The Trump administration is grappling with how to respond to the rapid advancement of Chinese artificial intelligence (AI) models. A split has emerged within the White House, with some advocates pushing for stricter controls on Chinese AI development that could rival US capabilities, while others in the Commerce Department see such restrictions as impractical.

These tensions came into sharp focus last week when China’s Moonshot AI lab released its Kimi K3 model, a significant player in the global AI race. Senior White House officials have been discussing possible measures to prevent Chinese labs from training their models on US technology through a process known as distillation. This concern was bolstered by recent accusations that Alibaba had carried out what is described as the largest distillation attack against Anthropic.

White House spokespersons did not comment, but Treasury Secretary Scott Bessent warned of potential sanctions for covert distillation, describing it as intellectual property theft. The administration faces a tricky balancing act between fostering innovation and safeguarding domestic technological leadership amid growing concerns about AI security and ethics.