18 Sources
[1]
Anthropic claims Alibaba defied Trump to attack Claude and steal capabilities
Anthropic has accused the Chinese firm Alibaba of launching the largest attack yet attempting to clone Claude, as China races to match the capabilities of Anthropic's leading model following Mythos' release and subsequent restriction from foreign markets. Ars obtained a June 10 letter sent to Senators Tim Scott (R-S.C.) and Elizabeth Warren (D-Mass.) one day ahead of a Senate committee hearing on "AI and the American Dream." In the letter, Anthropic shared "new, confidential evidence of the largest campaign to illicitly extract Claude's capabilities we have ever measured." The attacks occurred between April 22 and June 5, when "operators affiliated with Alibaba and Alibaba Qwen, Alibaba's AI lab" allegedly generated "more than 28.8 million exchanges with Claude through almost 25,000 fraudulent accounts," Anthropic said. Violating Claude's terms of service and access restrictions, this campaign "targeted some of Claude's most valuable capabilities, such as agentic reasoning, software engineering, and long-horizon tasks." According to Anthropic, Alibaba evaded detection by "using obfuscation techniques and proxy networks." As Chinese demand for reliable obfuscation techniques increases, Anthropic warned there's already "a growing circumvention economy" to fuel an ever-expanding web of future distillation attacks. Alibaba allegedly ignored Trump warning Like other Chinese labs attempting to copy US frontier models, Alibaba's aim, Anthropic alleged, was to extract Claude's capabilities "without incurring the training and R&D costs required to train" their own frontier model. These attacks have become "widespread" and "turn hundreds of billions of dollars in American investment and R&D into a massive subsidy for our geopolitical competitors," Anthropic said. Importantly, Anthropic said, the Alibaba campaign occurred after Donald Trump took steps to curb such illicit distillation attacks and defend US national security. Back in April, Trump accused China of "industrial-scale" AI theft after Anthropic accused Chinese firms DeepSeek, Moonshot, and MiniMax of using the same tactic as Alibaba allegedly used to generate "over 16 million exchanges with Claude through approximately 24,000 fraudulent accounts." OpenAI and Google have published findings on similar attacks on their models, Anthropic said. Anthropic accused Alibaba of "brazenly" racing to make a copycat Claude, seemingly unfazed by Trump's threats to crack down on foreign efforts to copy US frontier models despite depending on US investors. "Alibaba is listed on the New York Stock Exchange, maintains business operations in the United States, and is accountable to US investors and regulators," Anthropic's letter noted, "yet this activity unfolded in the weeks after" Trump's memo warned that cloning attempts were "unacceptable." Ars could not immediately reach Alibaba for comment. Anthropic wants firms like Alibaba punished Alibaba is already preparing to clash with Trump, though. In a lawsuit filed Tuesday, Alibaba accused the Trump administration of blacklisting the company after falsely linking the company to the Chinese military, Reuters reported. Alibaba is seeking to remove the Trump designation, which they claimed has "no basis in fact or law." "Alibaba is governed by an independent board, none of whom has any military affiliation," Alibaba said. "Its products and services are built for retail, logistics, and enterprise information technology -- not weapons, defense, or intelligence." Anthropic appears unconvinced, however, that Alibaba isn't working with the Chinese government. In the letter, Anthropic warned that without stronger interventions, these distillation attacks will "help China reach Mythos Preview-level capabilities sooner." To keep the US ahead of China, Anthropic recommended that Congress pass legislation with three objectives. First, antitrust laws must be updated to allow AI firms to share information about evolving Chinese tactics to deter more threats. Second, the US needs more export controls on chips to hamstring Chinese access to advanced compute so that they simply can't train on US model outputs. That could make conducting distillation attacks pointless, Anthropic suggested. Finally, Congress should pass laws penalizing Chinese labs' "bad behavior" so that it's "more difficult and costly" to rely on distillation attacks to advance Chinese models. Penalties could include limiting Chinese firms from accessing US models or advanced US chips or from relying on data centers outside of China, Anthropic suggested. Anthropic declined to clarify whether Alibaba's alleged attacks were significant enough to help meaningfully accelerate China's AI capabilities or comment on any specific steps taken to thwart the attacks. Instead, a spokesperson provided a statement to Ars, echoing sentiments expressed in the letter to senators. "We believe combating the threat of illicit distillation requires coordinated action between government and industry, and we will continue working with Congress and the Administration to maintain American AI leadership," Anthropic said. China races to match Mythos' capabilities Anthropic's letter positions the AI firm as intent on helping the US hold the line so that China cannot surpass US capabilities. If that happened, Anthropic warned that China could blindside a defenseless US -- suddenly possessing "advanced cyber capabilities to deploy against the US government and American companies and exploit vulnerabilities faster than previously possible." It's important to keep the US as far ahead as possible, Anthropic's letter said, because "the larger the capability gap," the "more time the US government will have to harden cyber defenses and adopt AI systems across national security domains" as China's AI advances. Additionally, Anthropic warned that if the US ignores distillation attacks, China could release advanced AI models "with weak safeguards that are easily jailbroken, enabling other US adversaries to use these models for a wide range of activities that run contrary to US interests." Alibaba's models have been downloaded more than 700 million times and are at the frontier of China's AI industry. The official newspaper of the Central Committee of the Communist Party of China (CPC), People's Daily, recently hyped Alibaba's Qwen family of AI models as "the most popular open-source AI system worldwide." The AI firm will likely maintain a defensive posture as US scrutiny escalates, but the company risks hobbling its business the longer its US fights endure. Alibaba's stock dropped 3 percent after Anthropic's accusations became public, Yahoo Finance reported. Anthropic's suspicions that China is racing to build models to match Claude's capabilities have been confirmed by at least one major Chinese tech founder. At a cybersecurity conference in Beijing yesterday, 360 Security Technology founder Zhou Hongyi likened Anthropic's Mythos to a "cyber nuclear weapon," the South China Morning Post reported. Zhou told the audience that Mythos' sudden giant leap in its ability to find cybersecurity vulnerabilities was a "terrifying change" that had effectively "democratized" cyberattacks, SCMP reported. For China, having no access to Mythos was a significant disadvantage, Zhou said. He bemoaned that Project Glasswing, which granted more than 40 US organizations access to Mythos Preview to strengthen cyber defenses, excluded China. "This means US organizations can use Mythos to scan your vulnerabilities, but you don't even have the qualification to catch a glimpse of Mythos," Zhou said. China's only way forward is to create its own Mythos-like model, Zhou said, warning that such a "game-changing weapon in cyber warfare" cannot "be held solely in the hands of others." According to Zhou, China must race to copy Mythos' capabilities so that there's mutually assured destruction should its rival attempt to seize gains using its advanced AI. SCMP noted that "Zhou's remarks marked the first time a prominent Chinese technology founder has publicly warned about the strategic risks posed by the US frontier AI model." Right now, Zhou said that Chinese firms are "well short of Mythos-level capabilities," SCMP reported. He then positioned his own company as developing a solution, which focuses "on AI agent systems that combined existing foundation models with specialist security data sets and vulnerability knowledge bases," instead of "trying to match the US in frontier model capability and computing power."
