‘Punches above its weight’: compact AI model from China’s StepFun outshines larger rivals

South China Morning PostEN 1 min read 100% complete by Ben JiangFebruary 3, 2026 at 10:30 AM

AI Summary

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Chinese AI start-up StepFun has launched Step 3.5 Flash, a compact AI model designed for advanced reasoning and efficiency. Despite having only 196 billion parameters, significantly fewer than competitors like Moonshot AI and DeepSeek, StepFun claims its model outperforms these larger systems in benchmark tests measuring agentic, reasoning, and coding capabilities. Step 3.5 Flash reportedly topped four reasoning benchmarks, surpassing leading systems from DeepSeek, Moonshot AI, Zhipu AI, and MiniMax, while trailing only OpenAI in some tests. StepFun's CTO emphasized the model's focus on strong logic, efficient context window, and speed, specifically for use in AI agents. The Shanghai-based company aims to demonstrate that smaller, more focused models can rival the performance of larger, more resource-intensive AI systems.

Key Entities & Roles

Key Player Opposition Context

OpenAI 30% Microsoft 30% Zhipu AI 40% MiniMax 40% Zhu Yibo ×250% Shanghai 50% China 60% Moonshot AI ×370% DeepSeek ×370% StepFun ×490%

Keywords

artificial intelligence 100% ai model 90% stepfun 80% reasoning capabilities 70% agentic capabilities 70% lightweight model 60% parameters 50% benchmark tests 50% deepseek 40% moonshot ai 40%