White House accuses Moonshot AI of cloning US tech as Treasury threatens sanctions
42 Sources
[1]
Treasury threatens sanctions after White House claims Moonshot distilled Anthropic's Fable
U.S. Treasury Secretary Scott Bessent doubled down on his warnings to Chinese AI companies on Wednesday, saying that sanctions remain on the table after a White House official accused Moonshot of improperly distilling Anthropic's Fable model. Model distillation is a common AI training technique in
[2]
China's AI models have Trump's AI world at war with itself
Kimi and other free models from China have again been seen as a wake-up call. But for what? This story originally appeared in The Algorithm, our weekly newsletter on AI. To get stories like this in your inbox first, sign up here. Over the weekend, several current and former advisors to President
[3]
Silicon Valley Is Completely Divided Over Chinese AI
A huge debate is brewing in Silicon Valley over the proliferation of Chinese-made artificial intelligence tools, particularly "open-weight" AI systems that, by some measures, can compete with or even outperform some of the best US models. My WIRED colleague Hugo Lowell has written about the Trump
[4]
US threatens sanctions against Chinese AI models over IP theft
On Tuesday, Treasury Secretary Scott Bessent said the U.S. would examine open source models from China for signs of intellectual property theft, threatening sanctions against Chinese AI companies if IP theft is established. "We've seen a lot of talk about open source models coming and threatening
[5]
White House: China's Kimi K3 AI Model Cheated by Cloning US Tech
China's new AI model, Kimi K3, has been making waves as the latest threat to US dominance in artificial intelligence. But according to the White House, the Chinese model is merely an unauthorized knock-off based on US tech. On Wednesday, Michael Kratsios, director of the White House Office of
[6]
Senior White House official claims China's K3 model stolen from Anthropic
Donald Trump's Assistant for Science and Technology, Michael Kratsios, has accused China's Moonshot AI of creating its head-turning Kimi K3 model distilling Anthropic's Fable. Kimi K3 is 2.8-trillion-parameter open-weights model of such impressive quality that its mere existence suggests Chinese
[7]
As AI grows more powerful, a US-China feud threatens safety efforts
BEIJING, July 24 (Reuters) - U.S. threats to sanction Chinese AI developers over alleged intellectual property theft and export-control violations risk unravelling efforts to establish a bilateral dialogue on AI safety, analysts say, just as increasingly powerful models raise concerns over serious
[8]
Moonshot AI accessed Nvidia's chips despite Chinese export ban, White House official says
It comes as the race for AI supremacy between the U.S. and China intensifies. A White House official has accused Chinese AI company Moonshot of accessing Nvidia's advanced chips, despite export controls banning them from doing so. Moonshot unveiled Kimi K3 on Friday. It closes the performance gap
[9]
China's Moonshot AI stole from Anthropic, Trump tech advisor says
A White House advisor has accused China's Moonshot AI of a "large scale" effort to steal the capabilities of top US artificial intelligence (AI) models. US President Donald Trump's Science and Technology advisor Michael Kratsios said Moonshot AI carried out the campaign through what is known as
[10]
Startups urge Trump not to ban Chinese open-weight AI
Nearly 200 US startups have told the Trump administration not to cut off access to Chinese open-weight AI, warning a ban would kill hundreds of them and hand the market to Anthropic and OpenAI. It is the first time Silicon Valley's little guys have organised against the industry's giants, and it
[11]
US Treasury Chief Threatens Sanctions on Chinese AI Labs Over 'IP Theft' Concerns
U.S. Treasury Secretary Scott Bessent has "the ability to sanction," and he is not afraid to use it. In an interview with Fox Business on Tuesday, Trump's Treasury chief said that Chinese open-source AI models should expect increased scrutiny from American authorities. Over the last few months,
[12]
US accuses China's Moonshot of stealing from Anthropic's Fable for latest AI model
WASHINGTON, July 22 (Reuters) - China's Moonshot AI stole from Anthropic's most sophisticated AI large language model, Fable, to help create its latest K3 release and has acquired advanced Nvidia AI chips, top Trump administration tech official Michael Kratsios said on Wednesday. "We have
[13]
Bessent says U.S. could sanction China over AI model 'theft'
U.S. Treasury Secretary Scott Bessent on Tuesday said the Trump administration will look into whether Chinese artificial intelligence models have been distilled from American models, stating that the government does not support "IP theft." Chinese open-weight models are gaining steam against
[14]
White House: Moonshot used banned Nvidia chips for Kimi K3
The accusation came in a social-media post from Michael Kratsios, the White House science director. Moonshot, he said, reached banned Nvidia chips in Thailand and distilled Anthropic's Fable model to build Kimi K3. Nvidia's own chief executive says the fix is to embrace Chinese AI, not ban it. The
[15]
The US is Concerned Over 'IP Theft' by Chinese AI Labs
