China’s commerce ministry accused the United States of “AI hegemonism” on Monday and warned that it would retaliate, an escalation in a quarrel that started with an accusation of copying and has since pulled in chips, sanctions, and a pair of senior White House officials.

The ministry said Washington was threatening Chinese companies with punishment on the basis of allegations alone, and it cast the whole affair as an effort to hold back China’s technology sector rather than a genuine grievance about intellectual property.

The trigger was distillation, the practice of training a weaker model on the outputs of a stronger one.

White House Office of Science and Technology Policy director Michael Kratsios alleged that the Beijing firm Moonshot AI had distilled Anthropic’s Claude to build its Kimi K3 system, and that it had done so at industrial scale through a purpose-built internal platform designed to dodge detection.

The 💜 of EU techThe latest rumblings from the EU tech scene, a story from our wise ol' founder Boris, and some questionable AI art. It's free, every week, in your inbox. Sign up now!The White House had already put China on notice over the practice, though enforcing any of it remains the hard part.