China’s Ministry of Commerce strongly responded to the United States on July 27, accusing it of AI hegemonism and promising to take all necessary measures to defend Chinese technological interests. The conflict centers on allegations that AI startup Moonshot AI used large-scale model distillation from Anthropic’s Claude systems to develop its own Kimi K3 system. Anthropic reported over 3.4 million interactions linked to Moonshot through fraudulent accounts back in February 2026. The United States is considering placing Moonshot on the Entity List, a measure similar to the one taken against Huawei in 2019, which cut off the Chinese company from American chips, software, and technology partnerships.
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