[2]
Anthropic is removing its covert code for catching Chinese competitors
Anthropic says that it plans to remove hidden codes it added to Claude Code several months ago to catch other AI companies that are trying to steal from its models. Thariq Shihipar, an engineer at Anthropic who works on the Claude Code team, said on Tuesday that a fix should appear on July 1. "This is an experiment we launched in March that was meant to prevent account abuse from unauthorized resellers and protect against distillation," Shihipar explained, using the industry term for copying AI models through repeated queries. "The team has landed stronger mitigations since then and we've actually been meaning to take this down for a while." He said that the pull request to remove the code has been merged and should appear in Wednesday's Claude Code release. The experiment, as described by a developer who goes by the name Thereallo, consisted of applying steganography - hiding secret data in plain sight - to the Claude Code system context that gets passed to Anthropic's servers. The relevant code checks Claude Code's base URL environment variable, used to route API requests to a proxy or gateway. If the base URL has been overridden, the code goes on to check the system timezone and whether the hostname matches any entry in a list of known Chinese AI labs, other AI companies, account resellers, and gateway domains. Thereallo said that while it makes sense that Anthropic might try to detect a hostname associated with a Chinese AI rival or a reseller, the implementation should not have been concealed. "[Claude Code] silently alters the system prompt using invisible-ish Unicode markers," Thereallo wrote. "It encodes proxy / gateway classification into a sentence that looks like plain English. It hides the domain list behind XOR and base64. This is not a malicious feature, but it is a weird choice for a developer tool that asks for trust." Asked whether Anthropic disclosed its covert usage tracking mechanism in any of its terms of service documents, a company spokesperson pointed to Shihipar's remarks, which did not address that question. Nor did Anthropic's spokesperson immediately respond to a request to specify what "stronger mitigations" have been implemented to prevent unauthorized resellers and distillation. In February, shortly before the implementation of the steganographic codes, the AI biz said that it was investing in defenses against distillation. These included detection via classifiers and behavioral fingerprinting systems, intelligence sharing with other AI labs, access controls, and countermeasures that make it harder to use model output to reproduce the model. One such defense came to light when the company's Claude Code source leaked. The coding agent includes a Typescript file with a flag called ANTI_DISTILLATION_CC. The flag, when set, injects fake tool data into API requests in an attempt to make that data toxic for model training. Even with its technical defenses against competition, Anthropic urged the AI industry, cloud providers, and government to respond to the threat of model distillation. A recent White House Executive Order that articulates the intent to protect US AI from foreign adversaries shows that the feds have some interest in answering that call. ®
[3]
Anthropic says Alibaba illicitly extracted Claude AI model capabilities
June 24 (Reuters) - U.S. AI company Anthropic accused Alibaba (9988.HK), opens new tab, the Chinese technology and e-commerce giant, of illicitly extracting its Claude AI model capabilities in what it said was the largest known distillation attack on the company to date, according to a letter seen by Reuters. Distillation attacks are a way AI companies improperly obtain capabilities to improve their own models, and involve training a less capable model on the outputs of a stronger one, Anthropic has said in the past. Anthropic said the campaign was conducted between April 22 and June 5, 2026, and generated more than 28.8 million exchanges with Claude through almost 25,000 fraudulent accounts. Anthropic said in the letter that it is a way for competitors to harvest American AI, and help China reach its most advanced model's capabilities sooner. It said the campaign was conducted by operators affiliated with Alibaba and Alibaba Qwen, Alibaba's AI lab. Alibaba did not immediately respond to a request for comment. The letter, dated June 10, was sent to Senators Tim Scott and Elizabeth Warren, the chair and ranking member, respectively, of the U.S. Senate Banking Committee, ahead of a hearing scheduled on AI. Reporting by Karen Freifeld; additional reporting by David Shepardson Our Standards: The Thomson Reuters Trust Principles., opens new tab
[4]
Anthropic accuses Alibaba of using 25,000 fake accounts to scrape Claude AI
The alleged campaign generated 28.8 million queries in a large-scale model-extraction effort to replicate AI capabilities. Anthropic has accused Alibaba of using nearly 25,000 fraudulent accounts to extract capabilities from its Claude AI models, in what the US AI company described as the largest known attack of its kind against it. The campaign, carried out between April 22 and June 5, generated more than 28.8 million exchanges with Claude, according to a June 10 letter Anthropic sent to senior members of the US Senate Banking Committee, Reuters reported. Anthropic said the effort involved "distillation," a technique in which a less capable AI model is trained on the outputs of a more advanced system, potentially allowing rivals to replicate some of its capabilities at lower cost.
[5]
Anthropic accuses Alibaba of campaign to 'brazenly' and 'illicitly' extract AI capabilities
Anthropic sent a letter to the U.S. Senate Committee on Banking, Housing, and Urban Affairs accusing the Chinese tech company Alibaba of "brazenly" and "illicitly" attempting to extract its artificial intelligence capabilities, CNBC confirmed on Wednesday. The letter, which was addressed to Sen. Tim Scott, R-S.C., and Sen. Elizabeth Warren, D-Mass., on June 10, said Alibaba carried out "the largest known distillation attack on Anthropic to date." Distillation is an AI training method where a small, less capable model is built using outputs from an existing, stronger model. Anthropic said operators affiliated with Alibaba and its AI lab carried out 28.8 million exchanges with its models using roughly 25,000 fraudulent accounts between April 22 and June 5, according to the letter, which was viewed by CNBC. "We believe combating the threat of illicit distillation requires coordinated action between government and industry, and we will continue working with Congress and the Administration to maintain American AI leadership," an Anthropic spokesperson said in a statement. A representative for Alibaba did not immediately respond to CNBC's request for comment. Bloomberg was first to report the letter.
