Nvidia CEO Jensen Huang called Chinese AI models 'world class' at a trade expo this week. The remark, meant as praise, instead sent semiconductor stocks into a tailspin. According to a report from Crypto Briefing, the market reaction has already been dubbed 'Kimi panic' — a reference to the Chinese AI model Kimi that sparked the sell-off.
Jensen Huang's praise
Speaking at a trade expo, Huang said Chinese AI models are 'world class'. The comment was intended to acknowledge the rapid progress of China's AI sector. But investors heard something else: a signal that Chinese competitors are closing the gap with US firms like Nvidia. The timing wasn't great — semiconductor stocks were already jittery heading into the second half of 2026.
Market sell-off
Following Huang's statement, semiconductor stocks dropped more than 20%. The sell-off was swift and broad. Traders on social media quickly coined the term 'Kimi panic', tying the rout to Moonshot AI's Kimi K3 model. The Kimi K3 had already been making headlines for its performance benchmarks. Huang's endorsement appears to have been the trigger that turned existing anxiety into a full-blown sell order.
The Kimi K3 factor
Moonshot AI's Kimi K3 is the model at the center of the storm. While Huang didn't name it directly, the market connected the dots. The 'Kimi panic' label stuck because the sell-off felt specific — not a general tech downturn, but a reaction to a single competitive threat. Whether the panic is overblown is an open question. For now, chip stocks are nursing losses and the term is trending.
What happens next depends on whether the sell-off was a one-day overreaction or the start of a broader repricing. The next few trading sessions will tell. No one at Nvidia or Moonshot AI has commented further.
