense of this transaction.
The Driving Force Behind the $500 Million Surge in Valuation
Before the latest round of financing was finalized, the market had given Kimi a pre-investment valuation still hovering around $4.3 billion, but within just a few weeks, this figure was re-evaluated to $4.8 billion, nominally raising it by $500 million, which corresponds to a significant increase. The force driving this valuation jump does not solely come from changes within the company but is superimposed on an overall rapidly appreciating industry environment. In 2025, the total financing in China's AI large model sector was reported to have increased by 240% year-on-year, which means that the valuation anchor points for leading and "quasi-leading" projects have been collectively raised within a year. The urgency for funds to seek targets within the sector has sharply increased, and any project that can articulate a clear technical story and possesses certain product momentum will naturally command higher pricing at the negotiation table.
In this liquidity-rich environment, Kimi is increasingly included by more institutions as a representative sample of the "second tier" of domestic large models, maintaining a distance from several players widely regarded as first-tier, yet clearly ahead of many small and medium teams. A representative comment from an industry analyst states, "This round of financing reflects the market's revaluation of the second tier of domestic large models," which reflects a capital consensus: the prices of the first tier have almost been locked in, while the second tier, as model capabilities and team configurations gradually mature, is seeing its potential space being collectively adjusted upward. For Kimi, the leap from $4.3 billion to $4.8 billion in this round is more like a specific manifestation of this "revaluation" wave; it is both a phased affirmation of the technological routes and product attempts over the past year or two and a prepayment for growth potential in the coming years.
The Hidden Calculation Behind Financing Despite Billions in Cash
Another point of controversy surrounding Kimi is that, despite having cash reserves exceeding 10 billion RMB, the company still chooses to initiate a new round of financing, which contradicts the traditional intuition that "financing is needed only when funds are tight." On the surface, a company with abundant funds continuously raising prices for financing can easily be interpreted as excessively pursuing valuation games or questioned for not providing sufficient answers regarding cash efficiency and business closure. However, within the cost structure and competitive rhythm of the large model industry, the logic of continuous financing does not seem entirely out of place.
Training and iterating large-scale models inherently means ongoing capital consumption, from the procurement of underlying computing power and self-built or long-term leased infrastructure to long-term investments in high-end algorithms and system engineering talent, and to promotional budgets surrounding productization, ecosystem building, and overseas expansion. Each link may represent a cash-burning cycle measured in "years." While specific funding uses cannot be disclosed, it is certain that large model companies need to maintain technological leadership and product iteration, which requires proactive capital reserves for the coming years, rather than waiting until cash runs tight to finance passively. A key point is that the market has heard voices this round indicating "existing shareholders' oversubscription," which can be understood as existing investors defensively consolidating their shareholding ratios to prevent excessive dilution from new funds, or as an aggressive move—betting on Kimi's position in the next round of industry reshuffling by adding chips in a rapidly rising valuation environment. For Kimi, choosing to lock in more "patient capital" while cash is still abundant essentially sets up a financial defense line for high-intensity investments in the coming years, while also consolidating its capital structure by taking advantage of the valuation rise window.
The Accelerated Path from Tsinghua Laboratory to Capital Darling
If we trace back Kimi's current capital heat a few years, its storyline quickly returns to a typical Chinese AI startup model— a technology startup team emerging from a top university laboratory. Founder Yang Zhilin hails from Tsinghua's NLP laboratory, which itself signifies solid academic accumulation in natural language processing, while the inclusion of several former Google Brain members further adds an international tech halo to the project. For risk capital that prefers "people and stories," such a resume combination significantly reduces their uncertainty when early assessing the project's technical ceiling and provides a narrative foundation for subsequent rounds of financing.
Looking forward along the timeline, Kimi has already completed a $500 million C round financing, with IDG leading with $150 million, a detail widely cited in the industry, marking an important milestone in its entry into mainstream capital visibility. From the early technical team to the large financing in the C round, and now to the new round of transactions with a valuation raised to $4.8 billion, Kimi's financing trajectory can be seen as a typical example of "technical narrative amplifying commercial imagination": a strong technical background wins the project a high starting valuation anchor, and the continuous influx of funds supports larger-scale model training and product experimentation, forming a self-reinforcing cycle between the two. In the absence of fully disclosed specific business data, the market's judgment on Kimi largely relies on trust in its technical team's execution and route choices, and this trust, based on resumes and technical discourse power, ultimately translates into a series of valuation increases.
Divergence of Tracks Between Zhipu and MiniMax
In the capital map of domestic large models, Kimi is not an isolated case. Almost simultaneously, another player regarded as a representative of the "second tier," Zhipu AI, has been reported to have initiated Pre-IPO round financing, clearly distinguishing its capital path from Kimi's current private financing round. Zhipu is taking a step forward, preparing for entry into the public capital market; Kimi, on the other hand, continues to thicken its ammunition in the new round of private valuation increase. The differences in rhythm and path between the two showcase different choices made by companies within the same sector regarding the capital market window.
