China’s commerce ministry on Monday condemned the United States for “AI hegemonism” and warned of potential countermeasures. This response came after senior U.S. officials indicated that Chinese AI companies might face probes, sanctions, and trade restrictions due to allegations of U.S. technology theft.
The ministry stated that Washington is threatening Chinese companies with punishment over claims they used “distillation” to replicate advanced U.S. AI models, despite asserting there are no factual or legal justifications for these actions.
“For any action that causes substantive harm to Chinese interests, China will take all necessary measures to firmly safeguard its legitimate rights and interests,” a ministry spokesperson said in a statement.
U.S. officials say they differentiate between legitimate distillation and large-scale extraction that constitutes intellectual property theft.
The comments signal an escalation in a dispute centered on Beijing-based Moonshot AI. Its recently released Kimi K3 model has gained attention for its coding capabilities and has sparked increased debate in Washington about whether Chinese developers are copying U.S. models or quickly closing the technological gap through their own research.
White House Office of Science and Technology Policy Director Michael Kratsios stated last week that the U.S. government possesses information suggesting Moonshot derived Anthropic’s Claude Fable 5 model to create Kimi K3. He also claimed the company had obtained servers with Nvidia’s GB300 chips and accessed these systems in Thailand to train its AI models.
U.S. Treasury Secretary Scott Bessent has warned that Chinese companies could face financial sanctions or placement on the Commerce Department’s Entity List, which restricts access to U.S. technology.
Bessent wrote on X: “We support open-source AI and the innovation it unlocks. But open source is not open season on American IP… “When PRC firms conduct covert, industrial-scale distillation attacks that cross the line into IP theft, sanctions and Entity List designations will be on the table.”
Anthropic stated in February that it had identified over 3.4 million interactions with its Claude models related to Moonshot. It also said hundreds of fraudulent accounts were used to target capabilities such as reasoning, coding, data analysis, tool use, computer vision, and computer operations.
By CEO NA Editorial Staff
