OpenAI and Anthropic, two leading US AI developers, lost billions in predicted market value this week after Chinese startup Moonshot AI launched a competitive open-source model, Kimi K3, on Friday. The model is advertised as the first open-source model of its size, allowing more user modification than Anthropic's Claude and OpenAI's ChatGPT. Analysts judge K3 as competitive with leading US models, which are less freely customizable. Moonshot had to temporarily pause new subscriptions due to demand straining capacity.
Market value drops amid Chinese competition
Implied values for Anthropic's sharemarket debut slumped US$232bn to $1.56tn from Friday to Tuesday on IG's trading platform, while OpenAI dropped US$160bn to $1.16tn. Both companies remain privately owned and valued at less than US$1tn each, so IG's numbers are market bets, not true values. However, the companies hope to follow SpaceX, which raised $86bn and soared to a $2.1tn valuation after listing on public markets in June. Anthropic has begun registering to list on US sharemarkets, aiming to raise billions from new investors.
Australian regulation as a strategic play
Top US AI developers Anthropic and OpenAI cheered when Australia announced new AI rules. Big tech celebrating limits might seem counterintuitive, but there is a broader play. Australia is one of few countries regulating AI directly, and Prime Minister Anthony Albanese hopes to set global tone, citing leadership on social media bans for under-16s. Malik Ahmed Khan, equity analyst at Morningstar Equity, says technology companies would find it easier to invest in Australia as they learn regulation direction. Regulation could also boost companies' prospects and market values if more countries follow suit. "A positive deal in Australia could enable them to pursue similar deals across the globe," Khan said.
Lawsuits and regulatory clarity
Anthropic faced a surprise lawsuit from authors, settling for US$1.5bn on Monday. The company will pay authors about US$3,000 for each of an estimated 500,000 books covered by the settlement. One author is Andrew Charlton, Australia's assistant technology minister, who says new regulation will mean Australian creatives can choose whether AI models train on their work and big tech must pay them. Charlton says the rules could be a boon to big tech: "If we are upfront with what we expect in this Australian standard, we can give clarity to investors that in some ways enhances the attractiveness of Australia."
Industry positioning and national security
Albanese signalled consultation with industry and other countries to legislate regulations enabling AI's arrival, not restricting it. OpenAI and Anthropic positioned themselves as partners. Anthropic CEO Dario Amodei, a former OpenAI VP, called for a coalition of democracies to dominate AI and lock out China, echoing national security concerns. With Kimi K3's launch, analysts believe the US will increasingly block businesses from using Chinese-based models over security fears. Amodei also called for domestic regulation with testing and blocking of models presenting "unacceptable risks," but with protections against political favoritism. Aruna Sathanapally, CEO of Australia's Grattan Institute, met Amodei and said his concerns seemed sincere: "He was seeing things within his own company that were giving him great concern about what Anthropic, as well as their competitors, may be capable of developing." She added that vested interests in regulation shape do not mean calls for regulation are unfounded, but competitive neutrality must be considered.
