{"id":1014,"date":"2026-07-21T21:43:01","date_gmt":"2026-07-21T21:43:01","guid":{"rendered":"https:\/\/longhaulmovingpros.com\/?p=1014"},"modified":"2026-07-21T21:43:01","modified_gmt":"2026-07-21T21:43:01","slug":"us-treasury-chief-threatens-sanctions-on-chinese-ai-labs-over-ip-theft-concerns","status":"publish","type":"post","link":"https:\/\/longhaulmovingpros.com\/?p=1014","title":{"rendered":"US Treasury Chief Threatens Sanctions on Chinese AI Labs Over \u2018IP Theft\u2019 Concerns"},"content":{"rendered":"<div>\n<p>U.S. Treasury Secretary Scott Bessent has \u201cthe ability to sanction,\u201d and he is not afraid to use it.<\/p>\n<p>Read more <a href=\"https:\/\/longhaulmovingpros.com\/?p=1012\">Garmin\u2019s New Screenless Wearable Could Be a Serious Whoop Competitor<\/a><\/p>\n<p>In an interview with Fox Business on Tuesday, Trump\u2019s Treasury chief said that Chinese open-source AI models should expect increased scrutiny from American authorities. Over the last few months, American frontier AI labs and the Trump administration have accused Chinese open-source providers of IP theft related to advanced AI models developed in the U.S.<\/p>\n<p>\u201cWe\u2019ve seen a lot of talk about open source models coming and threatening the large language models in the US,\u201d Bessent said. \u201cThis administration supports open source models, but what we do not support is IP theft. If we see, especially, that overseas models are stealing from our great companies, we have the ability to sanction them.\u201d<\/p>\n<h2>The fight over models<\/h2>\n<p>China and the United States have been locked in a contest for global AI domination, and it has been heating up as of late. The U.S. is still the leader in artificial intelligence, holding a commanding position not just on the frontier AI models through industry leaders like OpenAI and Anthropic, but also on AI chip technology through Nvidia, AMD, and Intel. But Chinese models are quickly bridging that gap. The first signs of this came in January 2025 in the form of DeepSeek\u2019s R1, which was as good at some common AI tasks as OpenAI\u2019s then-best model, and which didn\u2019t require the latest\u2014and most expensive\u2014Nvidia GPUs to run, making it significantly more cost efficient. Its release led to a trillion-dollar market freakout that drove the Trump administration to impose export bans and overall stricter trade restrictions on China.<\/p>\n<div>\n<\/div>\n<p>Then last week, Alibaba-backed Chinese AI startup Moonshot unveiled Kimi K3, its latest soon-to-be-open-weight model that ranks close to or above some of the most advanced closed-weight offerings from OpenAI and Anthropic on several benchmarks. The release and its incredible online reception challenged the long-standing assumption that Chinese AI labs were still several months behind American competitors. According to independent testing from Artificial Analysis and Arena.ai, Kimi K3\u2019s capabilities are competitive with both Anthropic\u2019s Fable 5, which was released last month, and OpenAI\u2019s GPT-5.6, which was released just a week prior.<\/p>\n<div>\n<\/div>\n<p>Back in February, though, Anthropic accused three Chinese AI companies \u2014Moonshot, DeepSeek, and Minimax\u2014 of violating Anthropic\u2019s terms of service and regional access restrictions to \u201cillicitly\u201d extract the capabilities of its Claude model and use that to improve their own. Around the same time, OpenAI sent a memo to the House of Representatives, accusing DeepSeek of a similar tactic, claiming that it is trying to \u201cfree-ride on the capabilities developed by OpenAI and other U.S. frontier labs.\u201d Then, last month, Anthropic accused Chinese tech giant Alibaba of the similar behavior.<\/p>\n<h2>Theft or standard-practice?<\/h2>\n<p>This \u201cillicit\u201d \u201ctheft\u201d process is by no means new, and is actually fairly common in the AI industry. The practice is called distillation, and put very simply, it\u2019s when one \u201cteacher\u201d model\u2019s output is used to train another \u201cstudent\u201d model.<\/p>\n<p>Read more <a href=\"https:\/\/longhaulmovingpros.com\/?p=1010\">Iran Claims It \u2018Destroyed\u2019 Amazon\u2019s Central Data Infrastructure In Bahrain<\/a><\/p>\n<div>\n<\/div>\n<p>But in a memo from April, Trump\u2019s chief science and technology adviser deemed the China-led \u201c\u201d version of the practice \u201cadversarial,\u201d and vowed to crack down on it by helping U.S. AI labs identify and thwart attempts at such distillation.<\/p>\n<p>On Tuesday, Bessent said that watermarks of American LLMs were found on many Chinese AI offerings, adding that the administration would be looking into the matter in \u201cthe coming days or weeks.\u201d<\/p>\n<h2>Tensions rise ahead of U.S.-China AI talks<\/h2>\n<p>Also on Tuesday, Reuters reported that the United States and China would have their first bilateral talks regarding artificial intelligence. Similar working-level talks between the two governments had taken place under the Biden administration, but this is the first such meeting of Trump\u2019s second term. Many of the details for these long-anticipated talks are undetermined, according to the report citing unnamed sources familiar with the matter, except that it will take place in September and be led by Bessent on the U.S. side.<\/p>\n<div>\n<\/div>\n<p>Bessent Will likely bring up the AI distillation concerns in the talks, if they take place, while the Chinese authorities are expected to raise their concerns regarding Mythos, Anthropic\u2019s scary new AI model that can allegedly hack into even the most secure systems. The Trump administration has only allowed Anthropic to share the model with a handful of companies and government agencies around the world, and Chinese companies and agencies almost certainly didn\u2019t make the cut considering Washington\u2019s national security concerns with sharing advanced AI technologies with Beijing.<\/p>\n<p>In a key speech at China\u2019s top AI conference last week, Chinese President Xi Jinping voiced his disapproval of the United States\u2019 approach, calling for open AI cooperation between nations.<\/p>\n<div>\n<\/div>\n<p>\u201cWe should seize this rare, historic opportunity to encourage open source, openness, collaboration, and sharing,\u201d Xi said. \u201cIn the meantime, we should jointly oppose overstretching the national security concept in the field of AI and placing one country\u2019s security over that of others.\u201d<\/p>\n<p>Read more <a href=\"https:\/\/longhaulmovingpros.com\/?p=1008\">Nintendo Makes It Clear You Were Never Going to Get a Tariff Refund<\/a><\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Treasury Secretary Scott Bessent vowed action in the coming days or weeks.<\/p>\n","protected":false},"author":1,"featured_media":1013,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-1014","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-artificial-intelligence"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - 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