If we broaden our perspective to include players like MiniMax, also categorized as part of the "second tier" of domestic large models, a more complete relative positioning picture emerges: Zhipu strengthens its image of moving toward the public market through the Pre-IPO round news, while Kimi solidifies its pricing center in the private market through the new round of financing with a pre-investment valuation of $4.8 billion. Projects like MiniMax seek capital support that matches their technological progress and product layout at their respective stages. The industry discussion about "who will first complete price discovery in the capital market" is becoming an important variable affecting the subsequent financing rhythm and valuation ceiling of these companies. Once a player achieves high pricing in the primary or secondary market, its valuation will, in turn, become a reference for other second-tier companies, potentially raising the negotiation starting point for subsequent financing or, when market sentiment changes, becoming an invisible ceiling that suppresses the valuations of other projects. For Kimi, how to maintain its valuation premium within the "second tier" against the backdrop of Zhipu accelerating toward the public market and similar projects like MiniMax gaining exposure will directly determine its financing space and rhythm in the coming rounds.
Intertwining Demand and Bubble: What Capital is Betting On
The revaluation of valuations cannot be divorced from discussions of real demand and commercial landing. From the current progress of large model applications in China and globally, the heat on both the ToB and ToC ends is simultaneously fermenting. Enterprise customers are gradually increasing their willingness to trial and pay for scenarios such as intelligent customer service, text generation, code assistance, and knowledge management, while consumer users are showing strong interest in large model tools for content creation, information retrieval, and entertainment companionship. Kimi represents a typical case in this round of "general large models + multi-scenario landing" narrative: technically benchmarking against international leading products, seeking various combinations of business models under domestic policies and ecological environments, aiming to seize mindshare and traffic while demand is still taking shape and payment habits are still being cultivated.
Surrounding this round of valuation increase, two typical interpretations have emerged within the capital. One view holds that this is a collective "revaluation of the second tier of domestic large models," focusing on acknowledging that these projects have undergone qualitative changes in technical capabilities and product maturity compared to one or two years ago, thus requiring a higher potential space; another voice emphasizes the "recognition" of Kimi and similar companies' commercialization progress, arguing that existing shareholders' oversubscription itself is an indirect vote on their current revenue and customer expansion situation. There is a subtle tension between these two interpretations: the former is more macro, focusing on the overall revaluation of the sector; the latter is more micro, attempting to directly correlate the valuation increase to the operational performance of a single company. Regardless of which explanation prevails, one unavoidable issue is that at this stage, the structure of significantly advanced valuations and relatively lagging revenue realization is almost a collective characteristic of large model startups. This misalignment can be easily digested in a liquidity-rich environment with high market expectations for AI, but once the macro funding environment tightens and capital's tolerance for return cycles decreases, existing valuation levels may face systemic downward pressure. For second-tier representatives like Kimi, the current $4.8 billion valuation is both a reward for the present and a harsh countdown for future delivery capabilities.
After the Valuation Peak: Kimi's True Test
In summary, Kimi's ability to rapidly push its pre-investment valuation to $4.8 billion is the result of multiple overlapping factors: on one hand, the founding team from Tsinghua's NLP laboratory and the aggregation of several former Google Brain members provide a solid trust foundation for the project; on the other hand, a series of capital events starting from the $500 million C round financing, with IDG leading with $150 million, has continuously reinforced its benchmark image within the "second tier of domestic large models." Coupled with the background of 240% year-on-year increase in large model financing in China in 2025 and the willingness of existing shareholders to oversubscribe in this round, valuation, funds, and technical narrative form a mutually supportive closed loop. For capital, betting on projects like Kimi that have preliminarily completed technical and team validation during a window period of overall sector price increases and incomplete head patterns is a configuration that combines both offensive and hedging attributes.
The truly difficult part will fall within the time frame of the next one to two years. With this round of financing finalized, Kimi's "story phase" in the capital market has effectively entered the second half, and the pace of commercialization will become the only hard indicator to test the reasonableness of the current valuation. Whether it is the sustained payment ability of enterprise customers or the retention and monetization efficiency of C-end products, concrete revenue figures will need to provide answers; otherwise, the high valuation and abundant cash reserves will turn into pressure rather than an advantage in the next round of financing. From a more macro perspective, the second tier of domestic large models, under the dual influence of the global AI competition backdrop and China's local policy environment, is also unlikely to maintain the current synchronized progress. As the regulatory framework gradually clarifies, computing power and data resources concentrate on a few platforms, and enterprise customers' demands for supplier stability and service depth continue to rise, this tier is likely to accelerate differentiation in the next two to three years. Some projects may leverage both capital and technological advantages to move closer to the first tier, while others may be forced to clear out amid the squeeze of commercialization stagnation and tightening financing windows. For Kimi, which has just completed a new round of valuation increase, this round of financing may just be the starting point; the real test is only just beginning.
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