Allen Zhu Exposes Conflict Between Moonshot AI and Recurrent AI Shareholders

In the early morning of December 5th, Allen Zhu, managing partner of GSR Ventures, posted on his WeChat moments listing three “facts” aimed at exposing the true nature of the conflict between Moonshot AI and Recurrent AI’s old shareholders, as well as the real reason for former managing partner Zhang Yutong’s departure from GSR Ventures.

According to Allen Zhu’s statement, “Moonshot AI” itself is a project incubated internally by Recurrent AI for two years. The arbitration case previously initiated by Recurrent AI’s old shareholders against Moonshot AI’s two founders was fundamentally not about exemption clauses but rather about a board resolution being delayed until January this year due to Zhang Yutong concealing conflicts of interest with significant implications for herself.

Allen Zhu pointed out that Zhang Yutong concealed important facts from GSR Ventures, Recurrent AI investors and shareholders – namely that after the split-up, she obtained 9 million shares representing an initial stake of 14% in Moonshot AI for free. This number far exceeds the 9.5% share received by Recurrent AI back then.

Zhang Yutong was subsequently dismissed by GSR Ventures because she “violated fund partners’ fiduciary duties to limited partners and also violated company directors’ fiduciary duties to shareholders.”

This move by Allen Zhu has gradually brought to light the truth behind the previously mysterious arbitration case and rumors surrounding Zhang Yutong’s departure.

SEE ALSO: Moonshot AI Responds to Founder Yang Zhilin Being Taken to Arbitration by Former Investors

Less than a month ago, Yang Zhilin, founder of Moonshot AI, and co-founder and CTO Zhang Yutao were arbitrated by investors from Recurrent AI in Hong Kong.

At that time, five out of the seven investment institutions involved in the arbitration application were GSR Ventures, Eminence Ventures, Boyu Capital, WestSummit Capital, and Zoo Capital. The reason for initiating arbitration was that Yang Zhilin and Zhang Yutao had started fundraising and establishing Moonshot AI before obtaining waivers from these five investors.

One speculation at the time was that when Yang Zhilin and Zhang Yutao left to establish Moonshot AI, they had not reached an agreement with shareholders of Recurrent AI on certain terms. On the other hand, there was urgency in entering the field of general large-scale models entrepreneurship and financing process could not be delayed any longer. This conflict became a historical legacy issue for Moonshot AI.

Another view is that several investors from Recurrent AI may have been dissatisfied with their stake in Moonshot AI later on. Especially after Moonshot AI’s valuation significantly inflated, the new company’s growth potential showed a huge gap compared to Recurrent AI.

Therefore, Allen Zhu’s purpose in speaking out may be to clarify core facts for transparency. The arbitration initiated by multiple investors can be seen as part of their pursuit for procedural justice.

After the arbitration case was filed earlier on, Moonshot AI’s legal representatives responded stating that they believed this matter lacked legal basis and factual foundation would provide defense according to law. As of now there has been no public response from Zhang Yutong or Moonshadow regarding Allen Zhu’s statement.

In any case，this highly representative conflict event in China’s large model venture capital sector clearly has not yet reached its conclusion.