Treasury threatens sanctions after White House claims Moonshot distilled Anthropic’s Fable

The U.S. Treasury Department is considering potential sanctions against Chinese AI company Moonshot AI following allegations that the firm distilled and repurposed proprietary technology from Anthropic’s Fable model. If confirmed, this action would signal a significant escalation in U.S. efforts to protect domestic intellectual property from foreign unauthorized use. The investigation highlights growing geopolitical tensions over AI development, as regulators weigh whether to use financial penalties to curb the alleged extraction of Western model weights by international competitors.