Moonshot, the developer of Kimi, has decided to abandon its VIE structure for its listing in Hong Kong, with a valuation of $20 billion.

      The $20 billion developer Kimi has notified shareholders of its plan to dismantle its variable-interest-entity (VIE) structure, as Beijing has indicated that an exemption is unlikely. The IPO is set to be one of the largest Chinese AI listings on record.

      Moonshot AI, the creator of the Kimi chatbot based in Beijing, has informed shareholders of its intention to eliminate its VIE structure to facilitate a listing in Hong Kong, as reported by the South China Morning Post on Monday, citing anonymous sources. Following its latest funding round, the company is valued at $20 billion, making the IPO potentially one of the largest since the category became accessible to public-market capital.

      The structural decision is significant. Moonshot's offshore entity is registered in the Cayman Islands, while its operational assets in mainland China are held through a VIE setup. According to the revised IPO rules from the China Securities Regulatory Commission, candidates with offshore VIE structures must now justify their existence during a procedural review, with regulators favoring mainland-based entities. Moonshot had initially sought a waiver.

      The company's shift to entirely unwind the structure indicates that its internal counsel assessed the waiver option as unlikely to succeed. The funding scenario adds scale to the IPO; Moonshot secured a $2 billion round earlier this month with a post-money valuation of $20 billion, bringing its total funding since November 2025 to approximately $3.9 billion, according to AI Insider.

      As of April, the company’s annualized recurring revenue has grown to about $200 million. Recent investors include Alibaba, with speculation about participation from Tencent and Hillhouse, although this has not been formally confirmed by the company. Bloomberg initially reported on the Hong Kong IPO consideration in March when Moonshot’s valuation was lower, and the regulatory challenges seemed surmountable through an exemption.

      In the broader context of the Chinese AI competition, Moonshot's Kimi chatbot has consistently ranked as one of the top-performing Chinese AI products based on user engagement, alongside DeepSeek’s open-weight models and ByteDance’s Doubao. Previous coverage from TNW offers accessible English-language context regarding the current state of Chinese AI. Companies that successfully list during the 2026-27 period will become benchmarks for valuing US-listed entities such as OpenAI (when it eventually lists), Anthropic, and others.

      The geopolitical considerations cannot be overlooked. Moonshot's listing will coincide with the AI discussions during the Trump-Xi summit in Beijing, the H200 export-licensing arrangement, which has mainly resulted in paperwork rather than actual chip delivery, and the CSRC's tightening of offshore structures for Chinese companies. Choosing a Hong Kong listing rather than one in New York indicates a deliberate effort to establish the company’s capital base in a jurisdiction that is directly regulated by the Chinese government. The willingness of Moonshot to forgo the VIE structure for the listing illustrates the operational impact of this choice.

      The practical aspects of unwinding the structure involve technical structural finance issues. Moonshot’s offshore entities and its mainland operating company will be merged or restructured into a single entity for the Hong Kong listing, requiring regulatory approval from several Chinese supervisory bodies.

      The timeline for this process, in line with the typical cadence for Chinese AI IPOs, is expected to span several quarters rather than months. A formal application for listing will follow the completion of the restructuring, plus the standard approval timeframe for the Hong Kong Exchange, potentially leading to an actual listing around late 2026 or early 2027.

      Unresolved matters include the indicative price range Moonshot will seek, the proportion of new versus existing equity in the offering, and whether the unwinding process will necessitate converting its US dollar funding rounds into renminbi-denominated equivalents. These details could significantly impact the rights of existing Western investors in the eventual listed entity. As of now, the company has not publicly addressed any of these three issues.