China's CAC Probes DeepSeek and Moonshot Over Routing Data to Claude

China's Cyberspace Administration of China (CAC) is investigating DeepSeek and Moonshot AI following allegations from Anthropic that both companies secretly routed millions of user requests to Claude and used the responses as training data for their own models, a practice Anthropic calls illicit distillation. The CAC initially summoned representatives from seven companies named in the original report, including Alibaba, Zhipu, SenseTime, MiniMax, and Xiaomi alongside DeepSeek and Moonshot, but has since narrowed its focus to DeepSeek and Moonshot specifically. Anthropic alleges Moonshot sent over 23 million requests to Claude between May and July, and DeepSeek sent 12.1 million over a 14-day period in July. The routed prompts allegedly contained names, email addresses, company data, and information from state-affiliated actors, including data from engineers building a case system for a Chinese police bureau. The probe is ongoing and no penalties have been announced.