Moonshot AI Negotiates to Resolve Recurrent.ai Legal Dispute Before IPO

Moonshot AI, a Chinese AI company, is in talks with shareholders to resolve a legal dispute with Recurrent.ai and its investors before a planned initial public offering, according to Reuters.

Recurrent.ai and some of its investors have accused Moonshot AI CEO Yang Zhilin and CTO Zhang Yutao of making false statements to Recurrent investors and enriching themselves at Recurrent's expense. The accusations include the unauthorized transfer of servers containing key large language model data to a Moonshot AI subsidiary, though no evidence was provided. The letter also referenced that Zhang Yutong, who stepped down as a Recurrent director in 2022, received a "substantial stake" in Moonshot AI, a fact allegedly concealed from Recurrent shareholders.

Recurrent and its investors are seeking compensation equivalent to 10.5% of Moonshot AI's original shares. Moonshot AI had granted Recurrent a 9.5% stake at its founding. The value of the 10.5% claim at current valuation is unclear.

The dispute has been in arbitration proceedings in Hong Kong since 2024. Moonshot AI confidentially filed for an IPO with the Hong Kong Stock Exchange in September 2026, completed a private funding round at a valuation of about $50 billion, and is targeting a Hong Kong listing in the first quarter of 2027. Sources said the dispute is not expected to jeopardize the IPO, but unresolved issues could raise governance, ownership and disclosure concerns for potential investors and complicate the listing process.