OpenAI and Anthropic had already been working with the US government to test unreleased AI modelsWASHINGTON: China's Moonshot AI stole from Anthropic's most sophisticated AI large language model, Fable, to help create its latest K3 release and has acquired advanced Nvidia AI chips, top Trump administration tech official Michael Kratsios said Wednesday. Large-scale, covert industrial distillation aimed at stealing proprietary US technology and undermining research is unacceptable," Kratsios said.US treasury secretary Scott Bessent said Wednesday in a separate post on X that he was considering adding Moonshot AI to a trade blacklist and imposing sanctions. The Trump administration's accusations will likely ramp up tensions over technology issues between Beijing and Washington .Spokesperson Liu Chang of the Chinese embassy in Washington called Kratsios' comments "entirely unfounded," adding that China respects intellectual property protections. "Relevant individuals in the US should respect the facts, discard prejudice and stop smearing and discrediting China's achievements in the development of its AI industry," he said.(This is a Reuters story)