Beijing said it would take necessary measures to protect its AI companies and national interests if Washington follows through on sanctions threats tied to alleged model distillation and intellectual property violations.
China warned it would take all necessary measures to protect its AI companies and national interests if the United States follows through on threatened sanctions, rejecting American allegations of intellectual property theft as “baseless smears.” The latest clash centers on Moonshot AI’s Kimi K3, a 2.8-trillion-parameter model that U.S. officials are scrutinizing over whether it improperly extracted capabilities from Anthropic’s Fable 5 model. Treasury Secretary Scott Bessent said the Trump administration would closely monitor open-source AI models from Chinese companies for signs of “industrial-scale distillation” of American systems, and indicated sanctions or Entity List designations could follow if investigations confirm violations of U.S. intellectual property laws. DeepSeek and MiniMax have also been implicated in the broader U.S. concerns. The dispute marks a shift in the U.S.-China technology rivalry from semiconductor export controls toward software and model IP, with Beijing framing the accusations as part of a broader effort to contain Chinese innovation.