China’s Moonshot AI stole from Anthropic’s most sophisticated AI large language model, Fable, to help create its latest K3 release and has acquired advanced Nvidia AI chips, top White House tech official Michael Kratsios said Wednesday.
“We have information that Moonshot AI distilled Anthropic’s Fable for the development of its K3 model,” he said in a post on X. “Large-scale, covert industrial distillation aimed at stealing proprietary US technology and undermining American research is unacceptable.”
He also said Moonshot AI had acquired servers containing powerful Nvidia NVDA.O AI chips called GB300s and had used them in Thailand, “likely to train its AI models.” A senior Trump administration official said in February that Chinese AI startup DeepSeek’s latest AI model was trained on Nvidia’s most advanced AI chip, in what could represent a violation of U.S. export controls.
Moonshot and the Chinese Embassy in Washington did not immediately respond to a request for comment.
The US State Department ordered a global push in April to bring attention to what it says are widespread efforts by Chinese companies, including Moonshot AI, to steal intellectual property from US artificial intelligence labs, according to a diplomatic cable seen by Reuters.
Distillation is the process of training smaller AI models using output from larger, more expensive ones as part of an effort to lower the costs of training a powerful new AI tool.
OpenAI has warned lawmakers that DeepSeek was targeting the ChatGPT maker and the nation’s leading AI companies to replicate models and use them for its own training, Reuters reported in February.
The April cable from the State Department said, “AI models developed from surreptitious, unauthorized distillation campaigns enable foreign actors to release products that appear to perform comparably on select benchmarks at a fraction of the cost but do not replicate the full performance of the original system.”
Chinese AI startup Moonshot on Friday unveiled Kimi K3, a 2.8 trillion-parameter model that it said is the world’s largest open-weight AI system and delivers performance approaching US giant Anthropic’s frontier Fable model.
The launch, which comes a month after Anthropic’s Fable and Mythos models were abruptly withdrawn by the US government due to security concerns, underscores how quickly China’s open AI ecosystem is narrowing the gap with the most advanced US systems.
