A senior White House official has accused Chinese AI startup Moonshot AI of secretly distilling Anthropic’s Fable model to build its viral Kimi K3 system — the first time a sitting US official has publicly tied a specific Chinese lab to a specific American model.
Michael Kratsios, director of the White House Office of Science and Technology Policy, wrote on X that Moonshot AI “developed a sophisticated internal platform to conduct large scale distillation against U.S. models, allowing them to quickly switch between multiple methods of access to avoid detection.” He said the company also acquired servers equipped with Nvidia’s export-restricted GB300 chips, including hardware accessed in Thailand, “likely to train its AI models.”
Kratsios drew a line between routine knowledge distillation — a widely used technique for training smaller, cheaper models off a larger one — and what he called “large-scale, covert industrial distillation aimed at stealing proprietary U.S. technology,” which he said Washington would not tolerate.
Experts push back
Independent researchers questioned the timeline behind the claim. Braden Hancock of the Laude Institute noted that Fable only became publicly available on July 1, leaving little time to extract enough data and retrain a model as capable as Kimi K3 through distillation alone. Nathan Lambert of the Allen Institute for AI said that as Chinese labs near frontier-level performance, plain supervised distillation yields diminishing returns, and that Moonshot’s own research team — which includes alumni of Carnegie Mellon University — has the expertise to build strong models on its own.
Part of a wider pattern
The accusation follows Anthropic’s own claim earlier this month that Alibaba used tens of thousands of fake accounts to systematically extract Claude’s capabilities, and it lands weeks after Moonshot paused new Kimi K3 subscriptions amid a GPU shortage. The US and China are due to hold their first AI-focused talks under the Trump administration in September, and disputes over model distillation and chip access are likely to be near the top of the agenda.
Moonshot AI did not respond to requests for comment from reporters who covered the accusation. Anthropic has not issued its own statement on this specific claim.