China's GPT-5 rival is open source

PLUS: Microsoft's superintelligence squad and OpenAI's 'backstopgate'

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Gen AI Art
November 08, 2025 • Estimated Reading Time: 8 minutes

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An open-source model out of China is posting benchmark scores that directly challenge industry giants like GPT-5 and Claude 4.5.

Developed by Alibaba-backed Moonshot AI for a fraction of the cost of its rivals, the release raises a critical question: is the era of expensive, closed-source dominance facing a serious threat from accessible, high-performance alternatives?

Today in AI:

  • China's open-source GPT-5 rival

  • Microsoft's new superintelligence team

  • OpenAI's 'backstopgate' controversy

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What’s new? Alibaba-backed Moonshot AI has launched Kimi K2 Thinking, an open-source model posting benchmark scores competitive with giants like GPT-5 and Claude 4.5.

What matters?

  • The model outperformed both GPT-5 and Claude 4.5 Sonnet on several agentic reasoning benchmarks and set a new top score on the Humanity’s Last Exam test.

  • Beyond benchmarks, Kimi K2 Thinking can autonomously chain together 200-300 tool calls to complete complex tasks, showcasing its advanced agentic capabilities.

  • Trained for reportedly under $5 million, its low cost makes it a highly accessible and serious alternative to expensive, closed-source models from leading labs.

Why it matters?

The release marks a significant step forward for both China's AI ecosystem and the global open-source community. This development pressures closed-model providers by offering powerful performance at a fraction of the cost, accelerating innovation across the industry.

GUIDE

What’s new? Microsoft AI CEO Mustafa Suleyman announced the formation of a new Superintelligence Team, a research division focused on solving specific, high-impact societal problems.

What matters?

  • The team’s mission is to build Humanist Superintelligence, prioritizing narrow challenges in areas like medicine and clean energy over the pursuit of open-ended AGI.

  • Microsoft is backing the initiative by attracting top talent from rivals, with Inflection co-founder Karen Simonyan serving as chief scientist alongside researchers from DeepMind, OpenAI, and Anthropic.

  • This move follows a new arrangement with OpenAI that allows both companies to pursue superintelligence independently, marking a significant strategic divergence for Microsoft.

Why it matters?

This gives Microsoft's own AI research a distinct and practical identity, separate from its massive investment in OpenAI. By focusing on tangible applications over a pure AGI race, Microsoft is creating a new competitive front centered on solving specific global challenges.

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What’s new? OpenAI faced intense criticism after CFO Sarah Friar suggested the company might want a federal “backstop” for its massive AI investments. The comments sparked market jitters, leading to a swift retraction from both Friar and CEO Sam Altman.

What matters?

  • The controversy began when Friar initially told the WSJ she would support a federal guarantee to help finance the enormous cost of building out AI infrastructure.

  • Leadership quickly reversed course, with Friar stating she “muddied the point” and CEO Sam Altman posting a statement that firmly rejected government bailouts for private AI firms.

  • The incident poured fuel on existing concerns about OpenAI’s massive spending and escalating financial commitments, stoking fears that the company is becoming “too big to fail.”

Why it matters?

The brief firestorm highlights the immense financial pressures involved in developing frontier AI models. It also forces a public conversation about the long-term economic sustainability of leading AI labs and their complex relationship with governments.

Everything else in AI

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Delve published a guide on planning and launching out-of-home advertising campaigns, detailing tactics to drive quantifiable results for scaling companies.

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