China accuses US of 'AI hegemonism', threatens countermeasures over potential probes

U.S. Treasury Secretary Scott Bessent later warned that Chinese companies could face financial sanctions or placement on the Commerce Department's Entity List, which restricts access to U.S. technology.

"We support open-source AI and the innovation it unlocks. But open source is not open season on American IP," Bessent wrote on social media platform X.

"When PRC (Chinese) firms conduct covert, industrial-scale distillation attacks that cross the line into IP theft, sanctions and Entity List designations will be on the table," he said.

Moonshot has rejected suggestions that Kimi K3's performance was achieved via distillation, telling China's National Business Daily last week that its performance gains came from original changes to underlying architecture.

Placement on the Entity List could severely restrict Moonshot's access to U.S. semiconductors, software and cloud services. The U.S. used the trade blacklist as a central part of its campaign against Chinese telecommunications equipment maker Huawei beginning in 2019.