[6]
Anthropic accuses Alibaba of illicitly extracting AI capabilities
US artificial intelligence (AI) giant Anthropic has accused Chinese e-commerce and technology firm Alibaba of "brazenly" and "illicitly" extracting its Claude AI model's capabilities. In a letter seen by the BBC, the San Francisco-based company said operators linked to Alibaba carried out almost 29 million exchanges with Claude using thousands of fraudulent accounts in what it called the largest extraction campaign of its kind. Anthropic urged Congress to penalise the companies behind attacks like this and to ramp up measures to prevent US tech from being stolen. The BBC has contacted Alibaba for comment and requested more details from Anthropic. Anthropic's letter, dated 10 June and addressed to US Senators Tim Scott and Elizabeth Warren, accused New York Stock Exchange-listed Alibaba of carrying out "the largest campaign to illicitly extract Claude's capabilities". According to Anthropic, the campaign was carried out through what are known as "distillation attacks", which extracted answers from a stronger AI model to train a weaker one. Alibaba-linked operators targeted Claude's most valuable capabilities, including its ability to tackle longer and more complex tasks and its approach to decision-making, Anthropic said. These type of attacks are carried out on an "industrial scale" to enable Chinese companies to harvest and repackage US AI capabilities as their own, the company said. The letter also cited other alleged attacks, which Anthropic said posed a threat to the US military. "Distillation attacks turn hundreds of billions of dollars in American investment and [research and development] into a massive subsidy for our geopolitical competitors," said Anthropic. It cited the US Department of Defense's claims that Alibaba and several major firms like car maker BYD and tech company Baidu are tied to the Chinese military. The companies have denied any such allegations, while Alibaba this week sued the US government in a bid to get its name removed from the Pentagon blacklist. US developers have previously accused Chinese competitors of using distillation attacks to train their models to rival American AI technology at a fraction of the cost. OpenAI has also previously accused Chinese groups of employing the same practice. Anthropic is a leading AI developer and, alongside ChatGPT-maker OpenAI, is gearing up for a blockbuster stock market debut that could make it one of the most vaulable companies in the world. But some of Anthropic's more advanced models, such as Mythos, have raised cybersecurity concerns over their ability to target weaknesses in computer systems.
[7]
The AI Cold War Just Got Chillier
As the newly crowned most valuable startup in the world and the maker of what are widely considered to be the most capable AI systems, Anthropic has a delicate line to tow as it comes of age under an administration known for picking fights both at home and abroad. If it wants to keep releasing industry-leading AI models, it'll have to do so -- at least for the time being -- on the federal government's own terms. That apparently includes keeping a wary eye out for Chinese abuses, even if that has to be implemented through inconspicuous spyware. Earlier this week, complaints started surfacing on Reddit about a mechanism embedded within Claude Code, which appeared to covertly flag users based in China (or with ties to Chinese AI labs) by detecting telltale signs like timezone and the use of proxy URLs. One Redditor made the case that by surreptitiously keeping tabs on Chinese users, Anthropic could ultimately use its spyware towards more malicious ends. "Today it's a timezone check," the Redditor wrote. "Tomorrow, it could be system sabotage or data exfiltration." Anthropic's response to this was basically: oopsie-daisy! In an X post on Tuesday night, Thariq Shihipar, a member of Anthropic's technical staff working on Claude Code, said the spyware was "an experiment we launched in March that was meant to prevent account abuse from unauthorized resellers and protect against distillation," that the company had "been meaning to take [the spyware] down for a while," and that it "should be fully rolled back" in the redeployment of Fable 5, which arrived Tuesday. Anthropic didn't immediately respond to a request to share more details around the timeline and purpose of the program. China has long been a thorn in Anthropic's side. The company has accused multiple leading Chinese AI labs, including DeepSeek, Moonshot, MiniMax, and, most recently, Alibaba, of illicitly using Claude to train new AI models, a process known in the industry as distillation. While distillation is a common and usually harmless practice that enables smaller companies to train new models using bigger counterparts like Claude and ChatGPT, it's recently emerged as a tender spot in the AI arms race between the U.S. and China. The White House has vowed to crack down on what it's described as "coordinated campaigns [that] systematically extract capabilities from American AI models, exploiting American expertise and innovation." Yesterday's long-awaited rerelease of Fable 5 was both an end and a beginning. On the one hand, it seemed to conclude Anthropic's latest fiasco with the Trump administration, which began early last month with an order from U.S. Commerce Secretary Howard Lutnick to take the model offline for all "foreign persons." Citing national security risks -- clearly with an eye towards China -- Lutnick's order was motivated in part by research from Amazon, which supposedly showed that Fable's robust security guardrails could be jailbroken, i.e., bypassed through creative prompting. But the announcement also heralded what could be a new norm of collaboration between the federal government and the AI sector. In its announcement, Anthropic confirmed that the alleged jailbreak reported by Amazon was, for the most part, no more than the identification of cybersecurity vulnerabilities that a litany of earlier, less powerful versions of Claude also could've detected. There was one instance cited in Amazon's report in which Fable went so far as to produce code showing how a particular security flaw could be exploited, but according to Anthropic, several other models, including OpenAI's GPT-5.5 and Moonshot's Kimi-K2.7, were able to do the same thing. In short, Anthropic said its being targeted by the federal government was completely groundless, at least as far as national security is concerned. Its inclusion of Kimi-K2.7 in its internal jailbreaking tests is significant, since it lends support to the claim made by many cybersecurity experts that the federal ban on Anthropic's top models benefits no one as much as the Chinese AI industry, which for years has been making a big push into open source models. Even before the Fable/Mythos ban, those open source alternatives had big appeal among American developers and businesses who had become disenchanted with the climbing costs of homegrown AI tools like Claude Code and OpenAI's Codex. On the whole, however, Anthropic's announcement was more conciliatory than defensive. The general tone was: We don't believe we did anything to deserve this, but if it's all the same, we want to work with the federal government, and also with our competitors throughout the tech industry -- looking at you, Amazon -- to make sure this kind of debacle doesn't needlessly happen either to us or anyone else again. The company said it was teaming up with several leading tech companies and other Project Glasswing partner organizations "to draft a consensus framework for assessing the severity of AI jailbreaks and how AI developers should respond to them." It provided some preliminary criteria that such a framework ought to measure -- including "ease of weaponization" -- and said it had delegated an internal team to monitor jailbreaking developments 24/7. The announcement also included some carefully-worded caveats about what Anthropic's relationship with the federal government would look like moving forward, including working "toward a shared, voluntary security and evaluation standard for frontier model providers." As always, even though it was never explicitly mentioned, the spectre of China hovered over Anthropic's announcement. The company has long painted itself as the conscience of the AI industry, a counterweight to the market forces that might otherwise compel Silicon Valley to turn a blind eye to the risks of the new technological revolution now underway. At the same time, it often echoes the party line of the Trump administration and its biggest competitor, OpenAI, by insisting that the U.S. has a moral obligation to be the global leader in AI development, because if we don't step up, the argument goes, China will. That binary framing -- either us or China -- was very much at play behind the company's recent call for an AI international committee to monitor, and if necessary, put the brakes on, frontier AI progress. Anthropic CEO Dario Amodei has also often pontificated on the need for cooperation between the American and Chinese AI industries, possibly modeled after Cold War-era nuclear non-proliferation treaties. Such cooperation is no doubt possible, but it's much less likely under the current administration. Launching covert spyware targeting users in China probably doesn't help, either.
