U.S. startup founders are urging the Trump administration not to implement broad bans on Chinese open-weight AI, fearing competitive disadvantages. This comes amid escalating rhetoric from administration officials against Chinese AI developers. Treasury Secretary Scott Bessent stated the administration would investigate potential intellectual property theft by Chinese AI companies.

Administration official Kratsios specifically alleged that Moonshot AI distilled Anthropic’s Fable model and acquired restricted Nvidia hardware. He distinguished between legitimate model distillation and "industrial-scale theft," emphasizing support for a competitive AI ecosystem. Despite these allegations, the Commerce Department has not yet drafted plans to add Chinese AI companies to its Entities List.

The AI industry is divided, with some companies like Anthropic advocating for stricter controls due to security concerns, while startups argue that bans would hinder innovation and create an uneven playing field. Harry Godfrey of the Little Tech Association suggested a more targeted approach to address security concerns without stifling American progress.