Bessent floats sanctions on Moonshot over Fable distillation

U.S. Treasury Secretary Scott Bessent said Wednesday that sanctions on Chinese AI firms are still on the table. The trigger: a White House accusation that Moonshot ran large-scale distillation of Anthropic’s Fable model. “Open source doesn’t mean open season on American IP,” Bessent wrote on X.

White House science and technology policy chief Michael Kratsios claims Moonshot obtained Nvidia servers with GB300 chips and had access to them in Thailand. Those Blackwell-generation servers are barred from sale to Chinese companies.

Some experts doubt Kimi K3 is built mainly on distilling Fable: Anthropic’s model has only been public since July 1. Moonshot shipped K3 last week with open weights.