White House draws new AI line on China

Moonshot, a Chinese AI company, was accused this week by the Trump administration of using distillation—training smaller AI models from larger ones—to copy Anthropic's Fable model. Axios reports technology adviser Michael Kratsios distinguished between legitimate small-scale distillation, which produces efficient models, and large-scale covert distillation targeting proprietary technology, which the administration frames as intellectual property theft. The distinction could position the White House to sanction Chinese AI companies without restricting open-source models that researchers and startups increasingly rely on—particularly Moonshot's cheaper Kimi, which is gaining adoption among U.S. customers.

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