[8]
Anthropic accuses Alibaba of running largest distillation campaign against Claude
Anthropic accused Alibaba's Qwen lab of using 25,000 fake accounts for nearly 29 million Claude exchanges, the biggest such campaign yet. Anthropic has accused Alibaba of waging the largest distillation campaign yet against a US AI company, telling senators and White House officials that operators linked to Alibaba's Qwen AI lab used nearly 25,000 fraudulent accounts to extract Claude's capabilities between April and June. The letter, a copy of which was seen by Bloomberg, described nearly 29 million exchanges with Claude targeting software engineering and agentic reasoning, the model's most commercially valuable skills. The accusation marks the first time Anthropic has named a major Chinese technology conglomerate as the source of a distillation attack. Previous allegations in February targeted smaller Chinese AI startups, including DeepSeek, MiniMax, and Moonshot AI, which Anthropic said had collectively generated more than 16 million exchanges through about 24,000 fake accounts. The Alibaba campaign alone exceeded the combined volume of all three earlier efforts. Distillation is the practice of feeding carefully constructed queries to a frontier AI model, collecting its responses, and using those responses to train a cheaper rival system that approximates the original's capabilities. The White House flagged the technique as a national security concern in April, when OSTP Director Michael Kratsios published a memo committing the government to share intelligence with US AI labs about foreign distillation campaigns. Anthropic said in its letter that the Alibaba campaign took place after the Kratsios memo, in defiance of the administration's warnings. Alibaba had no comment on the allegations. An Anthropic spokesperson declined to discuss specifics but emphasised the importance of combating distillation through coordinated action between government and industry. Alibaba's American depositary receipts fell more than three percent on the news, dropping below $100 in afternoon trading on Wednesday. The stock decline adds to a difficult period for the company in Washington, where it faces pressure on multiple fronts. The Pentagon added Alibaba to its Chinese military companies blacklist on 8 June, a designation Anthropic cited in its letter. Alibaba sued the Defense Department this week to win removal from that list, calling the label baseless and arguing it has no military affiliation. The distillation accusation now opens a second front, framing Alibaba not just as a company with alleged military ties but as an active participant in what Anthropic calls the systematic theft of American AI capabilities. In its letter, Anthropic warned that adversarial distillation lets Chinese labs replicate frontier AI at a fraction of the training cost, and that models built this way often lack safety guardrails. The company urged the Trump administration to clarify antitrust guidelines so US labs can share more information about distillation attempts, reiterated its support for export controls on advanced AI chips, and called for penalties against firms that use the technique. Lawmakers are moving in parallel. Senators Bill Hagerty and Andy Kim plan to introduce an amendment to must-pass defence legislation that would blacklist or sanction any Chinese firm found to be improperly accessing US AI model output. A related bipartisan bill in the House, backed by Representatives Bill Huizenga and Sydney Kamlager-Dove, is also being considered, though whether either proposal survives to the final version of the defence bill is uncertain. The timing is sensitive for Anthropic as well. The company, now valued at $965bn after a $65bn Series H round, filed confidentially for an IPO this month and is preparing for a listing that could come as soon as this autumn. US officials have estimated that unauthorised distillation costs Silicon Valley labs billions of dollars, and the threat of cheaper imitation products from China that siphon away customers is a material risk for a company heading to public markets. Anthropic's calls for government support may not find a fully receptive audience, given that the company is embroiled in a separate dispute with the Trump administration over export controls imposed on its Fable 5 and Mythos 5 models less than two weeks ago. Commerce Secretary Howard Lutnick signed an order blocking foreign nationals from accessing those models, citing security concerns, and Anthropic disabled them to comply. Even after meetings between the company's technical staff and White House officials, little progress has been made to restore service. The result is a company caught between two fronts of its own. Anthropic needs the government to crack down on Chinese labs extracting its technology, but it is simultaneously fighting the same government's decision to restrict its own products. The letter to senators is an attempt to separate the two issues, arguing that protecting US models from distillation and allowing those models to be deployed commercially are complementary rather than contradictory goals. Whether Washington agrees will shape both the regulatory environment for US AI companies and the competitive dynamics of the industry's most consequential rivalry. Anthropic has now named four Chinese labs as distillers of its technology, with the Alibaba accusation by far the largest in scale. If the legislative proposals gain traction, the consequences could extend well beyond Anthropic's models to the broader question of how the US enforces an intellectual property border around AI systems that exist as software, not hardware, and that can be copied over the internet through nothing more than a well-crafted prompt.
[9]
Anthropic accuses Alibaba of copying Claude by asking it millions of questions -- and sets the stage for a new AI war
Anthropic has accused groups linked to Alibaba and its Qwen AI lab of carrying out a massive campaign to extract capabilities from Claude just by asking it a lot of questions, as first reported by Reuters. The AI developer wrote a letter to U.S. lawmakers alleging that Alibaba used nearly 25,000 fraudulent accounts to generate more than 28.8 million interactions and glean detailed, proprietary information about Claude. Alibaba has not publicly responded to the allegations, and there has been no independent confirmation of Anthropic's claims, but simply leveling them has potentially enormous consequences. The sheer volume of accounts and interactions is eye-catching, but it's even more fascinating how it reveals a vulnerability in AI models that can give away their secrets. AI developers may now have to worry that rivals can learn from those models without ever seeing the underlying code or training data through a technique known as model distillation. Essentially, AI models will inadvertently share deliberately obscured facts about themselves if a huge number of the right questions are asked. As an analogy, imagine taking a test about a book, but instead of reading the book, you ask the author one million questions about their life, their thinking, their experience writing the book, and several hundred thousand more questions. You'd probably have a pretty good chance of knowing everything they might have written without once cracking the covers. Can you copy an AI just by talking to it? Model distillation is a common technique used by AI companies to build variations of their models, especially smaller, faster options. But no company would be okay with a rival using their model to train the competition. But that's what Anthropic alleges. The fake accounts supposedly asked Claude a ton of very complex and detailed questions related to its advanced software engineering and agentic reasoning features. The responses filled in a picture of the model's workings, accelerating Alibaba's own development of competing AI systems, Anthropic claimed. The conundrum is obvious. Large language models are designed to answer questions. Every answer teaches the user something about how the model behaves. You can't interact with an AI model, or a person, without giving up some information about yourself. Normally, that wouldn't matter, but at the scale Anthropic is claiming, conversations become reverse engineering. It's not the first time Anthropic has alleged illicit model distillation. Anthropic levied similar claims against DeepSeek, Moonshot AI, and MiniMax earlier this year. And other companies, including OpenAI, have expressed concern that they have also been victims of the technique. The glaring irony that the companies that used enormous collections of publicly available information, including licensed material, to train their AI models are now arguing about how those same models are valuable intellectual property is hard to ignore. AI arms race AI developers see their models' behavior as crucial to competing with rivals. If another company can reproduce much of that behavior by asking enough carefully designed questions, spending billions of dollars training frontier models starts to seem like a waste. Anthropic claims model distillation can effectively transfer years of work on their part to another company for almost nothing. Anthropic asked lawmakers to take action and combat this problem as soon as possible. If leading models can be imitated so easily, there won't be much incentive to innovate, and the AI competition will only be about beating copycats. And picking the best models will be difficult, as a new AI model that matches an existing one's capabilities might be born of years of original research or simply copying an existing option. Whether Anthropic ultimately proves its allegations, they have revealed that the next great AI battle may not be about building the smartest model. It may be about stopping somebody else from talking to your model and learning how it operates, one question at a time. Follow TechRadar on Google News and add us as a preferred source to get our expert news, reviews, and opinion in your feeds.
