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China’s internet regulator is investigating DeepSeek and Moonshot AI over alleged data routing to Anthropic’s Claude models. The Cyberspace Administration of China launched the reported probe after Anthropic accused both firms of misusing Claude.
The Information reported the investigation on September 22, citing people familiar with the matter. Regulators allegedly focused on potential data leaks involving Chinese users and sensitive information sent abroad.
The probe follows Anthropic’s September threat report, which named seven Chinese companies in alleged AI distillation activity. Anthropic said DeepSeek routed more than 12.1 million exchanges to Claude during 14 days in July.
The company also said Moonshot routed nearly 300,000 customer requests through 5,380 fraudulent accounts in over ten days. Both firms apparently used Claude responses to improve their own AI models.
Anthropic described the activity as illicit distillation, which uses another model’s outputs to improve AI performance. The company said some routed prompts contained corporate, surveillance, police, and other sensitive information.
Moonshot reportedly showed Claude responses to customers while presenting them as Kimi outputs. DeepSeek allegedly relayed requests involving Chinese police systems and national identification numbers.
DeepSeek and Moonshot have not publicly provided detailed responses to the reported investigation. Chinese authorities also have not confirmed the specific allegations or disclosed possible enforcement measures.
Anthropic’s report identified more than 23 million Moonshot exchanges from May through July. It also identified more than 12.1 million DeepSeek exchanges during July.
The dispute adds another layer to growing US-China tensions over artificial intelligence and intellectual property. US agencies recently warned American AI companies about alleged large-scale efforts targeting proprietary model capabilities.
Treasury Secretary Scott Bessent previously said sanctions could follow if evidence verified Chinese model distillation. He said, “We’re going to be looking at that in the coming days or weeks.”
The investigation comes as DeepSeek prepares to brief the UN Security Council on AI risks this week. Reuters reported the meeting will address artificial intelligence and international security concerns.
Any confirmed violations could influence privacy controls, model access rules, and safeguards around sensitive prompts. For now, the reported investigation remains unresolved and awaits findings from Chinese authorities.
Also Read: OpenAI Hacked by Indian-origin Ethical Hackers Using Anthropic’s Claude AI
