The White House’s top tech policy official, Michael Kratsios, has accused Chinese AI company Moonshot AI of using a technique called distillation to train its Kimi K3 model on Anthropic’s Fable. Distillation essentially means training a smaller model on the outputs of a more powerful one — a common practice, but one that can violate terms of service if done without permission.
Treasury Secretary Scott Bessent followed up, saying sanctions and placement on the entity list — the US export control blacklist — are under consideration. Kratsios claimed Moonshot AI built an internal platform that switches between multiple access methods to evade detection. He also alleged the company purchased servers with Nvidia’s GB300 chips and is using them in Thailand.
Kratsios did not provide public evidence. Anthropic has not commented.