White House official accuses Chinese startup of distilling Anthropic model, accessing banned Nvidia chips

Technology White House official accuses Chinese startup of distilling Anthropic model, accessing banned Nvidia chips Comments: by Julia Shapero - 07/22/26 6:50 PM ET Comments: Link copied by Julia Shapero - 07/22/26 6:50 PM ET Comments: Link copied

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A top White House official accused a Chinese startup on Wednesday of improperly using Anthropic’s latest model and accessing restricted Nvidia chips to develop its new Kimi model.

Michael Kratsios, the director of the White House Office of Science and Technology Policy, said the administration has information that Moonshot AI distilled Anthropic’s Fable to produce Kimi K3.

Distillation refers to a technique used to transfer the knowledge of a larger, more capable model to a smaller model.

“To do this they 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,” he wrote in a post on X.

Kratsios also alleged that Moonshot has acquired servers equipped with Nvidia’s GB300 system and has accessed the same system in Thailand, suggesting they were likely used to train the firm’s AI models.

The GB300 is some of Nvidia’s most advanced technology, containing its Blackwell chips, which are not allowed to be sold to China. The highest-level chip currently receiving licenses from the administration is the H200.

“The United States strongly supports the free and fair development of AI, including a thriving competitive ecosystem that spans frontier models, specialized systems, open-source frameworks, and open-weight models,” Kratsios said.

“Legitimate AI distillation used to create smaller, more efficient models plays a vital role in this open innovation ecosystem,” he continued. “However, large-scale, covert industrial distillation aimed at stealing proprietary U.S. technology and undermining American research is unacceptable.”

The release of Moonshot’s Kimi model last week, which the company claims can perform on par with top models from Anthropic and OpenAI, has raised concerns about whether China is closing in on America’s lead in AI.

Treasury Secretary Scott Bessent separately warned Tuesday that the Trump administration could sanction China over intellectual property (IP) theft if they are found to be “stealing from our great companies.”

“We are finding watermarks of our U.S. large language models on many of the Chinese models, and that that’s unacceptable, Maria,” Bessent told Fox Business’s Maria Bartiromo. “So, we’re going to be looking at that in the coming days or weeks.”

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