US Accuses China of 'Stealing' AI Technology as Chinese Models Gain Popularity

China is once again in the spotlight as its artificial intelligence models gain widespread traction. Data from AI model marketplace OpenRouter shows many American companies are turning to low-cost Chinese AI models. This trend serves as a validation for China’s open-source and open-weight AI industry. However, the popularity of Chinese AI has drawn a sharp reaction from the United States, with the Trump administration accusing Chinese firm Moonshot of stealing data from Anthropic’s most advanced model, Fable, to develop its latest K3 model. Michael Kratsios, a senior technology official in the Trump administration, stated that Moonshot used Fable to aid the development of K3. He described the practice as a large-scale, clandestine industrial distillation effort aimed at stealing exclusive US technology and undermining American research, calling it unacceptable. US Treasury Secretary Scott Bessent separately indicated he is considering adding Moonshot to a trade blacklist and imposing strict sanctions. The accusations are likely to heighten technological tensions between Beijing and Washington, as both nations race to launch increasingly sophisticated AI models with significant economic and potential military applications. Moonshot did not immediately respond to a request for comment. A spokesperson for the Chinese Embassy in Washington, Liu Chang, dismissed the allegations as completely unfounded, adding that China respects intellectual property protections and urging relevant US parties to respect the facts and stop smearing China’s AI development achievements. Anthropic policy executive Sarah Heck claimed the alleged theft of US models by Chinese actors poses a serious national security risk to the United States.