White House accuses China's Moonshot AI of distilling Anthropic's Fable to build Kimi K3

White House Office of Science and Technology Policy director Michael Kratsios said Wednesday that the US has information the Chinese AI company Moonshot AI distilled Anthropic’s Fable model while developing its own Kimi K3 model.

The accusation sharpens the Trump administration’s campaign against Chinese open-weight model developers: for the first time it names a specific US model allegedly copied and a specific chip-evasion route. Distillation is the practice of training one model on the outputs of another, a way to transfer capability without paying to build it from scratch.

Moonshot built “a sophisticated internal platform to conduct large scale distillation against U.S. models,” Kratsios said, switching between multiple access methods to evade detection. He also said Moonshot acquired servers equipped with Nvidia’s GB300 chips and accessed GB300 chips in Thailand, likely to train its models, a possible circumvention of US export controls. Kimi K3 has been described as a 2.8-trillion-parameter open-weight model.

Treasury Secretary Scott Bessent said the administration has the authority to sanction foreign companies for stealing US technology and that he was considering adding Moonshot to a trade blacklist.

“Illicit, adversarial distillation is IP theft and industrial espionage that supports adversary military and intelligence capabilities,” said Sarah Heck, Anthropic’s head of public policy.

The claims are government allegations, not adjudicated findings, and no supporting technical evidence has been made public. Moonshot has not addressed the specifics on the record. The Chinese embassy in Washington called Kratsios’s comments “entirely unfounded,” saying China respects intellectual-property protections.

Distillation accusations are hard to prove, because a model’s behavior can echo another’s for many reasons short of copying. Whether the administration moves from a public accusation to an actual blacklisting will show how much evidence it believes it has.