[10]
Anthropic's Alibaba fight raises a trillion-dollar question for IPO: How defensible is a frontier AI moat against China with Washington's toolbox? | Fortune
Anthropic has alleged Alibaba found a cheaper way to close the already narrowing AI gap: Not by stealing servers or smuggling chips, but by using fake accounts and innocuous interactions with Claude to extract its capabilities and train competing systems at a fraction of the cost. Leading IPO expert Jay Ritter told Fortune that Alibaba's distillation could either strengthen Anthropic's IPO story by positioning the company as strategic in the U.S-China rivalry or lead investors to question Anthropic's future profitability if its frontier AI moat isn't defensible. "Both points of view have merit, but I think that second point about affecting profitability would be the dominant one," he said. "Right now the growth rate of Anthropic's revenue has been incredible, but how much they'll be able to sustain that is a big question mark." Now Anthropic is turning to Washington for help, with Sarah Heck, Anthropic's head of policy, urging Congress to penalize China's behavior through "export controls on advanced American compute." For now, the federal government can't meaningfully undo the potential damage to Anthropic's competitive edge through export controls, which are designed to restrict hardware like chips and foreign access to tangible software like Mythos and Fable, but are powerless against the kind of distillation attack Anthropic is alleging. "Querying it through an API is not exporting the model, and that's what the latest controversy has been about," Kevin Wolf, a former assistant secretary of commerce for export administration, told Fortune. But the Trump administration denounced unauthorized distillation in an April memo that called the alleged efforts of Chinese companies to distill U.S. frontier models "unacceptable." And with the momentum of Anthropic's new allegations against Alibaba, reviving the idea of updating export controls to better protect U.S companies is on the table, Wolf added. He mentioned the Remote Access Security Act introduced last year by Rep. Michael Lawler, R-New York, as an example. It's sitting in committee now, but with more potential to move forward after Anthropic's request for better export controls on advanced AI. The bill would crack down on foreign entities like China accessing U.S. tech on a "purposeful, knowing, reckless, or negligent basis" through a cloud computing service if "the use of the item could pose a serious risk" to national security. Lawler told Fortune in a statement that Anthropic's capabilities must not fall into the hands of China and "other bad actors." "Dangerously, that's exactly what's happening right now with Alibaba. The sad part is that we knew this was going to happen," he added. "I've been working on my Remote Access Security Act for years to close one of the loopholes in our export control laws that allows our adversaries to access sensitive technology through the cloud." If passed, this bill would apply export controls and fill the void of a Biden-era framework preventing China from accessing AI cloud compute and model weights, rescinded by Trump a few days before it was supposed to go into effect. Meanwhile, if Alibaba's AI lab has indeed copied Anthropic, it could actually prove Claude's value as the original and not concern investors that much about profit, according to Harrison Rolfes, a senior research analyst for private companies at PitchBook, who used an analogy of investors looking at used cars versus new ones. "They probably want the brand new car that has all the bells and whistles and tech involved, even though it's a little bit more expensive," Rolfes told Fortune. "If an enterprise is worried about cost, then yes, they can go get a cheaper model, like a Chinese model, but it's not at a point yet where these enterprises trust using those models, especially U.S. companies." That could bolster Anthropic's appeal to investors ahead of a highly anticipated IPO later this year that could value the company at $1 trillion. But by calling on the government for help, Anthropic also faces a balancing act to make sure there's enough regulation to protect the company's edge over China but prevent overregulation that might hamper its business, according to Rolfes. "Right now they want to play it safe by just saying 'hey, we are on your side, and we want to IPO' and the moment they can IPO, they don't have to worry as much with what the government says, they can just let the public decide," he said.
[11]
Anthropic Urges Congress to Crack Down on AI Distillation By Chinese Rivals
The letter comes as lawmakers consider legislation targeting unauthorized access to U.S. frontier AI models. Anthropic is calling on Congress to strengthen protections against AI model distillation after claiming that Alibaba-affiliated operators carried out the largest known effort to extract capabilities from its Claude chatbot. In a June 10 letter to Senate Banking, Housing, and Urban Affairs Committee Chairman Tim Scott and Ranking Member Elizabeth Warren, Anthropic alleged that operators affiliated with Alibaba and its Qwen AI lab generated more than 28.8 million exchanges with Claude between April 22 and June 5 using nearly 25,000 "fraudulent accounts," or those not representing real, organic users. Known as a distillation attack, Anthropic said the operations targeted Claude's agentic reasoning, software engineering, and long-horizon planning capabilities, allowing competitors to reproduce advanced model behavior without the cost of training a frontier AI system. "Beyond its scale, this campaign was striking for its brazen nature," Anthropic wrote. "Alibaba is listed on the New York Stock Exchange, maintains business operations in the United States, and is accountable to U.S. investors and regulators." Anthropic said the campaign went beyond intellectual property concerns, framing large-scale model distillation as a national security issue that could accelerate China's military and cyber AI capabilities while narrowing the United States' technological lead. The letter comes as Washington intensifies efforts to protect U.S. AI leadership. Earlier this month, President Donald Trump signed an executive order expanding AI-powered cybersecurity initiatives after delaying the measure over concerns it could weaken America's competitive position against China. "When PRC labs distill these capabilities from U.S. models, they capture the returns on American investments without bearing the costs or risks associated with training frontier AI models," Anthropic wrote. "This inverts the economic logic that underwrites American AI leadership, turning billions of dollars' worth of research and development, compute, and other U.S. investments into a subsidy for our competitors." Anthropic urged lawmakers to expand intelligence sharing between frontier AI developers and the U.S. government, clarify antitrust rules to allow AI companies to share information about distillation attacks, strengthen export controls on advanced AI chips and compute, close loopholes that allow Chinese firms to access overseas data centers, and impose penalties on companies responsible for large-scale model extraction. A spokesperson for Anthropic declined to comment specifically on the letter, but told Decrypt, "We believe combating the threat of illicit distillation requires coordinated action between government and industry, and we will continue working with Congress and the administration to maintain American AI leadership." The letter also builds on Anthropic's claims in February that Chinese AI developers DeepSeek, Moonshot AI, and MiniMax generated more than 16 million Claude exchanges using roughly 24,000 fraudulent accounts. Those allegations drew criticism from observers who argued that AI companies rely on similar techniques when training their own systems. Anthropic has countered that conventional distillation is a legitimate method for producing smaller, cheaper models, while unauthorized extraction of frontier model capabilities through fraudulent access violates its terms of service. The broader debate over distillation has become more complicated in recent months. In April, Elon Musk testified in federal court that xAI had "partly" used OpenAI models while training Grok, underscoring that distillation is an established industry practice -- even as companies dispute where legitimate model training ends and unauthorized model extraction begins.
