US government accuses Kimi K3 AI model maker Moonshot AI of 'stealing' Anthropic's Fable model; says covert distillation to steal US technology is "unacceptable"

July 23, 2026 - 12:12

The White House has formally accused Chinese startup Moonshot AI of stealing proprietary technology from American company Anthropic to build its Kimi K3 model. The open-weight AI model made headlines last week after rattling tech stocks, but the US government now claims its success was built on unauthorized access to a competitor's work.

Michael Kratsios, director of the White House Office of Science and Technology Policy, posted on X Wednesday that the US government possesses information showing Moonshot distilled Anthropic's Fable model to create K3. Distillation is a technique where a smaller model learns from a larger one, often used to improve performance. But when done without permission and across borders, the US government views it as theft.

"This covert distillation to steal US technology is unacceptable," Kratsios wrote. The accusation marks a rare direct intervention by the White House in a dispute between private AI companies.

Moonshot AI has not yet responded publicly to the claims. The Kimi K3 model was released as an open-weight model, meaning developers can download and modify it. That openness, combined with its strong performance, caused a stir in global markets last week as investors worried about competition from Chinese AI firms.

The situation highlights growing tensions between the US and China over AI development. The US government has been tightening export controls on advanced chips and AI technology, but this case involves alleged theft of software and training methods rather than hardware.

Industry observers say the accusation could lead to further restrictions on Chinese AI companies or even legal action. For now, the White House has made its position clear: taking American AI technology without permission will not be tolerated.