Michael Kratsios Accuses Chinese Company Moonshot of Stealing U.S. Technology Through AI Distillation
White House science advisor Michael Kratsios stated that the Chinese company Moonshot built its Kimi K3 model by copying Anthropic’s Fable LLM while utilizing chips not officially cleared for export to China. Kratsios described the process as "covert industrial distillation" aimed at undermining American research and stealing proprietary technology. The administration announced a push to protect domestic AI leaders like OpenAI and Anthropic from Chinese competitors. To address this, a bipartisan group of lawmakers introduced the Collaboration on Adversarial Threats and Security Risks Act. This legislation proposes an antitrust exemption to allow AI companies to coordinate on security risks and mitigate threats from Chinese "copycats." While the U.S. government views these actions as a security threat, China has rejected the allegations as an "unfounded smear," asserting that its progress is driven by sustained internal efforts. Meanwhile, industry experts remain divided on the impact of distillation, with some arguing it is a common, fair-use practice while others suggest that high-level capabilities require more than just copying data.