Four dollars. That’s what Kimi charged last month for a million words of output.
This week it shipped a better model and charged fifteen.
Everyone expected Chinese AI to get cheaper forever. Turns out the bill goes up when you reach the front.
Let’s get into it.
THE BIG READ
The Open Model That Caught Up, Then Raised Its Prices
1. The claim
Moonshot released Kimi K3 on Friday: 2.8 trillion parameters, the largest open-weight model anyone has ever shipped. The weights land by July 27, free to download.
Independent testing put it at 57 on the Artificial Analysis Intelligence Index. Fourth overall, behind Claude Fable 5 (60) and GPT-5.6 Sol (59).
Fourth. For a model you can run on your own machines.
The previous biggest open models topped out near 1.6 trillion parameters. K3 nearly doubled that in one release. Read More →
2. The part that got buried
K3 costs $3 per million input tokens and $15 per million output. Its predecessor, K2.6, cost $0.95 and $4.
That’s 3.75x more on output. And $3/$15 is exactly what Anthropic charges for Sonnet 5. Not close to it. Exactly it.
The whole story of the last two years was Chinese labs undercutting the West into oblivion. DeepSeek still runs $0.04 a task. K3 runs $0.94, roughly what GPT-5.6 Sol costs.
Frontier performance is expensive no matter whose flag is on the box. The full pricing breakdown is here →
3. The catch
K3 gets more answers right than K2.6 did. Accuracy climbed from 33% to 46%.
It also makes more of them up. Its hallucination rate went from 39% to 51%.
More knowledge, more confidence, more invention. Roughly half of what it tells you, it may have simply decided was true.
The takeaway: the gap between open and closed has basically closed at the frontier. The price gap is closing too, just in the direction nobody expected.
TRENDING ON X
YOUR TURN
Results next week
ALSO HAPPENING
OpenAI Is Building Hardware Now
Bloomberg’s Mark Gurman got the details on OpenAI’s first gadget. It’s a screenless smart speaker with motorized parts that move on their own, so it feels alive rather than appliance-shaped.
It reads your emails to learn who you are, then offers things up before you ask.
Jony Ive’s studio is shaping it. Apple’s former head of industrial design is running it. OpenAI has hired 400+ people out of Apple.
Apple noticed. It sued last week over stolen trade secrets. Read More →
Meanwhile, on your desk: the $230 Codex Micro, a slab of joysticks and a dial for steering AI agents.
Six keys glow to show what each one’s doing. The dial turns reasoning up and down like volume.
It sold out immediately. Read More →
HOW COOL IS THAT?
A Robot That Puts Your Clothes On
Kim Nam Gyun was cycling when it started raining and wondered why his raincoat couldn’t just put itself on.
So his team at KAIST and Stanford built exactly that. Soft “vines” sewn into the fabric inflate with air and climb the clothing up your body, like ivy up a wall. You don’t even have to stand still.
Worth thirty seconds of your day →
ALSO READ
America’s answer, sort of. Mira Murati’s Thinking Machines released Inkling, a 975B open model that beats every US lab’s open offering and still trails China’s. Read More
The world tries to agree on AI. Twenty-nine countries signed on to a global AI cooperation body, and Xi told Shanghai that AI “should not be a solo performance by any single country.” Read More
Meta gets sued over its AI layoffs. Workers claim the company targeted people on medical and family leave when it cut staff to fund its AI push. Read More
Claude goes to school. Anthropic launched Claude for Teachers with a promise it won’t train on student data. Read More
Spotify wants to talk about music. A ChatGPT-style assistant is rolling into the app, so you can describe a vibe instead of hunting a playlist. Read More
Worth a read. A pediatric surgeon on what happens to kids raised alongside AI, and why the early years may matter more than anyone’s admitting. Read More
WORTH A TRY AI TOOLS
Grok Build - SpaceXAI open-sourced its coding agent and CLI this week. The whole thing is on GitHub, free to read, fork, or run in your terminal.
Why try it? A frontier lab’s coding agent, with the hood off. Try it here →
Timely - Hit ⌘⇧A anywhere, pick a range, paste. Your free slots come out timezone-correct and formatted, without opening a calendar. It runs entirely on your machine.
Why try it? Because “when are you free?” shouldn’t cost you five minutes. Try it here →
BEFORE YOU GO
An open model reached the frontier this week, and the first thing it did was put its prices up.
Everyone’s been asking who wins the AI race. Maybe the better question is what it costs to stay in it.
See you next week.
