RBC 'Net Add: Kimi K3 rocks the frontiers' world - but does it?

Research evidence excerpt

RBC 'Net Add: Kimi K3 rocks the frontiers' world - but does it?

RBC Capital Markets, LLC

Brad Erickson (Analyst)

(971) 842-9607,

brad.erickson@rbccm.com

Jonathan Atkin (Analyst)

(415) 633-8589,

jonathan.atkin@rbccm.com

Ken Herbert (Analyst)

July 19, 2026 (415) 633-8583,

ken.herbert@rbccm.com

Khadijah Gibson, CFA (AVP) RBC 'Net Add: Kimi K3 rocks the frontiers' world - (347) 610-7116,

khadijah.gibson@rbccm.comRESEARCH but does it? Audrey Stuart (Associate)

(212) 437-9151,

Our view: Moonshot AI's latest Kimi K3 model demonstrates that scaling laws continue to directionally audrey.stuart@rbccm.com

flatten i.e., a cheaper model can more closely match expensive frontier models based on smart design

choices. Our initial take. 1) no change for compute and infra providers (meaning positive), 2) negative

for nonvertically integrated labs & 3) positive for AI-powered apps that people feared the big labs would

eventually compete with directly. Model benchmarks & offsets aside (details below) - we'd take a more

balanced view where most scaled agentic deployments likely take a hybrid approach with virtually allEQUITY the industry commentary we see pointing in this direction which to us, reflects a reality where the

gap between cheap and accurate is likely to remain. We continue to believe that verticalization for

hyperscalers is likely and while we're excited by a hybrid world's ability to democratize the tech at the

application layer, we'd still view the verticalized players with data, distribution and control over compute

as being best positioned. Kimi K3's weights will be released on July 27, when researchers can learn more

about how the training was specifically tuned.

Moonshot AI released Kimi K3 which is a 2.8 trillion parameter open-weight model showing initial