Moonshot executives are in settlement talks with a shareholder over a legal dispute ahead of the Chinese artificial intelligence company’s planned Hong Kong listing, Reuters reported, citing people familiar with the matter.
The shareholder is seeking compensation over alleged misconduct. The talks had not been previously reported, and it remains unclear whether a settlement is close.
Claims trace back to Recurrent.ai
According to a March 11, 2026 lawyer’s letter sent by Recurrent.ai and some of its investors to Moonshot investors, Moonshot chief executive Yang Zhilin and chief technology officer Zhang Yutao were accused of making false statements to Recurrent investors and enriching themselves at Recurrent’s expense.
Company records show Yang and Zhang co-founded Recurrent.ai in 2016 and founded Moonshot in 2023. They still serve as directors of Recurrent’s holding company. The dispute has been in arbitration in Hong Kong since 2024.
The letter also alleged that key model data servers were moved, other data was deleted, and Moonshot was established without board authorization. Reuters said it could not independently verify those allegations.
Compensation demand and valuation
People familiar with the matter said Recurrent received 9.5% of Moonshot’s original shares when the company was set up and is now seeking compensation equal to 10.5% of the original stake. At Moonshot’s $30 billion valuation from its June fundraising, that portion could be worth more than $700 million.
Possible IPO implications
Reuters reported in September that Moonshot had confidentially filed for a Hong Kong IPO. One person familiar with the matter said the dispute is not expected to threaten the listing, but if it is not resolved, it could create governance, ownership, and disclosure issues.
Yang had previously denied the allegations. His lawyer had said the case lacked legal and factual basis.