U.S. Treasury Secretary Scott Bessent threatened to impose sanctions on Chinese AI firms deemed to have stolen intellectual property from American technology companies, stating on Fox Business yesterday (Tuesday), “This administration supports open source models, but what we do not support is IP theft.” This comes as Chinese AI models threaten to upend the tech industry; Moonshot AI released Kimi K3 this week, which performs well despite not having access to state-of-the-art computer chips. According to TechCrunch, American companies have been warning the White House for months that foreign firms might copy their AI technology. Earlier this year, Anthropic accused Moonshot and two other Chinese AI firms, DeepSeek and MiniMax, of “illicitly” extracting Claude’s capabilities via distillation. Bessent also noted that watermarks of American LLMs have been discovered on Chinese AI models, and added the Trump administration will be looking into the matter in “the coming days or weeks.” Axios reported this week that the government is mulling a total ban on Chinese open source models.