White House accuses Chinese AI firm of evading chip export ban

A White House official has publicly accused Chinese artificial intelligence company Moonshot of circumventing U.S. export controls to access advanced Nvidia processors banned from sale to China.

Michael Kratsios, director of the White House Office of Science and Technology Policy, stated Wednesday that Moonshot "acquired GB300-equipped servers and has accessed GB300s in Thailand, likely to train its AI models." The allegation comes days after Moonshot unveiled Kimi K3, a 2.8 trillion parameter open-source model that matches or exceeds performance of leading systems including Anthropic's Fable 5 and OpenAI's GPT 5.6 Sol on certain benchmarks, according to CNBC, which first reported the accusations.

Enforcement challenges for chip restrictions

Nvidia's GB300 chips sit one generation behind the company's most advanced Vera Rubin systems but remain cutting-edge technology subject to U.S. export restrictions. The allegation that Moonshot accessed these processors through servers located in Thailand highlights a persistent challenge for American policymakers: companies can potentially access restricted hardware through cloud services and data centers outside China's borders.

The Remote Access Security Act, bipartisan legislation that passed the House of Representatives in January, aims to close this loophole by extending export controls to cover remote cloud-based access to critical hardware and software. The bill awaits Senate action.

Distillation allegations compound concerns

Kratsios also claimed the White House has information that Moonshot distilled knowledge from Anthropic's Fable model during K3's development. Distillation allows smaller models to replicate the capabilities of larger systems by extracting knowledge from them—a technique Anthropic has previously described as occurring at "industrial-scale" against its models.

Treasury Secretary Scott Bessent escalated the administration's rhetoric Wednesday, threatening sanctions against Chinese firms engaged in distillation attacks. "When PRC firms conduct covert, industrial-scale distillation attacks that cross the line into IP theft, sanctions and Entity List designations will be on the table," Bessent wrote.

Why it matters

The accusations reveal the practical difficulties of enforcing technology export controls in an era when computing power can be accessed remotely across borders. Even as the U.S. maintains significant advantages in chip manufacturing, Chinese companies appear to be finding workarounds through offshore data centers and knowledge extraction techniques. The incident may accelerate legislative efforts to expand the legal definition of export controls beyond physical hardware shipments—a shift that could reshape how cloud providers operate globally and complicate international AI collaboration.

Keegan McBride, director of science and technology at the Tony Blair Institute for Global Change, noted that Chinese reliance on accessing American processors "demonstrates just how far ahead the US is on compute." While the U.S. reportedly cleared ten Chinese firms to purchase Nvidia H200 chips in May, a top trade official said earlier this month that "very few" had actually been shipped to China and Hong Kong.

A spokesperson for China's U.K. embassy previously told CNBC the country "opposes baseless allegations and malicious smears against its AI development." Nvidia, Moonshot AI, and the White House have been approached for comment.

Details were first reported by CNBC.