U.S. Treasury Secretary Scott Bessent attends the 2026 Reagan National Economic Forum at the Ronald Reagan Presidential Library on Friday, May 29, 2026 in Simi Valley, California, USA.
Caroline Breman | Bloomberg | Getty Images
U.S. Treasury Secretary Scott Bessent said Tuesday that the Trump administration will investigate whether China’s artificial intelligence models were derived from U.S. models, saying the government does not support “intellectual property theft.”
China’s open weight model is gaining traction against major products from US companies. OpenAI and humanraising concerns among technology executives and government officials about whether the U.S. lead in the AI race will last. Earlier this month, Chinese startup Moonshot AI released a new model called Kimi K3 that outperforms these companies on some industry benchmarks.
“Especially when we find that foreign models are stealing from our great companies, we have the ability to sanction them for this theft,” Bessent told FOX Business on Tuesday.
Bessent said the technical term for this theft is “distillation,” an AI training method that uses the output from an existing, more powerful model to build a smaller, less capable model. Last month, Anthropic sent a letter to the U.S. Senate Banking, Housing and Urban Affairs Committee alleging that Chinese tech company Alibaba had launched “the largest distillation attack ever known” against the company.
“We’ve found watermarks from the U.S. large-scale language model on many Chinese models, and this is unacceptable,” Bessent said Tuesday. “We’ll be looking at that in the coming days and weeks.”
The United States and China are scheduled to hold talks on AI in September, Reuters reported on Tuesday. Bessent will represent the United States during the talks, the report said.
