US Claims Moonshot Used Fable Distillation to Develop Kimi K3

US officials allege Moonshot AI built its Kimi K3 model by distilling Anthropic’s Fable, sparking a sharp rebuttal and skepticism among researchers. Michael Kratsios claimed Moonshot ran “large‑scale covert industrial distillation” to clone US frontier models. Moonshot staff countered, noting Fable launched July 1 and K3 on July 15, making such training implausible. Experts argue no evidence supports the claim, stressing distillation alone can’t explain K3’s strength. The dispute fuels debate over AI policing, IP framing, and sanctions.