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# US threatens sanctions against Chinese AI models over IP theft

**[TechCrunch](https://daily.dev/sources/tc)** · 3 min read · 0 upvotes · 0 comments

## Summary

US Treasury Secretary Scott Bessent threatened sanctions against Chinese AI companies if IP theft from American AI models is established, as Chinese open-source models like Moonshot AI's Kimi K3 gain capabilities and threaten US AI firms' business models. The move would escalate existing chip export restrictions to targeting AI models directly. The threat centers on model distillation — a technique to compress large model capabilities into smaller systems — though industry figures like Hugging Face CEO Clem Delangue argue distillation is widely practiced and a minor factor in China's AI progress, attributing it more to strong Chinese research teams.

## Full article

daily.dev links to this article rather than hosting it. Read it at the original source: <https://techcrunch.com/2026/07/21/us-threatens-sanctions-against-chinese-ai-models-over-ip-theft>

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Tags: [#ai](https://daily.dev/tags/ai), [#open-source](https://daily.dev/tags/open-source), [#openai](https://daily.dev/tags/openai)

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