Kimi K3 🚀, President Xi, a mosquito-killing drone walk into a bar

TLDR;

Welcome back! This week, we talk about Kimi K3, the first Chinese model that might have closed the gap with the US, great models running on smartphones, market data, OpenAI’s first physical device, a mosquito-killing AI drone, and many more.

Enjoy!

MODELS

Kimi K3 is Here. And… wow

Kimi K3 was released yesterday, and some believe it has finally closed the gap with the US frontier. While GLM-5.2 narrowed the gap with Opus 4.8 and GPT-5.5, this model goes head-to-head with Fable and GPT-5.6 Sol.

It has 2.8 trillion parameters (50 billion activated, an extreme 1.7% sparsity, making it fast), establishing it as the largest Chinese model released to date by a wide margin.

It is larger than Opus 4.8 or Grok 4.5 (both at 1.5 trillion), and yet the economics are quite embarrassing for OpenAI/Anthropic.

Kimi K3 is priced at $3 per million input tokens and $15 per million output tokens, roughly Sonnet/GPT Terra-level pricing, while claiming performance comparable to the big ones, Fable and Sol, which are priced at $10/$50 and $10/$45, respectively.

In the BrowseComp benchmark, which measures how good agents are at finding hard-to-find information, not only is the model best-in-class, it’s outrageously cheaper, at least relative to Fable.

TheWhiteBox’s takeaway:

I expect a lot of industry talk over the coming days because, at least on a per-token basis, OpenAI and Anthropic now look horribly mispriced.

However, we must also acknowledge the other variable determining cost, token count, which shows OpenAI can be very competitive in terms of pricing. Nonetheless, as shown by Artificial Analysis, Kimi K3 is only slightly cheaper than GPT-5.6 Sol.

But there’s no way I can save Anthropic from the burn; they are really completely out of band relative to the rest. TogetherAI, a US inference company, ran several tests showing that Kimi K3 offers the same performance at 65% lower overall cost than Fable.

Seeing this, it’s not surprising that Anthropic is being forced to increase rate limits and usage of Fable despite previous claims, which tells you all you need to know about whether China is doing all of us a favor or not by open-sourcing its models.

In their defense, the reason Anthropic’s prices are so high isn't just margin-hoarding; it’s that Kimi and OpenAI’s models are much less “dense” mixture-of-experts (MoE) models.

MoEs (basically all models today) only activate a portion of the model for any given prediction. This lets you combine the advantages of having a larger model (they are smarter) with the latency of a smaller one.

However, you do pay a price. The fact that Kimi K3 is so incredibly sparse (only 1.7% of the model activates for any single prediction) is necessary to make models run faster, as Chinese chips are worse, but the trade-off is that you lose per-token compute.

Anthropic models are known to be much denser, which may explain why some people still consider Fable the best model in the world in terms of raw performance (at the expense of…

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