Key points
- Who is accusing Moonshot's founders
- What the shareholder wants
- How the fight could affect the IPO
Moonshot AI CEO Yang Zhilin and Chief Technology Officer Zhang Yutao are in talks to settle a dispute with a shareholder before the Kimi maker's planned Hong Kong listing, Reuters reported late on October 11.
The shareholder is Recurrent.ai, an AI software developer that Yang and Zhang Yutao co-founded in 2016, before they started Moonshot in 2023. Recurrent and some of its investors accuse the two of setting up Moonshot without authorization from Recurrent's board, making false representations to Recurrent investors, and enriching themselves at Recurrent's expense, according to a March 11 letter from Recurrent's lawyers that Reuters saw. Reuters couldn't independently verify the letter's claims.
The dispute, which is in arbitration in Hong Kong, has been going on since 2024. The letter also alleges, without providing evidence, that servers holding large language model data were moved from Recurrent to a Moonshot subsidiary without authorization in April 2023.
Recurrent seeks compensation tied to Moonshot's founding shares
Recurrent received 9.5% of Moonshot's original shares when the startup was set up. Recurrent and its investors are seeking compensation equal to 10.5% of Moonshot's original shares, according to Reuters.
Recurrent and its investors are also considering a separate legal action in the Cayman Islands against Moonshot President Zhang Yutong, according to the letter. It claims she received a significant Moonshot shareholding for her personal benefit and that this was concealed from Recurrent's shareholders.
Moonshot's founders have denied wrongdoing
Yang has previously denied the allegations. Chinese media reported that in a 2024 WeChat post, he said he had reached a deal with Recurrent's board members on setting up Moonshot and that Zhang Yutong's compensation was based on her professional abilities. David Morrison, a senior partner at MinterEllison, the law firm representing Yang, Zhang Yutao, and Moonshot, told Chinese media in November 2024 that the case "lacked both legal and factual basis."
Moonshot declined to comment to Reuters, and Recurrent didn't respond.
The IPO is still planned for early 2027
One person with knowledge of the dispute told Reuters it isn't expected to derail Moonshot's listing, but that an unresolved fight could raise governance, ownership, and disclosure questions for prospective investors. It's not clear whether a settlement is close.
Moonshot has confidentially filed for a Hong Kong IPO. Bloomberg reported on October 6 that the company had closed its final private funding round at a valuation of about $50 billion and was targeting a listing in the first quarter of 2027 that could raise up to $5 billion. Its backers include Alibaba (BABA) and Tencent (TCEHY).
