US Treasury Warns of Sanctions Over China's 'Industrial Distillation' of American AI Models

Treasury Secretary Scott Bessent said the U.S. government will examine and potentially sanction Chinese AI companies that conduct large-scale covert copying of American models, calling the practice "industrial distillation"—a euphemism for theft—after Beijing-based Moonshot AI's Kimi K3 model reached parity with OpenAI and Anthropic's leading systems.