Treasury Secretary Scott Bessent said Tuesday that the U.S. government would examine Chinese open source AI models for signs of intellectual property theft and could impose sanctions on Chinese AI companies if theft is confirmed.
“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 said on Fox Business. His comments were first reported by Bloomberg.
The warning comes as Chinese AI models — most recently Moonshot AI’s Kimi K3 — have grown in capability and popularity, posing a potential threat to American firms such as OpenAI and Anthropic, including their ability to raise capital for continued development. On Monday, Axios reported the Trump administration is also considering a wholesale ban on Chinese open source models, though that claim has been disputed.
Potential sanctions would add to a broader set of measures the U.S. has pursued to maintain its position in AI development, including restricting China’s access to advanced chips and tightening export controls. Targeting AI models directly could mark a significant escalation in that effort.
At the center of the dispute is model distillation — a technique that transfers some capabilities of a larger AI model into a smaller, more accessible system. Not everyone agrees that distilling another company’s model constitutes theft. Microsoft CEO Satya Nadella recently criticized AI labs for assuming it does, and Hugging Face CEO Clem Delangue argued that distillation is “a very small factor in the ability to create good models, and it’s a practice that everyone is doing, including companies in the U.S.”
The debate over AI training practices carries legal weight as well. Separately, Anthropic this week received court approval to begin paying authors as part of a $1.5 billion settlement after a judge ruled it had illegally downloaded millions of copyrighted books to train its AI.
Source: TechCrunch