White House Accuses Moonshot AI of Distilling Anthropic's Fable and Using Banned Nvidia Chips to Build Kimi K3
White House OSTP director Michael Kratsios said Moonshot AI covertly distilled Anthropic's Claude Fable 5 and trained Kimi K3 on banned Nvidia GB300 chips routed through Thailand, days before the model's full weights are due to go public.
Michael Kratsios, director of the White House Office of Science and Technology Policy, said on July 22 that Moonshot AI ran a covert, industrial-scale campaign to distill Anthropic's Claude Fable 5 while building its 2.8-trillion-parameter Kimi K3, and separately obtained export-controlled Nvidia GB300 chips by routing training through servers in Thailand instead of importing hardware into China.
- Kratsios alleged Moonshot rotated access routes to Fable 5 to stay hidden while pulling training data at scale
- The chip claim: GB300-equipped servers accessed via Thailand-based infrastructure, without physically importing the hardware
- Treasury Secretary Scott Bessent threatened sanctions on Chinese firms found to run distillation attacks
- Anthropic said in February it had already traced 3.4 million Claude conversations to Moonshot through hundreds of fabricated accounts
- Kimi K3's full open weights are still scheduled to be released by July 27
Kratsios did not present evidence that Fable 5 outputs were directly incorporated into Kimi K3, and Moonshot has not responded to the allegations. Independent researchers pushed back: Braden Hancock of the Laude Institute noted Fable 5 only became public on July 1, leaving little time for large-scale extraction and retraining before Kimi K3 shipped, while Nathan Lambert of the Allen Institute for AI argued that matching frontier performance at K3's level would require reinforcement learning rather than simple supervised distillation from API access.
I don't think you get a model this strong and this quickly on the heels of Fable doing strictly distillation. - Braden Hancock, Laude Institute