TLDR US officials allege Moonshot AI illegally leveraged Anthropic’s Fable model in developing Kimi K3. Michael Kratsios, White House tech policy chief, publicly made these accusations via so
The White House has leveled serious allegations against Moonshot AI, a Chinese artificial intelligence company, claiming it covertly utilized Anthropic’s proprietary technology to develop its Kimi K3 model, which debuted on July 16.
We have information that Moonshot AI distilled Anthropic’s Fable for the development of its K3 model.
To do this they developed a sophisticated internal platform to conduct large scale distillation against U.S. models, allowing them to quickly switch between multiple methods of…
— Director Michael Kratsios (@mkratsios47) July 22, 2026
Michael Kratsios, who leads the White House Office of Science and Technology Policy, publicly disclosed these accusations through a social media post on Wednesday.
“We have information that Moonshot AI distilled Anthropic’s Fable for the development of its K3 model,” Kratsios wrote.
According to Kratsios, the Chinese company established a clandestine internal infrastructure designed for systematic distillation of American AI technologies. This platform allegedly enabled Moonshot AI to rotate between different access points to evade detection.
Kratsios further stated that Moonshot AI significantly increased its computational infrastructure, asserting the firm obtained server hardware in Thailand for model training purposes.
Since its debut, Kimi K3 has garnered recognition as among China’s most advanced AI systems. US officials have expressed mounting alarm that Chinese technology companies are exploiting American models to accelerate their domestic AI initiatives.
The White House’s assertions have not received universal acceptance.
Several artificial intelligence researchers contend the chronology between Anthropic’s model availability and Kimi K3’s market introduction is insufficient for distillation to account for the system’s capabilities.
Anthropic’s Fable 5 system became available again on July 1 following the removal of export controls. Kimi K3 emerged merely 15 days afterward on July 16.
Elie Bakouch, who researches at AI company Prime Intellect, argued this window makes the claim technically improbable. “I don’t think claiming that K3’s performance comes from Fable distillation makes sense technically,” he stated.
Dean Ball, who serves as OpenAI’s head of strategic futures, also offered commentary. He expressed skepticism that distillation alone could account for Kimi K3’s demonstrated performance.
The administration has not made public any supporting evidence for these allegations. Moonshot AI had not issued a public statement as of this writing.
Treasury Secretary Scott Bessent emphasized the government considers systematic distillation operations a critical national security concern.
“Open source is not open season on American IP,” Bessent said.
He indicated Chinese companies engaging in clandestine large-scale distillation operations may encounter sanctions and inclusion on the Entity List, a regulatory mechanism restricting access to American technology.
Kratsios differentiated between authorized distillation practices, which produce streamlined, efficient systems, and what he characterized as misappropriation of American intellectual property.
Anthropic acknowledged earlier this month that the Commerce Department removed export limitations on its most advanced systems, including Fable 5 and Mythos 5. The organization reported restoring global access immediately thereafter.
Both Moonshot AI and Anthropic have expressed interest in pursuing public offerings, introducing commercial considerations to the controversy.
The federal government’s actions regarding these alleged violations continue to develop.
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