China’s Moonshot AI Secretly Copied Anthropic’s Tech to Build Kimi K3, White House Claims

TLDR

• The White House claims Moonshot AI used Anthropic’s Fable model to build its Kimi K3 AI.
• White House tech policy director Michael Kratsios made the allegations on X.
• Moonshot AI allegedly built a covert platform to distill US AI models at scale.
• US Treasury Secretary Scott Bessent warned sanctions and export restrictions could follow.
• Some AI researchers have questioned whether the timeline makes the claims technically possible.

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The White House has accused Chinese AI startup Moonshot AI of secretly using Anthropic’s technology to build its Kimi K3 model, which launched on July 16.

We 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 quickly switch between multiple methods of…

— Director Michael Kratsios (@mkratsios47) July 22, 2026

Michael Kratsios, director of the White House Office of Science and Technology Policy, made the claims in a post on X on Wednesday.

“We have information that Moonshot AI distilled Anthropic’s Fable for the development of its K3 model,” Kratsios wrote.

He alleged that Moonshot AI built a covert internal platform to carry out large-scale distillation of US AI models. The platform reportedly allowed the company to switch between access methods to avoid detection.

Kratsios also said Moonshot AI expanded its computing capacity, claiming the company acquired servers in Thailand to train its models.

Kimi K3 has been praised as one of China’s most capable AI models since its release. Washington has grown increasingly concerned that Chinese firms are using American models to speed up their own AI development.

The Distillation Debate

Not everyone agrees with the White House’s claims.

Some AI researchers say the timeline between Anthropic’s model and Kimi K3’s release is too short for distillation to explain the model’s performance.

Anthropic’s Fable 5 model was re-released on July 1 after export restrictions were lifted. Kimi K3 launched just 15 days later on July 16.

Elie Bakouch, a researcher at AI startup Prime Intellect, said that timeframe makes it technically unlikely. “I don’t think claiming that K3’s performance comes from Fable distillation makes sense technically,” he said.

Dean Ball, OpenAI’s head of strategic futures, also weighed in. He said he did not believe Kimi K3’s performance could be explained by distillation alone.

The White House has not released public evidence to support its claims. Moonshot AI has not responded publicly at the time of writing.

Sanctions on the Table

US Treasury Secretary Scott Bessent made clear the administration views large-scale distillation attacks as a serious issue.

“Open source is not open season on American IP,” Bessent said.

He warned that Chinese firms conducting covert distillation at scale could face sanctions and placement on the Entity List, a trade restriction measure that limits access to US technology.

Kratsios drew a distinction between legitimate distillation, which creates smaller, more efficient models, and what he described as theft of US intellectual property.

Anthropic confirmed earlier this month that the US Department of Commerce had lifted export restrictions on its most powerful models, including Fable 5 and Mythos 5. The company said it reopened international access the following day.

Both Moonshot AI and Anthropic have been eyeing IPOs, adding a financial dimension to the dispute.

The US government’s response to the alleged activity remains ongoing.