Scott Bessent, US treasury secretary, during the 2026 Reagan National Economic Forum at the Ronald Reagan Presidential Library in Simi Valley, California, US, on Friday, May 29, 2026.
Caroline Brehman | Bloomberg | Getty Images
U.S. Treasury Secretary Scott Bessent on Tuesday said the Trump administration will look into whether Chinese artificial intelligence models have been distilled from American models, stating that the government does not support “IP theft.”
Chinese open-weight models are gaining steam against leading offerings from American companies like OpenAI and Anthropic, sparking concerns from tech executives and government officials about the durability of the U.S.’ lead in the AI race. Moonshot AI, a Chinese startup, released a new model called Kimi K3 earlier this month that outperforms those companies across some industry benchmarks.
“If we see, especially that overseas models are stealing from our great companies, we have the ability to sanction them because of this theft,” Bessent told Fox Business on Tuesday.
Bessent said the technical term for this theft is called distillation, which is an AI training method where a small, less capable model is built using outputs from an existing, stronger model. Anthropic sent a letter to the U.S. Senate Committee on Banking, Housing, and Urban Affairs last month alleging that the Chinese tech company Alibaba had carried out the “the largest known distillation attack” against it to date.
The U.S. and China are planning to hold talks around AI in September, according to a report from Reuters on Tuesday. Bessent will represent the U.S. during the discussions, the report said.
“We are finding watermarks of our U.S. large language models on many of the Chinese models, and that’s unacceptable,” Bessent said Tuesday. “We’re going to be looking at that in the coming days or weeks.”
But both Anthropic and OpenAI have faced their own accusations of theft in recent years.
Anthropic agreed to pay $1.5 billion in September to settle a class action lawsuit with a group of authors, who alleged that the company illegally downloaded books from pirated databases. The New York Times sued OpenAI and Microsoft in 2023, alleging that the companies infringed on copyright by using its intellectual property to train models.
