China probes DeepSeek and Moonshot over alleged data leaks to Anthropic's Claude

China's Cyberspace Administration is investigating DeepSeek and Moonshot AI over alleged secret transfers of sensitive user data to Anthropic's servers. The Information reported the investigation, citing people familiar with the matter. Officials reportedly visited both companies to interview executives and staff. Regulators are examining whether police, military, and state-linked corporate data reached U.S. servers. Anthropic accused Chinese labs of stealing Claude's outputs to train cheaper rivals for most of 2026. Anthropic also claimed the startups rerouted queries to its systems, which gave users Claude answers at a fraction of the price. The investigation followed Anthropic's fourth threat intelligence report. Anthropic published the 154-page report on September 10. The report accused seven China-based labs of what Anthropic calls illicit distillation. The companies named were Alibaba, Moonshot, DeepSeek, Zhipu, MiniMax, SenseTime, and Xiaomi. Anthropic says distillation is legitimate on its own. Anthropic objects to using fraudulent accounts for the practice. The CAC initially summoned representatives from all seven companies. The CAC later narrowed its focus to DeepSeek and Moonshot. No penalties have been announced. DeepSeek is scheduled to brief the United Nations Security Council on AI risks this week. Dario Amodei is scheduled to share the stage with DeepSeek. The session is scheduled one day before Donald Trump's September 24 summit with Xi Jinping. AI is reportedly on the summit's agenda. Moonshot confidentially filed for a Hong Kong IPO on September 3. The filing targets $3 billion at a $50 billion valuation. Any disclosed regulatory investigation would need to appear in the prospectus before the listing can move forward.