tl;dr:
- every govt has the same incentive here…juice the domestic labs, constrict the foreign ones. whether the stated reasons (“distillation”) are true or not matters way less than what they actually justify...expect a rotating cast of reasons for the foreseeable future
- this leads to the fragmentation of users & models/agents/etc. across geopolitical borders. basically no one will be able to use each others stuff so you end up overpaying for shittier intelligence
- blockchains have been weirdly good at this one thing re: solving fragmentation by having a global substrate where diff entities can run diff parts of the chain and still be ‘compliant’ w/ local regs
- …btc and eth have held that line for over a decade wrt money. we’re doing the same now for intelligence.
- and, to be clear, if your model access runs through one company's api and you’re running all your own infra, you're just a web2 company with a token. the wall that just hit the CN models will hit you too, just later and with worse margins.
so either intelligence ends up:
1) infinitely walled into national silos or
2) embedded into a chain that doesn't live in any one country
we're building for 2.
We have information that Moonshot AI distilled Anthropic’s Fable for the development of its K3 model.
To do this they developed a sophisticated internal platform to conduct large scale distillation against U.S. models, allowing them to quickly switch between multiple methods of access to avoid detection. Moonshot AI has also acquired GB300-equipped servers and has accessed GB300s in Thailand, likely to train its AI models.
The United States 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. Legitimate AI distillation used to create smaller, more efficient models plays a vital role in this open innovation ecosystem. However, large-scale, covert industrial distillation aimed at stealing proprietary U.S. technology and undermining American research is unacceptable.