US Signals Possible Sanctions on Chinese Open-Source AI for IP Theft

Treasury Secretary Scott Bessent said the US may sanction Chinese open-source AI models if they are found to steal IP from US competitors via distillation, while stressing support for open-source models but not IP theft. He cited watermarks on US models appearing in Chinese offerings and highlighted Moonshot AI's Kimi K3 as a case study, noting ongoing industry debate over government action and the role of open-source in AI competition, with some US firms like Meta, Nvidia, and Reflection AI pursuing open-source work while Chinese models currently dominate.