U.S. Treasury Secretary Scott Bessent threatened to impose sanctions on Chinese AI firms deemed to have stolen intellectual property from American technology companies. "This administration supports open source models, but what we do not support is IP theft," Bessent said on Fox Business yesterday
[16]
Headaches for Silicon Valley as China chips away at the US's lead in the AI race
Google's AI struggles scream trouble as new Chinese models (again) throw US tech dominance into question Hello, I'm Blake Montgomery, writing to you after a double-header feature of Christopher Nolan's The Odyssey and the World Cup final. What a great Sunday. Today in tech, we're discussing how
[17]
The secret Trump administration battle to fight Chinese AI
Why it matters: Parts of the administration have tried to implement de facto bans on foreign open-source models before, knowledgeable sources tell Axios. Last week's rise of Chinese model Kimi is reigniting those efforts. Pro-competition voices fear the implications. * U.S. companies are
[18]
Scott Bessent warns China of sanctions over AI model theft
The Treasury secretary said the U.S. is finding watermarks of American large language models on Chinese AI systems Treasury Secretary Scott Bessent on Tuesday warned that the Trump administration could sanction Chinese artificial intelligence models if it finds they were built by stealing from
[19]
It's Official: AI Execs Are Quaking in Their Boots
Can't-miss innovations from the bleeding edge of science and tech A Chinese open-weight AI model called Kimi K3, developed by Beijing-based firm Moonshot AI, has sent a shiver down the spines of AI tech executives. The powerful, 2.8 trillion-parameter model impressed with its competence, igniting
[20]
The White House is dictating access to frontier AI models, shifting power from tech giants
The Trump administration has taken new steps to assert more control over the rollout of future artificial intelligence model releases by dictating which companies and entities are allowed access to the latest frontier models, two sources familiar with the matter told CNBC. Until now, that decision
[21]
Trump under pressure from all sides over Chinese AI surge
Washington (United States) (AFP) - US President Donald Trump is under pressure to respond to the increasing success of Chinese AI models that many companies prefer to the more powerful, but pricier, US versions from Anthropic or OpenAI. The issue came to the fore this week with the release of Kimi
[22]
New bill takes aim at Chinese AI companies accused of copying American tech
Sen. Adam Schiff, D-Calif., speaks at the Capitol on June 1.Anna Moneymaker / Getty Images file A bipartisan group of lawmakers said they were introducing legislation Thursday aimed at protecting American artificial intelligence companies like OpenAI and Anthropic from Chinese competitors. The
[23]
OpenAI's Brockman Says Kimi K3 Is 'Pretty Good,' Won't Confirm Distillation
Brockman called Kimi K3 "pretty good" but said it is too early to tell if Moonshot distilled from OpenAI, as the White House accused the startup of IP theft OpenAI president Greg Brockman called Moonshot AI's Kimi K3 "pretty good" in a Bloomberg interview on Tuesday, a rare public acknowledgement
[24]
Senior White House official accuses Moonshot AI of copying Anthropic's leading frontier model
A senior White House official has accused Chinese artificial intelligence startup Moonshot AI of using so-called "distillation" techniques to essentially pirate the capabilities of Anthropic PBC's most powerful models in its own, open-source AI systems. "We have information that Moonshot AI
[25]
US Accuses Moonshot AI of Covert Anthropic Model Distillation
US officials warn that Chinese firms conducting covert, industrial-scale AI distillation could face sanctions and export restrictions. A White House official accused Moonshot AI of distilling Anthropic's Fable AI model to develop Kimi K3, which launched last week. In a post on X on Wednesday,
[26]
White House accuses Moonshot of copying Anthropic AI
White House science advisor Michael Kratsios alleged that Moonshot, a Chinese firm, copied Anthropic's Fable large language model (LLM) to create the Kimi K3, which is the largest open-weight model currently available. Kratsios stated Moonshot's model utilized chips not authorized for export to
[27]
China says AI development comes from 'greater self-reliance and strength' amid stolen tech claims
China defended the country's development of artificial intelligence, stating it comes from "greater self-reliance and strength" after a top White House official accused a Chinese startup of improperly using Anthropic's latest model and accessing restricted Nvidia chips. Lin Jian, China's Foreign
[28]
U.S. Treasury Secretary Bessent threatens sanctions against Chinese AI model makers
U.S. Treasury Secretary Scott Bessent said today that the White House is going to examine some of the highest profile "open-weight" models from China to see if their creators have stolen the intellectual property of America's top artificial intelligence frontier labs. If evidence suggests that's
[29]
As AI grows more powerful, a US-China feud threatens safety efforts
US warnings of sanctions targeting Chinese AI companies could jeopardize critical safety conversations. The rise in allegations of intellectual property theft and breaches of export controls contributes to rising tensions. With advanced AI technologies posing serious security risks, both nations
