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Anthropic said it detected unauthorized efforts by China-based AI labs, including Alibaba and Moonshot AI, to funnel millions of exchanges through its Claude models in order to help train and improve their own competing AI systems. The allegation adds a new flashpoint to the ongoing dispute over intellectual property and model distillation in the global AI race. Separately, at Y Combinator's annual Demo Day, CEO Garry Tan downplayed concerns about AI model distillation, arguing that frontier labs should largely 'do nothing' about the practice rather than treating it as an existential threat. The contrasting reactions highlight divergent views within the AI industry over how seriously to treat allegations that Chinese firms are copying Western AI technology.