During the 2026 Reagan National Economic Forum held at the Ronald Reagan Presidential Library in Simi Valley, California, U.S. Treasury Secretary Scott Bessent addressed concerns regarding the potential appropriation of American artificial intelligence models by Chinese companies. He asserted that the Trump administration intends to investigate claims of intellectual property theft and emphasized that such actions are not condoned by the government.
Chinese models, particularly those with open-weight configurations, have begun to challenge the dominance of U.S. firms like OpenAI and Anthropic. These concerns have been heightened recently by the launch of the Kimi K3 model from Chinese startup Moonshot AI, which reportedly surpasses the performance of American counterparts in several industry benchmarks. Open-weight models allow users to access the final trained parameters for download, although the original code and training data remain confidential.
Bessent declared in an interview with Fox Business' "Mornings with Maria" that if evidence emerges indicating that foreign models are appropriating the innovations of American companies, the U.S. government is prepared to impose sanctions for such actions. He defined this appropriation as "distillation," a technique in AI development where a simpler model is created using outputs from a more advanced one. Last month, Anthropic alleged in a letter to the Senate Committee on Banking, Housing, and Urban Affairs that Alibaba, a Chinese technology giant, executed the largest recorded distillation attack against them.
Following a recent Reuters report, it was revealed that the U.S. and China are set to engage in discussions regarding AI in September, with Bessent representing the American side in these talks.
Bessent highlighted that "watermarks" from U.S. large language models have been detected in numerous Chinese AI models, describing this situation as intolerable. He noted that the government will investigate these matters in the near future.
However, it's important to point out that both Anthropic and OpenAI have faced their own challenges concerning allegations of intellectual property theft. Anthropic reached a $1.5 billion settlement in September over a class action lawsuit claiming that it unlawfully downloaded books from pirated sources. Additionally, in 2023, The New York Times sued OpenAI and Microsoft, asserting that they infringed on copyrights by utilizing the publication's intellectual property to train their models.
