U.S. Treasury secretary Scott Bessent doubled down on his warnings to Chinese AI companies on Wednesday, saying that sanctions remain on the table after a White House official accused Moonshot of improperly distilling Anthropic's Fable model. Model distillation is a common AI training technique in which a smaller model learns from the outputs of a larger one. While this process can infringe on intellectual property rights, it's also widely used as a legitimate optimization method. 'Open source is not open season on American IP,' Bessent posted on X. 'When [Chinese] firms conduct covert, industrial-scale distillation attacks that cross the line into IP theft, sanctions and Entity List designations will be on the table.' Bessent's latest remarks come hours after the White House's science and technology policy chief Michael Kratsios accused the China-based Moonshot of conducting large-scale distillation against U.S. models. He alleged that Moonshot had acquired Nvidia's 'GB300-equipped...
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