White House Office of Science and Technology Policy Director Michael Kratsios accused China's Moonshot AI on Wednesday of stealing from Anthropic's Fable model and acquiring banned Nvidia $NVDA chips to build its Kimi K3 system.
Michael Kratsios said Moonshot used a covert platform to distill Anthropic's Fable model and acquired restricted Blackwell-generation servers in Thailand
Bloomberg / Getty Images
White House Office of Science and Technology Policy Director Michael Kratsios accused China's Moonshot AI on Wednesday of stealing from Anthropic's Fable model and acquiring banned Nvidia $NVDA chips to build its Kimi K3 system.
According to a post Kratsios published on X $TWTR, Moonshot "developed a sophisticated internal platform to conduct large scale distillation against U.S. models, allowing them to quickly switch between multiple methods of access to avoid detection." Distillation is a process in which researchers train smaller AI models using outputs from larger ones to replicate some of their capabilities at lower cost.
Kratsios also alleged that Moonshot "acquired GB300-equipped servers and has accessed GB300s in Thailand, likely to train its AI models." The GB300 is part of Nvidia's Blackwell chip generation, which the U.S. prohibits from sale to Chinese companies, according to Bloomberg. Moonshot and the Chinese Embassy in Washington did not respond to requests for comment, according to Reuters.
Kratsios drew a distinction between legitimate and illegitimate uses of the technique. "Legitimate AI distillation used to create smaller, more efficient models plays a vital role in this open innovation ecosystem," he wrote. "However, large-scale, covert industrial distillation aimed at stealing proprietary U.S. technology and undermining American research is unacceptable."
The accusations came a day after Treasury Secretary Scott Bessent raised similar concerns on Fox Business, warning that the administration could sanction Chinese AI models found to have been built through IP theft. "If we see, especially, that overseas models are stealing from our great companies, we have the ability to sanction them," Bessent said, according to Bloomberg.
Moonshot released Kimi K3 last week, a 2.8-trillion-parameter open-weight model the company said outperforms all rivals except Anthropic's Claude Fable 5 and OpenAI's GPT-5.6 in overall capability. The launch sent Chinese AI competitor stocks sharply lower and drew widespread attention across the technology industry. Moonshot said it would publish K3's full weights on July 27.
The White House accusations add a legal dimension to Kimi K3's debut. Reuters, citing a diplomatic cable, reported that the U.S. State Department had in April directed embassies worldwide to draw attention to what it characterized as pervasive intellectual property theft by Chinese AI companies, with Moonshot among those named. Congressional legislation targeting Chinese firms engaged in unauthorized distillation of U.S. models has moved forward in both chambers.
Moonshot is in talks to raise capital at a valuation of as much as $50 billion ahead of a planned Hong Kong initial public offering, with discussions expected to begin in August.
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