Commerce Department Probes Chinese AI Firms Over Nvidia Chip Access and Anthropic Model Distillation
The Commerce Department is formally investigating whether Chinese artificial intelligence companies, including Moonshot, improperly accessed restricted U.S. hardware and American models. The probe follows a recent public campaign by the Trump administration alleging that Moonshot used unauthorized Nvidia chips to train its Kimi K3 system and illegally distilled data from Anthropic’s Fable model.
The regulatory action shifts the debate from policy rhetoric to enforcement, with Commerce officials examining whether companies bypassed export controls to build domestic capabilities. While Treasury and White House officials have floated sanctions and entity list placements for accused distillers, Silicon Valley is broadly pushing back against potential restrictions on Chinese open-source AI systems.
From the sources (25 posts)
@mtsliveSITUATION UPDATE: Treasury Secretary Scott Bessent says the US will examine open source AI models made overseas, including Chinese ones, and act on evidence of IP theft. “This administration supports open source models, but what we do not
@techmemeUS Treasury Secretary Scott Bessent says the Trump administration is looking into Chinese AI models over distillation claims and it could "sanction them" (@ashleycapoot / CNBC) (Visit Techmeme dot com for the link and full context!)
@edludlowTreasury Sec. Bessent on Fox: “This administration supports open source models, but what we do not support is IP theft. If we see, especially, that overseas models are stealing from our great companies, we have the ability to sanction them
@firstsquawkUSTR GREER: WE SEE CHINA DISTILLING AI MODELS AS A FORM OF IP THEFT
@financialjuiceUSTR Greer: We see China distilling AI models as a form of IP theft
@financialjuiceUSTR's Greer on AI, China: We are concerned that China is distilling our models - CNBC
@wallstengineUS TREASURY SECRETARY BESSENT ON AI: CHINA MODELS NEED TO BE HELD TO SAME STANDARDS. YOU CAN'T USE COUNTERFEIT GOODS WE ARE CREATING COMPETITORS THE QUESTION IS, ARE CHINA MODELS USING STOLEN MATERIALS? GOING TO BE LOOKING AT CHINA MO
@financialjuiceUS Treasury Secretary Bessent: The question is, are China models using stolen materials?
@financialjuiceUS Treasury Secretary Bessent on AI: We are finding US 'watermarks' on Chinese models
@financialjuiceUS Treasury Secretary Bessent: We can sanction any open AI models if they do IP theft
@financialjuiceUS Treasury Secretary Bessent: Have seen talk of open-source AI models threatening the US. The US supports open-source models but not IP theft
@mkratsios47We have information that Moonshot AI distilled Anthropic’s Fable for the development of its K3 model. To do this they developed a sophisticated internal platform to conduct large scale distillation against U.S. models, allowing them to qu
@tradfi*TRUMP ADVISER MICHAEL KRATSIOS: HAVE INFORMATION THAT MOONSHOT AI DISTILLED ANTHROPIC’S FABLE FOR THE DEVELOPMENT OF ITS K3 MODEL
@financialjuiceTrump Adviser Kratsios: Have information that Moonshot AI distilled Anthropic's fable for the development of its K3 model.
@financialjuiceTrump Adviser Kratsios: Large-scale, covert industrial distillation aimed at stealing proprietary US technology and undermining American research is unacceptable.
@polymarketBREAKING: White House accuses China’s Moonshot AI of distilling Anthropic’s Fable to develop Kimi K3.
@wesrothall of us staying that Kimi K3 is very similar to Fable... we were on to something
@exec_sumBREAKING: Senior White House advisor Michael Kratsios says China's Moonshot AI distilled Anthropic's Fable model to develop its now-viral Kimi K3 model
@micsolanaRT @mkratsios47: We have information that Moonshot AI distilled Anthropic’s Fable for the development of its K3 model. To do this they de…
@mtsliveSITUATION DETECTED: White House OSTP director Michael Kratsios says Moonshot AI distilled Anthropic’s Fable to develop Kimi K3, citing US government information.
@marionawfal🇺🇸 The U.S. government briefly cut off the world from its most advanced AI models, then sent diplomats around the globe to tell everyone there's no 'kill switch.' When the White House blocked non-U.S. residents from Anthropic's Mythos and
@imjaredzRT @mkratsios47: We have information that Moonshot AI distilled Anthropic’s Fable for the development of its K3 model. To do this they de…
@matthewberman1. Didn't we know this? 2. The data distilled from Ant was not enough to make the model as good as it is. 3. Why can't Fable detect and prevent distillation attacks? 4. This seems like a losing battle, let's just go all-in on building our
@sophiacai99Instead of banning Chinese AI models by putting them on a Commerce entities list, the Trump administration is zeroing in on Chinese models being “distilled” from — or copying — U.S. models. Bessent yesterday floated sanctions.
@kimmonismusThis reads to me as if preparations are being made to ban models like Kimi K3 in the future. I would be very interested in the evidence that leads to the assumption that Fable 5 was distilled for Kimi K3.