Treasury Secretary Scott Bessent said the Trump administration is examining whether Chinese artificial intelligence models were developed by improperly using American AI systems, warning that sanctions could follow if intellectual property theft is confirmed.
The report said Anthropic recently accused Chinese technology company Alibaba of carrying out what it described as the largest known distillation attack against its models. Bessent also claimed U.S. officials have identified digital watermarks from American large language models in several Chinese AI systems.
According to the report, the United States and China are expected to hold AI-related talks in September. CNBC noted that leading U.S. AI companies, including Anthropic and OpenAI, have also faced copyright and intellectual property lawsuits over their own model training practices.
Reported Tweet:
Bessent says U.S. could sanction China over AI model 'theft' https://t.co/7A1C3oTHF0
— CNBC (@CNBC) July 21, 2026
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