[30]
White House official accuses Chinese startup of distilling Anthropic model, accessing banned Nvidia chips
A top White House official accused a Chinese startup on Wednesday of improperly using Anthropic's latest model and accessing restricted Nvidia chips to develop its new Kimi model. Michael Kratsios, the director of the White House Office of Science and Technology Policy, said the administration has
[31]
White House official says Moonshot accessed banned Nvidia chips
A White House official accused China's Moonshot of improperly using U.S. AI models and Nvidia chips to create the Kimi K3 system that stunned the tech industry last week with its advanced capabilities. The company "acquired GB300-equipped servers and has accessed GB300s in Thailand, likely to
[32]
Scott Bessent Says Open Source AI Not 'Open Season' on American Intellectual Property, Warns Chinese AI F
Treasury Secretary Scott Bessent on Wednesday warned that Chinese artificial intelligence companies could face sanctions and Entity List designations if they use "industrial-scale distillation attacks" that cross into intellectual property theft. Bessent Escalates Warning In a post on X, Bessent
[33]
Trump administration may ban Chinese AI models, Axios reports
The Trump administration is exploring ways to limit access to advanced Chinese AI models. This move could benefit American companies like OpenAI and Anthropic. Previous efforts to ban foreign open-source models have been revived due to Kimi's emergence. Cybersecurity concerns and national security
[34]
US Threatens Sanctions on China Over Alleged AI Model Theft | PYMNTS.com
The President Donald Trump administration will examine whether Chinese AI models have been distilled from their U.S. counterparts, Bessent said. "If we see, especially that overseas models are stealing from our great companies, we have the ability to sanction them because of this theft," Bessent
[35]
Bessent warns China could face sanctions over AI IP theft
Treasury Secretary Scott Bessent warned Tuesday the Trump administration could sanction China over intellectual property (IP) theft amid concerns about whether Beijing is relying on American AI to develop its own advanced models. "We've seen a lot of talk about you know open-source models coming
[36]
Scott Bessent Warns of Possible Sanctions on Chinese AI Over Alleged IP Theft: 'This Administration Suppo
Treasury Secretary Scott Bessent has indicated that the Trump administration is set to probe alleged intellectual property theft by Chinese artificial intelligence models. Bessent made it clear on Fox Business' "Mornings with Maria" on Tuesday that the U.S. government supports open-source models
[37]
Scott Bessent sends unprecedented warnings to China on AI models
The U.S. and China have been fighting over AI for a while now. Chip bans, export controls, benchmark competition, open-source model releases that sent shockwaves through Silicon Valley - most of it has been quiet enough that regular people didn't notice. July 22 was different. Scott Bessent got
[38]
Why is OpenAI Scared of Open Source? Both Chinese and US AI Models
The question that we are grappling with is this: Is this fear about money and the public offer or genuinely over national security and war games? Ever since Moonshot AI's Kimi K3 appeared on desktops, the debate around open-weight large language models and its impact on the business prospects of
[39]
Washington doubles down on its Al fight with China
A blockade is aimed at a foreign capital. The bill tends to arrive somewhere closer to home. That is the part of trade policy nobody puts in the press release, and it has been the quiet subtext of four years of American chip rules. Advanced semiconductors made a near-perfect target. They are
[40]
Trump Administration Seeks Control Over Who Gets OpenAI and Anthropic's Most Powerful AI Models: Report
The Donald Trump administration is reportedly seeking greater influence over which companies and organizations receive early access to frontier AI models developed by the likes of OpenAI and Anthropic. OpenAI, Anthropic AI Access Faces New Oversight The administration's newly launched
[41]
Chinese AI firms that rip off US models could face sanctions, Treasury Secretary Scott Bessent warns
The Trump administration could sanction Chinese artificial intelligence firms if it uncovers evidence that their open-source AI models were built by ripping off US labs, Treasury Secretary Scott Bessent warned Tuesday. "This administration supports open-source models, but what we do not support is
[42]
Are Chinese AI Models Threatening Trump's Desire for US Hegemony Over AI?
For President Donald Trump, the battle in Iran could end up becoming the easier of the battles he is fighting on the world stage. Reports of the White House's protectionist measures to save AI companies in the United States comes precisely at the time when Chinese startup Moonshot AI began
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The Trump administration has accused Chinese startup Moonshot AI of stealing intellectual property by distilling Anthropic's Fable model to create its Kimi K3 AI system. Treasury Secretary Scott Bessent warned that sanctions remain on the table if IP theft is confirmed. The allegations have divided Silicon Valley between those supporting government intervention and investors who argue the market should decide.
