China warned on July 27 that it would take all necessary measures to protect its AI companies and national interests against threatened US sanctions. Washington put Chinese AI labs on notice, particularly regarding Moonshot AI’s Kimi K3 model with 2.8 trillion parameters, whose capabilities are allegedly extracted through distillation from Anthropic’s Claude 5 model. US Treasury Secretary Scott Bessent indicated that sanctions or Entity List designations could follow if violations of US intellectual property laws are confirmed. This dispute marks a major shift in the US-China tech rivalry, moving from semiconductor restrictions to accusations of intellectual property theft on AI models.
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