[12]
Anthropic: Anthropic says Alibaba illicitly extracted Claude AI model capabilities
Anthropic said in the letter that distillation is a way to help accelerate China's ability to reach Anthropic's advanced Mythos Preview capabilities. U.S. AI company Anthropic accused Alibaba, the Chinese technology and e-commerce giant, of illicitly extracting its Claude AI model capabilities in what it said was the largest known attack of its kind on the company, according to a letter seen by Reuters. The strike by Alibaba is described as a "distillation" effort, which Anthropic has said involves training a less capable model on the outputs of a stronger one. Anthropic said the campaign was conducted between April 22 and June 5, 2026, and generated more than 28.8 million exchanges with Claude through almost 25,000 fraudulent accounts. Anthropic said in the letter that distillation is a way to help accelerate China's ability to reach Anthropic's advanced Mythos Preview capabilities. It said the campaign was conducted by operators affiliated with Alibaba and Alibaba Qwen, Alibaba's AI lab. Alibaba did not immediately respond to a request for comment. The letter, dated June 10, was sent to Senators Tim Scott and Elizabeth Warren, the chair and ranking member, respectively, of the U.S. Senate Banking Committee, ahead of a scheduled hearing on AI. In April, the White House accused China of stealing U.S. AI labs' intellectual property on an industrial scale. Anthropic said in the letter it was supportive of the U.S. government's efforts to combat the attacks, including partnering with private sector AI companies through threat-intelligence sharing and other exercises. Anthropic said in a February posting that it had identified a campaign by Chinese AI startup DeepSeek - whose low-cost AI model sent shockwaves through the technology world in January 2025 - and two other Chinese AI labs to illicitly extract capabilities from its Claude AI platform. It said DeepSeek's operation involved over 150,000 exchanges, while Moonshot AI was at a scale of over 3.4 million and MiniMax over 13 million. It also said at the time that the campaigns were growing in "intensity and sophistication" and that addressing the threat would require "rapid, coordinated action among industry players, policymakers and the global AI community." Alibaba was added to the Pentagon's Chinese military companies list this month, a designation it is challenging. But the Commerce Department has held off placing DeepSeek on a trade blacklist, as Reuters exclusively reported this month, despite it being deemed a national security risk by an interagency governmental committee, as the department tries to avoid escalating tensions with Beijing. Meanwhile, on June 12, two days after Anthropic sent the letter, the Commerce Department imposed controversial restrictions on Anthropic's latest Mythos and Fable AI models because officials feared they could be deployed by military intelligence users in China and other countries of concern. The restrictions resulted in Anthropic disabling access to the models globally. (Reporting by Karen Freifeld; additional reporting by David Shepardson; Editing by Sonali Paul)
[13]
Alibaba Stock In The Spotlight After Anthropic Accuses Chinese Giant of Harvesting 28.8 Million Claude Co
Alibaba Group Holding Ltd. (NYSE:BABA) is in the spotlight Thursday after Anthropic accused the Chinese tech giant of orchestrating a large-scale campaign to extract capabilities from its Claude AI models. The Allegation According to a letter reviewed by Reuters, Anthropic wrote to U.S. lawmakers -- including Senator Elizabeth Warren and Senator Tim Scott -- alleging that operators affiliated with Alibaba and its AI research unit, Qwen, conducted a large-scale "distillation" campaign between April 22 and June 5, 2026. Distillation refers to the practice of training a smaller or less advanced AI model using outputs generated by a more capable system. Anthropic alleged the effort relied on nearly 25,000 fraudulent accounts that collectively produced more than 28.8 million exchanges with Claude. The company claimed the campaign was aimed at accelerating China's ability to develop AI systems approaching the capabilities of Anthropic's advanced Mythos Preview models. Alibaba and Anthropic did not immediately respond to requests for comment. Alibaba Shares Edge Lower BABA Price Action: At the time of publication, Alibaba shares are trading 2.79% lower at $97.01, according to data from Benzinga Pro. Image via Shutterstock This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.
[14]
Anthropic accuses Alibaba of 'illicitly' accessing AI models
Anthropic accused Chinese technology giant Alibaba Group Holding of waging a large-scale effort to "illicitly" access its Claude artificial intelligence model using thousands of fraudulent accounts that undermine the U.S. AI developer's decision to keep its products out of China. Anthropic claimed that a campaign by operators linked to Alibaba's Qwen AI lab targeted Claude's most prized capabilities, including software engineering and agentic reasoning, according to a letter that the AI startup sent to several U.S. senators and White House officials. The company said it was the biggest attempt so far by a Chinese company to piggyback on the work of top U.S. labs. In its letter, Anthropic claimed that the effort involved 28.8 million exchanges with Claude between April and June through almost 25,000 fraudulent accounts, according to people familiar with the document and a copy seen by Bloomberg News. The company said the Alibaba campaign resembled past efforts by other Chinese developers that Anthropic flagged in a blog post earlier this year. Alibaba's American depositary receipts sank to a session low on the news, falling more than 3% to $99.10 at 3:38 p.m. in New York on Wednesday. Anthropic warned that Alibaba and other Chinese labs are making systematic and unauthorized use of results from leading U.S. models to develop a rival generation of chatbots at a fraction of the cost via a practice known as adversarial distillation. It cautioned that AI systems built using this method often lack safety guardrails, and the firm urged the Trump administration to step up efforts to halt the practice. "These distillation attacks are carried out illicitly, systematically, and at industrial scale to harvest U.S. Al capabilities across frontier labs and repackage them as their own without incurring the training and R&D costs required to train U.S. frontier models," Anthropic wrote in its letter. Alibaba had no comment. An Anthropic spokesperson declined to enter into specifics on the letter but emphasized the importance of combating distillation through "coordinated action between government and industry." Anthropic's letter marked the latest call from top American AI companies to rein in some kinds of distillation, where developers train systems using results from another AI model to create similar capabilities in a new one at a far lower cost. While tolerated for training smaller, less-advanced systems, distillation violates AI labs' terms of use when it's employed to replicate a cutting-edge AI model without permission. The practice has alarmed U.S. developers to the point that Anthropic, OpenAI and Alphabet's Google have joined forces to share information about distillation attempts that violate their terms of service. Anthropic and OpenAI have each warned that Chinese AI startups, including DeepSeek and Minimax, have employed distillation to develop their own models.
