White House accuses China's Moonshot of stealing Anthropic AI

A top White House official accused Chinese AI startup Moonshot AI on Wednesday of covertly copying Anthropic's most advanced model to build its Kimi K3. Michael Kratsios, director of the White House Office of Science and Technology Policy, said the US had information that Moonshot AI distilled Anthropic's Fable model to develop K3.

What is AI distillation?

Distillation is a technique in which a smaller AI model is trained to mimic the outputs of a larger, more capable one. The method is widely used across the industry, but US officials say Chinese firms have deployed it at scale to illicitly copy proprietary American systems, according to Kratsios.

How did Moonshot allegedly distill Anthropic's model?

Kratsios said Moonshot built a sophisticated internal platform to conduct large-scale distillation against US models, which let the company quickly switch between multiple methods of access to avoid detection. He said Moonshot had also acquired servers equipped with Nvidia's advanced GB300 chips and had accessed GB300-equipped servers in Thailand, likely to train its AI models, implying a workaround of US export controls that restrict Chinese access to top-tier American semiconductors.

Kratsios did not indicate what consequences the company may face.

Could Moonshot face US sanctions?

Treasury Secretary Scott Bessent said Tuesday that foreign companies could be sanctioned for stealing US technology, though he did not offer further details. "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 told Fox Business.

Bessent specifically pointed to the distillation process, saying US authorities were finding watermarks of US large language models on many Chinese models, calling it unacceptable. He said the matter would be examined in the coming days or weeks.