Anthropic accused major Chinese AI developers of illicitly extracting capabilities from its Claude model to train their own systems. The report details massive-scale distillation campaigns involving Alibaba Group Holdings, Moonshot AI, and DeepSeek.

Scale Of Alleged Distillation

The threat intelligence report released on Thursday identified unauthorized, large-scale extraction activities that went beyond ordinary model use. Anthropic termed this activity "illicit distillation," where responses from a more capable model are used to train another system.

Alibaba Group Holdings was identified as the largest offender. Between May and July, the company allegedly generated more than 151 million exchanges with Claude. This activity peaked at nearly 3 million exchanges per day across more than 3,500 fraudulent accounts. Anthropic stated that Alibaba used these outputs to train its Qwen models and for reinforcement learning research.

Moonshot AI, the developer behind Kimi, was accused of routing customer requests to Claude without user knowledge. Nearly 300,000 requests were relayed during a single 10-day period. DeepSeek faced accusations of similar activity, with over 12 million distillation attacks observed over 14 days in July.

Industry Reaction And Privacy Concerns

Futurum Group CEO Daniel Newman criticized the narrative surrounding Chinese AI development. He alleged that some Chinese "Open Weight" models rely heavily on lifting capabilities from U.S. frontier labs rather than independent development. Newman described the practice as "freaking insane" and suggested it explains the rapid advancement of certain Chinese models.

Anthropic noted that intercepted requests contained sensitive information, raising privacy and terms-of-service violation concerns. The report covered activities across cyber operations, surveillance, scams, biological misuse, and weapons development. Alibaba, Moonshot, DeepSeek, and Xiaomi did not immediately respond to requests for comment.

Anthropic has ended its association with the Information Technology Industry Council (ITIC) following the group's support for legislation aimed at curbing foreign access to US chips.

The decision reflects growing friction within the technology sector regarding export controls and supply chain security. The specific legislative measure cited by Anthropic seeks to limit how non-US entities can utilize American semiconductor hardware.

This move highlights the diverging priorities between AI developers and broader industry lobbying groups on regulatory matters. No financial figures or operational metrics were disclosed in the announcement.