[15]
Anthropic Accuses Alibaba Of Running 29 Million Fake Queries to Clone Claude | PYMNTS.com
Anthropic accused operators affiliated with Alibaba and its AI lab of conducting the largest known distillation campaign against its Claude models to date, CNBC reported. The alleged operation ran from April 22 to June 5 and generated more than 28.8 million interactions with Claude through roughly 25,000 fraudulent accounts. The scale puts the alleged campaign in a different category from what came before. In February, Anthropic named three Chinese AI labs -- DeepSeek, Moonshot AI and MiniMax -- as having collectively generated more than 16 million Claude interactions through roughly 24,000 fraudulent accounts in a February blog post. The alleged Alibaba campaign dwarfs that combined total in just six weeks. How 25,000 Fake Accounts Extracted Claude's Core Intelligence The way distillation works is simple. A campaign sends large volumes of carefully designed prompts to a target model and captures its responses. Those responses become training data. The competing model learns to reason and respond in ways that replicate the original, without paying for the research behind it. It is less like hacking a system and more like sitting next to the best student in class and copying every answer they write, at industrial scale. Detection is hard. A distillation query looks identical to a legitimate one. A developer asking Claude to help debug a function and a campaign systematically extracting Claude's coding behavior send the same kind of request. The only signal is pattern: massive volume, repetitive structures and prompts targeting the same narrow capabilities, arriving from hundreds of coordinated accounts in sequence. "As organizations increasingly integrate LLMs into their core operations, the proprietary logic and specialized training of these models have emerged as high-value targets," Google's Threat Intelligence Group warned in a February blog post, PYMNTS reported. There is a safety dimension beyond the commercial one. When a lab distills a frontier model without permission, the copy does not inherit the safety guardrails built into the original. The dangerous capabilities transfer through the outputs. The months spent making the model refuse harmful requests do not. Distillation itself is a legitimate and widely used technique. Companies routinely use it to compress their own large models into smaller, faster versions that run more cheaply. The line Anthropic is drawing is between using it on your own models, which is standard practice, and using it on a competitor's model without permission. Anthropic Wants Congress to Make Model Theft Illegal In a letter to senators, Anthropic's Head of Policy Sarah Heck said the attacks were carried out "illicitly, systematically, and at industrial scale to harvest U.S. AI capabilities across frontier labs and repackage them as their own without incurring the training and R&D costs," Business Insider reported. House Republicans are seeking sanctions on Chinese companies that copy American-made AI models, PYMNTS reported. Sen. Bill Hagerty and Sen. Andy Kim are moving to add an amendment to defense legislation that would blacklist or sanction entities found conducting such campaigns, according to CNBC. The White House Office of Science and Technology Policy issued a memorandum in April warning of industrial-scale foreign distillation of U.S. AI models. The structural problem goes beyond any single campaign. A distillation query is indistinguishable from a legitimate one. The only way to fully close the gap is to restrict who can access the model. That conflicts directly with the commercial logic of selling AI as a service. If adversarial distillation becomes routine, AI labs may find themselves spending as much on access controls and identity verification as they do on training, treating every API call as a potential intelligence transfer rather than a revenue event.
[16]
Anthropic Writes To Elizabeth Warren, Tim Scott, Accuses Alibaba Of AI Model Theft: 28.8 Million Claude C
Anthropic has accused Chinese technology giant Alibaba Group Holding Ltd. (NYSE:BABA) of extracting capabilities from its Claude AI models. Anthropic Alleges Large-Scale AI Distillation Campaign Linked To Alibaba According to a letter reviewed by Reuters on Wednesday, Anthropic told U.S. lawmakers that operators affiliated with Alibaba and its AI research unit, Qwen, conducted a large-scale "distillation" campaign between April 22 and June 5, 2026. Distillation refers to the practice of training a smaller or less advanced AI model using outputs generated by a more capable system. Anthropic alleged that the effort relied on nearly 25,000 fraudulent accounts that collectively produced more than 28.8 million exchanges with Claude. The company claimed the campaign was aimed at accelerating China's ability to develop systems approaching the capabilities of Anthropic's advanced Mythos Preview models. Alibaba and Anthropic did not immediately respond to Benzinga's request for comments. AI Competition Between US And China Draws Greater Scrutiny The June 10 letter was sent to Senate Banking Committee Chair Tim Scott (R-S.C.) and ranking member Elizabeth Warren (D-Mass.) ahead of a congressional hearing on artificial intelligence. The allegations come amid heightened tensions over AI competition between the U.S. and China. In April, the White House accused China of systematically targeting intellectual property from leading American AI companies. Anthropic Previously Flagged Similar Activity From Chinese AI Labs The company said it had previously identified alleged capability-extraction campaigns involving Chinese AI firms DeepSeek, Moonshot AI and MiniMax. Anthropic reported that those efforts generated more than 150,000, 3.4 million and 13 million Claude interactions, respectively, making the alleged Alibaba operation significantly larger. The allegations surfaced as U.S. regulators continue to tighten controls on advanced AI technology. Previously, it was reported that the Commerce Department imposed restrictions on Anthropic's latest Mythos and Fable models over concerns they could be accessed by military or intelligence users in China and other countries of concern. Price Action: Alibaba closed Wednesday's session down 2.73% at $99.80 and edged up 0.35% to $100.15 in after-hours trading, according to Benzinga Pro. Benzinga Edge Rankings place Alibaba stock in the 94th percentile for Value, though the shares have posted negative price trends across the short, medium and long-term time frames. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo Courtesy: Algi Febri Sugita on Shutterstock.com Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.
[17]
Anthropic Asks Washington to Stop Chinese Companies' AI Model Theft | PYMNTS.com
The American AI company said this in a letter that it sent to several U.S. senators and White House officials, Bloomberg reported Wednesday (June 24), citing a copy of the letter. An Anthropic spokesperson declined to discuss the reported letter with Bloomberg but said there is a need for "coordinated action between government and industry" to combat distillation, a process in which developers use results from another AI model to train their own model at a far lower cost, according to the report. Alibaba declined Bloomberg's request for comment, according to the report. The company did not immediately reply to PYMNTS' request for comment. According to the Bloomberg report, Anthropic said in its letter that Alibaba's Qwen AI lab used 25,000 fraudulent accounts to illicitly access its Claude AI model, engage in 28.8 million exchanges with the model, and use the information they garner to develop rival chatbots through adversarial distillation. The company said that AI models developed through this process lack the guardrails that Anthropic puts on its own models, and that distillation poses a threat to national security because it could enable China to reduce America's lead in AI, per the report. Anthropic also asked the senators and official to whom it sent the letter to clarify antitrust guidelines to allow U.S. companies to share information about distillation, to support export controls on advanced AI chips, and to penalize firms that use distillation, according to the report. Anthropic said in a February blog post that Chinese AI labs DeepSeek, MiniMax and Moonshot AI had used distillation and the outputs of Claude to train their own models. "These campaigns are growing in intensity and sophistication," Anthropic said in the post. "The window to act is narrow, and the threat extends beyond any single company or region. Addressing it will require rapid, coordinated action among industry players, policymakers and the global AI community." Google Threat Intelligence Group said in a Feb. 12 blog post that it had seen a growing incidence of distillation attacks or "model extraction attacks" and that a coding model, for example, "could be targeted by an adversary wishing to replicate capabilities in an environment without guardrails."
