China is launching an investigation into two of its top artificial intelligence labs. The Cyberspace Administration of China opened probes into DeepSeek and Moonshot AI. Reports indicate the companies secretly routed sensitive user data to servers run by Anthropic.
Regulators sent officials to the offices of DeepSeek and Moonshot. Staff and executives faced interviews during these visits. Authorities want to determine if sensitive state-linked corporate, police, and military data reached United States servers.
Anthropic spent much of 2026 accusing Chinese labs of stealing outputs from Claude to train cheaper competitor models. The company stated these startups rerouted user queries directly to Anthropic. This process gave users answers from Claude at a much lower price.
The catalyst for the investigation was Anthropic's fourth threat intelligence report. This 154-page document debuted on September 10. The report targeted seven China-based labs for illicit distillation.
Alibaba, Moonshot, DeepSeek, Zhipu, MiniMax, SenseTime, and Xiaomi appeared in the report. Anthropic defines distillation as training a smaller model using a larger model's outputs. The company objects specifically to performing this action through fraudulent accounts.
The Cyberspace Administration of China initially summoned representatives from all seven named companies. Regulators since narrowed their focus specifically to DeepSeek and Moonshot. Officials have announced no penalties at this time.
The timing creates significant hurdles for both businesses. DeepSeek faces a scheduled briefing before the United Nations Security Council regarding AI risks. DeepSeek will share a stage at the event with Anthropic CEO Dario Amodei. The session happens one day prior to a summit between President Donald Trump and Xi Jinping where AI is slated for discussion.
Moonshot handles its own unique complications. The firm filed confidentially for a Hong Kong initial public offering on September 3. The company targets three billion dollars at a valuation of fifty billion dollars. Any formal regulatory investigation must appear in the prospectus before the listing advances.
The next known step involves the ongoing regulatory review by the Cyberspace Administration of China.
