Microsoft considers replacing ChatGPT and Claude with China's Kimi K3 to save $600 million - Yahoo Finance

What the report says

Yahoo Finance, republishing a Moneywise article, reported that Microsoft is preparing to test Moonshot AI’s Kimi K3, a Chinese artificial intelligence model, for possible use in Copilot, its flagship AI assistant. The article cited reporting from The Information that said Microsoft could also consider bringing Kimi K3 into Azure if it can support comparable functions to models from OpenAI and Anthropic. The reported shift could cut Microsoft’s costs by as much as $600 million, or about 60% per token, according to The Information. Microsoft declined Moneywise’s request for comment.

Kimi K3, released July 16 as an open-weight model, has drawn attention because of its lower price and reported performance. Yahoo/Moneywise said the model costs $15 per one million output tokens, compared with $50 for Anthropic’s Claude Fable 5. The article also noted that Kimi K3 scored 1679 on Arena’s Frontend Code leaderboard, ahead of some U.S. models listed in that benchmark.

The possible Microsoft test comes amid growing U.S. political concern about Chinese AI systems. The article cited former White House AI official David Sacks calling Kimi K3’s release worrying, and noted that OpenAI and Anthropic executives have warned about cheaper Chinese models entering the U.S. market. Treasury Secretary Scott Bessent told Fox Business that the Trump administration could pursue sanctions if it finds overseas models are using stolen intellectual property, and said officials may consider requiring U.S. companies to disclose use of Chinese AI models.

The development matters because major AI services face high operating costs, while governments are increasingly treating model supply chains as a national security issue.