White House Alleges Moonshot AI Distilled Anthropic's Fable Model
The Trump administration has escalated tensions in the US vs China AI race with explosive allegations against Moonshot AI, the Chinese startup behind the recently released Kimi K3 model. Michael Kratsios, director of the White House Office of Science and Technology Policy, claimed that Moonshot AI used model distillation to clone capabilities from Anthropic's cutting-edge Fable model
5
. According to Kratsios, the company "developed a sophisticated internal platform to conduct large-scale distillation against US models, allowing them to quickly switch between multiple methods of access to avoid detection"5
. The accusations come just weeks after Kimi K3's release as an open-weight AI model that appears to rival the intelligence of models from OpenAI and Anthropic at no cost2
.Kratsios also alleged that Moonshot AI acquired Nvidia's GB300-equipped servers and accessed GB300s in Thailand, raising questions about whether the firm violated US export controls
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. The GB300 servers are part of Nvidia's Blackwell generation, which are banned from being sold to Chinese companies1
. This isn't the first time Chinese AI firms have faced such accusations. In February, Anthropic accused Moonshot AI, DeepSeek, and MiniMax of using distillation through hundreds of fake accounts involved in 3.4 million exchanges with its Claude chatbot5
.Treasury Secretary Threatens Sanctions Against Chinese AI Companies
US Treasury Secretary Scott Bessent doubled down on warnings to Chinese AI companies, stating that sanctions remain on the table following the White House allegations. "Open source is not open season on American IP," Bessent posted on X, adding that "when [Chinese] firms conduct covert, industrial-scale distillation attacks that cross the line into IP theft, sanctions and Entity List designations will be on the table"
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. On Fox Business, Bessent emphasized that while the administration supports open source models, it does not support intellectual property theft4
.Sarah Heck, Anthropic's Head of Public Policy, reinforced the national security concerns, tweeting that "illicit, adversarial distillation is IP theft and industrial espionage that supports adversary military and intelligence capabilities"
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. According to Axios, the Trump administration is considering banning US companies from hosting Chinese models unless their security can be guaranteed5
. Sanctions from the US against Chinese models would mark a significant escalation in geopolitical competition, moving beyond restricting China's access to advanced chips to targeting the AI models themselves4
.Silicon Valley Divided Over Open-Weight AI Models and Government Intervention
The allegations have exposed deep fractures within Silicon Valley over how to handle Chinese AI and open-weight AI models. Over 200 startups called the Little Tech Association, including famed incubator YCombinator, sent a letter to Kratsios and US Commerce Secretary Howard Lutnick lobbying against an outright ban of open-weight AI models
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. The group argues that denying Americans access to AI models abroad would weaken US startups and create a monopoly among AI giants3
.Legendary tech investor Bill Gurley has publicly argued in favor of letting "the free market work," writing that open-weight models avoid lock-in and are critical for capital-constrained startups
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. Chamath Palihapitiya criticized what he called "tricking the US Government to protect frontier labs' business model by using a China boogeyman," arguing it would protect the equity of 5,000 investors in OpenAI and Anthropic "at the sale of everyone else"3
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.Related Stories
Debate Over Model Distillation and How China Advanced So Quickly
Model distillation is a common AI training technique in which a smaller model learns from the outputs of a larger one. While this process can infringe on intellectual property rights, it's also widely used as a legitimate optimization method
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. Some experts dispute the idea that Kimi K3 could have been developed primarily through distillation from Fable, which has only been publicly available since July 11
.Hugging Face CEO Clem Delangue argued that "distillation is a very small factor in the ability to create good models, and it's a practice that everyone is doing, including companies in the US"
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. He emphasized that China has "really, really good research teams" taking "a much more open and collaborative approach to AI than in the US"4
. Microsoft CEO Satya Nadella also criticized large labs for imposing restrictive terms on distillation while claiming fair use rights to train models on public data4
.Economic and Political Stakes for the Trump Administration
Kimi and other free models from China pose real economic and political problems for Trump. Every time a new smart, free model from Chinese AI gets released, US companies see less reason to pay for access to models from Anthropic or OpenAI
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. Given that enthusiasm for these AI companies is driving an outsized share of economic growth, China's AI models create "a threat for an administration that really doesn't want more economic bad news," according to Anton Leicht, a fellow at the Carnegie Endowment2
. They've already rattled US stocks2
.Kimi K3's advanced capabilities have called into question the underlying business models of leading US AI labs, casting doubt on whether they can continue to justify the enormous capital requirements underpinning the frontier AI race
1
. The episode has intensified debate in Washington over the influx of Chinese open models, with some arguing the US should restrict or effectively ban the use of Chinese open-weight models to preserve America's technological advantage and mitigate potential national security concerns1
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