[18]
Anthropic accuses Alibaba of campaign to 'brazenly' and 'illicitly' rip off its AI capabilities
Anthropic accused the Chinese tech giant Alibaba of "brazenly" and "illicitly" trying to extract its artificial intelligence capabilities - carrying out "the largest known distillation attack on Anthropic to date." Anthropic detailed the alleged violation of its terms in a letter it sent to the Senate Committee on Banking, Housing and Urban Affairs earlier this month, Bloomberg reported. The act Anthropic imputed to Alibaba -- distillation -- is an AI training method in which a small, less capable model is built using outputs from an existing, more sophisticated model. Dario Amodei-led Anthropic wrote that operators affiliated with Alibaba and its Qwen AI lab conducted 28.8 million exchanges with its Claude models using about 25,000 fake accounts between April 22 and June 5, according to Bloomberg. "We believe combating the threat of illicit distillation requires coordinated action between government and industry, and we will continue working with Congress and the Administration to maintain American AI leadership," an Anthropic spokesperson said in a statement. Alibaba didn't immediately respond to The Post's request for comment. Anthropic's letter, addressed to Sens. Tim Scott (R-SC) and Elizabeth Warren (D-Mass.), came less than two months after the White House Office of Science and Technology Policy issued a memorandum pledging to assist AI companies in detecting and coordinating against mass distillation. Alibaba "ignored the Trump Administration's warnings," Anthropic claimed in its missive. A flood of powerful, cheap-to-use Chinese AI models have been winning over U.S. customers - and experts are warning that America's lead in the field could be in danger. One new open-source model, dubbed GLM-5.2, was released by China's z.AI on June 16 and specializes in coding projects. The company claims that GLM-5.2 is about as advanced as some of the best models offered by Anthropic, OpenAI and Google. Anthropic said in February that it had identified three "industrial-scale" distillation campaigns from three other Chinese AI labs: DeepSeek, Moonshot and MiniMax. Anthropic claimed the campaigns were becoming more sophisticated and intense. It also encouraged policymakers and other tech firms like cloud providers to collaborate to thwart future attacks. Recent weeks have seen Anthropic repeatedly clash with the White House, whoever. In the latest twist, the Trump administration launched a crackdown on the company's powerful "Fable" and "Mythos" models, prompting Anthropic to scramble to resolve security concerns.
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Anthropic has accused Alibaba of orchestrating the largest known distillation attack against its Claude AI models, using nearly 25,000 fraudulent accounts to generate 28.8 million exchanges between April and June 2026. The US AI company claims the Chinese tech giant brazenly defied Trump administration warnings to illicitly extract valuable AI capabilities without incurring training costs.
Anthropic has leveled serious accusations against Alibaba, claiming the Chinese tech giant conducted the largest known distillation attack on its Claude AI models to date. According to a June 10 letter sent to Senators Tim Scott and Elizabeth Warren of the Senate Banking Committee, operators affiliated with Alibaba and Qwen, Alibaba's AI lab, generated more than 28.8 million exchanges with Claude through almost 25,000 fraudulent accounts between April 22 and June 5, 2026
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. The letter arrived one day ahead of a Senate committee hearing on "AI and the American Dream," where the US AI company shared what it described as "new, confidential evidence" of this massive model extraction campaign1
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Source: Benzinga
The campaign specifically targeted some of Claude's most valuable capabilities, including agentic reasoning, software engineering, and long-horizon tasks, according to Anthropic's allegations
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. Distillation attacks represent a method where Chinese AI competitors train less capable models on outputs from stronger ones, allowing them to illicitly extract AI capabilities without incurring the substantial training and R&D costs required to develop frontier models independently3
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. Alibaba allegedly evaded detection by deploying obfuscation techniques and proxy networks, contributing to what Anthropic warns is "a growing circumvention economy" designed to fuel an expanding web of future model theft attempts1
.What makes this incident particularly significant is its timing. The Alibaba campaign unfolded after President Donald Trump took steps to curb illicit distillation attacks and defend US national security. In April, Trump accused China of "industrial-scale" AI theft following Anthropic's earlier report that Chinese firms DeepSeek, Moonshot, and MiniMax had used similar tactics to generate over 16 million exchanges with Claude through approximately 24,000 fraudulent accounts
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. Anthropic accused Alibaba of "brazenly" racing to create a copycat Claude, seemingly unfazed by Trump's threats despite the company's dependence on US investors1
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. The company noted that Alibaba is listed on the New York Stock Exchange, maintains business operations in the United States, and is accountable to US investors and regulators, yet this activity continued in the weeks after Trump's memo warned that cloning attempts were "unacceptable"1
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Source: Benzinga
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In response to the escalating threat, Anthropic had implemented hidden defenses within Claude Code several months prior to detect unauthorized usage. According to engineer Thariq Shihipar, the company launched an experiment in March using steganography—hiding secret data in plain sight—to catch account abuse from unauthorized resellers and protect against distillation
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. The covert code checked Claude Code's base URL, system timezone, and whether hostnames matched entries in a list of known Chinese AI labs, other AI companies, account resellers, and gateway domains2
. However, Anthropic announced plans to remove this hidden tracking mechanism on July 1, stating that "the team has landed stronger mitigations since then"2
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Source: Gizmodo
Anthropic warned that without stronger interventions, these attacks will help China reach advanced AI capabilities sooner, turning "hundreds of billions of dollars in American investment and R&D into a massive subsidy for our geopolitical competitors"
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. The company recommended Congress pass legislation with three key objectives: updating antitrust laws to allow AI firms to share information about evolving Chinese tactics, implementing stronger export controls on chips to limit Chinese access to advanced compute, and establishing penalties that make it more difficult and costly for Chinese labs to rely on distillation attacks1
. An Anthropic spokesperson emphasized that "combating the threat of illicit distillation requires coordinated action between government and industry"5
. Alibaba has not responded to requests for comment on the allegations, though the company filed a lawsuit Tuesday seeking to remove a Trump administration designation linking it to the Chinese military1
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