The model that rocked Silicon Valley last week is now gaining attention in Washington. A senior White House official has accused China’s Moonshot AI of violating US export controls to build the Kimi K3. It reached limited Nvidia chips, he said, and relied on American models to do it.
Kratsios directs the White House Office of Science and Technology Policy. He made a claim on X, Bloomberg reports. Moonshot has “acquired servers equipped with GB300 and access to GB300 in Thailand, possibly to train its AI models,” he said. That violated both US export laws and the labs’ terms of service. The GB300 is part of Nvidia’s Blackwell line, which the US has banned from being sold to Chinese factories.
The case follows months of legal unrest. Trump officials have been investigating whether firms used a loophole to send advanced chips to Chinese subsidiaries abroad. The May memo also confirmed the ban on selling Blackwells to Chinese companies.
The post moved on to the software side. Moonshot shattered Anthropic’s Fable model for building K3, Kratsios said. It used a “sophisticated internal platform” for “large-scale distillation against US models,” changing access methods to avoid detection. Distillation trains a cheap model on competitor results. Kratsios drew a line: legal distillation is okay, secret theft of US technology is wrong. Nvidia and Moonshot did not respond to requests for comment.
Why Kimi K3 is important
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The Kimi K3 is the reason any of this came about. The open-weight model, released last week, quickly climbed the leaderboards. Moonshot claims to trail only Anthropic’s Claude Fable 5 and OpenAI’s GPT-5.6 in overall power. Its arrival triggered a rout in tech stocks, similar to DeepSeek last year, and a wave of alarm in the US.
The fight is already intense
Kratsios was not alone. Treasury Secretary Scott Bessent told Fox Business that Washington could sanction Chinese labs for stealing intellectual property. The complaints follow long-standing claims from OpenAI and Anthropic, which have accused Moonshot of releasing its models in the past.
“This administration supports open source models, but we don’t support IP theft,” Bessent said, as reported by Bloomberg. He later warned, in a post on X, that sanctions and business listings “will be on the table.”
Nvidia’s disclaimer
As concerns grew, Nvidia CEO Jensen Huang took a different side. He called open models like Kimi “excellent” and urged the US to embrace them, not block them, Fortune reported. His case: blocking China only pushes it to build its stack. AI has already done that, with a data center that uses only Chinese chips.
Poles
Time flies. Moonshot is racing to close a funding round of up to $50bn. A Hong Kong listing could follow this year. Targeted US sanctions will not stop the model. Anyone can already download it. But they could keep American money at bay.
Kratsios published no evidence for his claims. The model itself is unquestionable. What has changed is the argument: it is no longer whether China can compete, but how it got there.
