US weighs China sanctions over alleged AI model distillation
What's next: Treasury Secretary Scott Bessent is expected to join U.S.-China AI talks in September as scrutiny of Chinese open-weight models grows.
The Trump administration is considering sanctions if it finds Chinese AI models were built by distilling leading U.S. systems, Treasury Secretary Scott Bessent said Tuesday. Bessent said officials are examining whether Chinese developers used outputs from American large language models in ways that amount to intellectual property theft. The dispute comes as Chinese open-weight models gain ground against products from OpenAI and Anthropic. Earlier this month, Moonshot AI released Kimi K3, which CNBC said outperformed those U.S. companies on some industry benchmarks. Anthropic told a Senate panel last month that Alibaba had carried out what it called the largest known distillation attack against it.