Key points
- China's internet regulator is examining DeepSeek and Moonshot
- The trigger is Anthropic's own distillation report
- The concern is Chinese data reaching US servers
- No penalties have been announced
China's internet regulator is examining whether DeepSeek and Moonshot AI sent sensitive domestic data to Anthropic's U.S. servers, The Information reported September 22. The report by Qianer Liu and Jing Yang said the Cyberspace Administration of China is reviewing the alleged transfers.
The review follows Anthropic's own disclosure this month. In a threat-intelligence report, the company said seven China-based labs ran distillation against its Claude models, attributing 151 million Claude exchanges to Alibaba (BABA), more than 23 million to Moonshot, and more than 12 million to DeepSeek over 14 days in July. Anthropic said Moonshot and DeepSeek went further and routed real user requests to Claude without telling those users.
What China is examining
According to The Information, the Cyberspace Administration summoned the seven companies Anthropic named, which include Alibaba, Xiaomi, SenseTime, MiniMax, and Zhipu, before narrowing its focus to Moonshot and DeepSeek. The concern, the report said, is cross-border data security rather than model copying. China regulates cross-border transfers of sensitive and "important" data. The Information reported that the regulator is examining whether the alleged routing created a data-security issue under those rules. The report said the review is continuing.
What Anthropic said was exposed
Anthropic said that in one 10-day period Moonshot routed about 300,000 real user requests to Claude. According to the same report, the data sent to Claude included surveillance material submitted by a user Anthropic suspected of ties to the People's Liberation Army, valid credentials from engineers at Chinese state-owned enterprises, and information from police case-management systems. These are Anthropic's characterizations, and the company did not publicly name the specific users or agencies involved.
Which companies are public
The two labs at the center of the review, DeepSeek and Moonshot, are both privately held. Of the other five companies Anthropic named, Alibaba trades in the US as an ADR, and Xiaomi, SenseTime, Zhipu, and MiniMax are all listed in Hong Kong. China's Commerce Ministry has rejected the broader US distillation allegations as lacking factual and legal basis, and has described distillation as a neutral technical method. The Information reported that the review focuses on potential cross-border data exposure, rather than Anthropic's distillation allegations. No penalty has been announced. The technique itself is covered in this explainer on what AI distillation is, and Alibaba's price history sits on its stock page.
