The US government is accusing Chinese AI startup Moonshot of using a technique called distillation to train its Kimi K3 model on Anthropic’s Fable — and the consequences could be severe. White House science and technology policy director Michael Kratsios claims that Moonshot built an internal platform that switches between multiple access channels to evade detection. He also alleges that the company purchased servers equipped with Nvidia GB300 chips and used them in Thailand. Treasury Secretary Scott Bessent later said sanctions and entity list designations are on the table.
Distillation is the practice of using a stronger model’s outputs to train a weaker one. Kratsios offered no public evidence to back up the allegations.
Anthropic did not immediately respond to a request for comment.