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US Accuses Chinese AI Startup Moonshot of Theft via Distillation

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White House science adviser Michael Kratsios has accused Chinese startup Moonshot AI of using Anthropic's Fable model to develop its K3 system through large-scale, covert industrial distillation.

In a Wednesday tweet on X, Kratsios said Moonshot created a sophisticated internal platform to conduct distillation against U.S. models while switching access methods to avoid detection. He added that Moonshot also acquired GB300-equipped servers and accessed them in Thailand for artificial intelligence training.

While the U.S. supports legitimate distillation for efficiency, the large-scale, covert industrial distillation aimed at stealing proprietary US technology is "unacceptable," Kratsios said.

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