Y Combinator's Tan pushes US labs to 'distill' frontier AI models amid Chinese theft claims

In September 2026, Anthropic publicly accused three prominent Chinese AI firms — DeepSeek, Moonshot AI, and Alibaba — of covertly routing user traffic to its Claude model at industrial scale, harvesting outputs to train rival systems in a practice known as distillation. The allegation places a familiar technical method in unfamiliar moral territory, raising questions not merely about intellectual property but about the norms that will govern AI development when competitive pressure outpaces shared rules. What emerges is less a story about one company's grievance than a mirror held up to a worl