US threatens sanctions on Chinese AI firms after accusing Moonshot of distilling Anthropic's model

Treasury Secretary Scott Bessent warned that the US could sanction Chinese AI companies after White House officials accused Chinese firm Moonshot of distilling Anthropic's Fable model to build its own Kimi K3 model. Model distillation involves using the outputs of one AI to train another, raising intellectual property concerns. The accusation marks a sharp escalation in US-China AI tensions.