Michael Kratsios, director of the White House Office of Science and Technology Policy, accused Moonshot AI of distilling Anthropic's Fable 5 model to build Kimi K3, writing on X that the Chinese startup ran large-scale distillation against U.S. models through an internal platform that switched access methods to avoid detection. Distillation trains a smaller model on a larger one's outputs, and Kratsios separated efficiency work inside a lab from covert copying of proprietary American technology. Sarah Heck, Anthropic's head of public policy, thanked him and called adversarial distillation industrial espionage. Researchers doubt the claim, since Fable 5 has been public only since July 1, leaving too little time to distill and train a model that size, per TechCrunch. China's embassy called the accusations entirely unfounded.
