Startup founders urge Trump not to shut off Chinese open weight AI

Still, administration officials have continued escalating their rhetoric against Chinese AI developers.Treasury Secretary Scott Bessent said Tuesday on Fox Business’ “Mornings with Maria” that the administration would investigate whether Chinese artificial intelligence companies had improperly distilled American models to power their own, saying that the U.S. can “sanction” companies that engage in intellectual property theft.On Wednesday, Kratsios said the administration had information that Moonshot AI distilled Anthropic’s Fable model while developing K3, alleging the Chinese company built “a sophisticated internal platform” to conduct large-scale distillation against American models while attempting to evade detection. Kratsios also alleged that Moonshot had acquired Nvidia GB300-equipped servers to train its models, despite a ban on their sale to Chinese entities.Kratsios emphasized that the administration “strongly supports the free and fair development of AI, including a thriving competitive ecosystem that spans frontier models, specialized systems, open-source frameworks, and open-weight models,” while drawing a distinction between legitimate model distillation and industrial-scale theft.Moonshot has not publicly addressed the allegations.As of Wednesday, the Commerce Department — which maintains a list of companies subject to export controls and licensing restrictions, called the Entities List — had not drafted plans to include Chinese AI companies, according to the first person.The group’s position against banning open weight models also reflects a growing divide inside the AI industry, with heavyweights like Anthropic increasingly urging more restrictions on Chinese AI developers over security concerns, and startups arguing that bans would do little to help, but would put startups at a competitive disadvantage.Little Tech Association Executive Director Harry Godfrey said in an interview that policymakers should use “a scalpel rather than a sledgehammer.”“The answer here would be: What is the lightest-touch way that doesn’t raise costs, limit access or inhibit American innovation while still addressing” legitimate security concerns, he said.Like this content? Consider signing up for POLITICO’s West Wing Playbook: Remaking Government newsletter.