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- "illicitly", Unless they broke in your servers and took your model weights it's not illegal. Hell, you are the guys that pirated all the worlds works, that was actually illegal.Breaking your terms of service is not illegal regardless how much you would like it to be.
And lets not forget they paid you for the tokens.
- What exactly is illicit about what they did?
Legally, model output cannot be protected by IP laws whether domestic or international. The most they can hope for is civil relief which is a stretch given the literally illicit methods they used to train their models.
Ahtoropic got treated the same way it has been treating everyone else. This is the bed they made and now they, too, have to sleep in it.
- Distillation is fundamentally impossible to protect against. All you can do is slow them down. Change my view.
Eventually these Chinese companies will release some extension like Honey, which will sit on top real, non-Chinese clients and send everything to China anyway.
It's over.
- Relevant article - https://www.anthropic.com/news/detecting-and-preventing-dist... (3 labs generated over 16 million exchanges with Claude through approximately 24,000 fraudulent accounts). So extraction in this context is distillation.
While it is obvious to many, a modern LLM is built in roughly three stages: the foundation (pretraining) model, then SFT/supervised fine-tuning (distillation makes it easy), then the RL/RLHF stage on top (most effort-intensive). For today's reasoning models, RL/RLHF is becoming the most compute-intensive part.
Companies like Anthropic spent millions building those fine-tuning examples. A follower can shortcut that on both cost and time by distilling, and it will keep happening: every time the frontier lab climbs higher, others will find a way to shortcut the new gap. There's very little Anthropic can do beyond fraud prevention and blocking accounts that violate their terms of service.
On the policy question, I'm completely against banning Chinese models. I'm a heavy Claude Code user and I'll keep being one. But there should absolutely be price competition. China is eating the rest of the world for breakfast, lunch and dinner on manufacturing, and it did not help to ban them. Frontier pricing can't sit at 10x a capable competitor. It doesn't need to be at par either — demand is higher, and quality, trust, and fewer tokens to finish a task are worth a premium — but 4–5x is defensible.
by bg24 - Reminds me a bit of the anecdote of Steve Jobs complaining about people ripping off the Mac GUI, in the mid to late 1980s, when he gave no public acknowledgement to the work done by Xerox on the Alto and Star operating system.
"you're trying to rip off what I've already ripped off!"
Crawl the whole Internet to build a gargantuan sized LLM and then complain you're being copied...
by walrus01 - I guess "paid to use our model" doesn't sound as sanction-worthy as "illicitly extracted .. model capabilities" and "attacked".
I guess we can say that Anthropic attacked and illicitly extracted data from WikiPedia, Reddit, Stack Overflow, etc, etc.
X.ai attacked and illicitly extracted data from OpenAI
https://techcrunch.com/2026/04/30/elon-musk-testifies-that-x...
Meta attacked and illicitly extracted data from LibGen
https://x.com/jason_kint/status/1879152507865485497/photo/1
And more generally the US-based AI companies have perpetrated a massive distillation attack on the entire human race.
Not that it makes any difference, but I wonder if Anthropic, while claiming that Alibaba "extracted Claude model capabilities", in fact have any clue what Alibaba did with their paid Claude responses. It would seem to amount to industrial espionage if Anthropic do know, although I expect they don't.
- There's two basic kinds of distillation: 1) the massive [and dumb] method where you ask a question and use the answer as reinforcement (Black Box), and 2) more targeted distillation where you use one model to directly inform/train/guide another model (RLAIF).
The latter is basically fine-tuning the model with direction from another model. Thousands of businesses do this every day to fine-tune. This is almost certainly what the Chinese labs are doing, since it has a much better effect on the end result than just getting simple answers to simple questions.
These complaints of distillation are inflating the problem to make it sound worse than it is, because they want the USG to block/ban Chinese model providers as protectionism. They have already called for more export controls on chips (which is funny because DeepSeek v4 was designed to run on Huawei chips and now the other Chinese providers are following suit). But they can't come right out and say that, so their claim is that they're asking for more export controls because distilled models might not be as safe as their own. But if you show them a jailbreak of their model that bypasses their safety, they'll tell you that any model can eventually be jailbroken so don't worry about safety.
by 0xbadcafebee - Here's what is happening:
Chinese resellers are offering Claude tokens at 70-90% below official Anthropic API prices. They achieve this by reselling capacity from pooled Claude Max accounts, payments fraud, and also reselling the model output & reasoning chains to various Chinese labs. They are subsidizing model access in exchange for user logs and reasoning traces, which they then sell as training data, allowing them to operate below cost.
Claude and ChatGPT are both blocked in China. You need to use a VPN to access either, and you can't pay with a Chinese bank card. So most people who want access to Claude buy access via a reseller. It's the easiest and cheapest way to access Anthropic models in China.
These resellers operate tens of thousands of bot accounts, which is also why Anthropic introduced identity verification, to slow down the onslaught of bots.
Here's one token reseller, they're offering Opus 4.8 at a 93% discount below official API rates: https://yunwu.ai/pricing?provider=Anthropic
This is one reason why DeepSeek & GLM are priced so cheaply, they are competing with impossibly low token prices in China. They have to keep prices low, in order for people to use them.
I shared this story a few months back, but it never got any traction. It explains the token resale economy in China, it's an excellent read https://www.chinatalk.media/p/how-to-buy-cheap-claude-tokens...
by tristanj