❯ Moonshot AI’s founders are reportedly in settlement talks with Recurrent.ai, which seeks compensation equal to 10.5% of the original shares

The two sides are talkingAccording to cnyes.com’s account of a Reuters report on October 12, citing people familiar with the matter, Moonshot AI CEO Yang Zhilin and CTO Zhang Yutao are in settlement talks with AI software company Recurrent.ai and some of its investors. The report says it is unclear whether an agreement is close. Moonshot declined to comment, and Recurrent.ai did not reply to a request for comment.

How the two companies are relatedYang and Zhang co-founded Recurrent.ai in 2016 and started Moonshot AI in 2023, and both remain directors of Recurrent’s holding company. Recurrent received 9.5% of Moonshot’s original shares when Moonshot was founded. The report says Recurrent and some investors are asking for compensation equal to 10.5% of Moonshot’s original shares, which could be worth more than $700 million at the $30 billion valuation of its June funding round. The matter dates from 2024 and is in arbitration in Hong Kong.

What each side has saidYang denies the allegations. MinterEllison, the law firm representing the two founders and Moonshot, said in 2024 that the case lacked legal and factual basis. Moonshot develops the Kimi chat assistant and large models, and its investors include Alibaba, Tencent, Meituan and China Mobile. It reportedly filed confidentially for a Hong Kong listing in September. People familiar with the matter said the issue is not expected to affect the listing plan.

▮ SIGNALThe report comes after Moonshot is said to have filed for its listing, and for now the two sides have chosen to negotiate.