Analysis
Shares of several Chinese AI companies fell on September 23 after Bloomberg and other outlets reported that Chinese regulators have opened a probe into DeepSeek and Moonshot AI over allegations that both companies secretly routed customer data through Anthropic's Claude models, according to Bloomberg and The Information.
What Anthropic Actually Alleged
Anthropic published a 154-page threat intelligence report on September 10 accusing seven China-based AI companies -- Alibaba, Moonshot AI, DeepSeek, Zhipu, MiniMax, Xiaomi and SenseTime -- of routing customer requests through Claude to harvest its outputs for training their own models, a practice the report calls illicit distillation. The scale Anthropic describes is large and specific: Moonshot allegedly sent more than 23 million exchanges through Claude between May and July, and relayed almost 300,000 customer requests through 5,380 fraudulent accounts in a single 10-day window. DeepSeek's operation, per the report, generated more than 12.1 million exchanges in just a 14-day stretch in July. Anthropic says the intercepted prompts contained names, email addresses, company data and other sensitive information belonging to hundreds of end users across at least a dozen languages, including requests it says came from a Chinese police surveillance system project.
“DeepSeek's operation, per the report, generated more than 12.1 million exchanges in just a 14-day stretch in July.”
Beijing's Response
China's Cyberspace Administration has sent officials to interview employees directly at both DeepSeek and Moonshot, a concrete investigative step rather than a routine statement, according to South China Morning Post. The inquiry is reportedly focused on whether the companies committed security or data-handling violations under Chinese law, separate from -- but triggered by -- Anthropic's own allegations of intellectual-property theft against them.
The Market Reaction
Zhipu (also known as Z.ai) fell 12.4%, MiniMax dropped 4%, and Alibaba -- which Pulse has covered extensively on its own AI buildout -- declined 4.4% on the news, with Xiaomi and Tencent also trading lower amid broader concern that Beijing could tighten scrutiny across the domestic AI sector. That is a meaningful one-day move for companies at this scale, and it reflects investor uncertainty about how far the regulatory response could extend beyond the two named companies -- five other firms remain named in Anthropic's report but not yet confirmed as subjects of the CAC probe.
What This Reveals, And What It Doesn't
The episode is genuinely unusual: a US AI lab's own competitive-intelligence report is now functioning as the evidentiary trigger for a foreign government's regulatory investigation into companies that lab considers rivals. That dynamic complicates the broader US policy argument that restricting frontier-model access to Chinese developers is necessary because those developers can't be trusted with it -- Beijing's response here suggests Chinese regulators also don't want their own companies improperly extracting value from a foreign competitor's model, which is a different concern than the containment argument Washington has made.
What's not yet established is whether Anthropic's technical claims hold up to independent scrutiny, or whether DeepSeek and Moonshot will contest the specific exchange counts and methodology behind them. Neither company has issued a detailed public rebuttal as of this writing, and a Cyberspace Administration probe determining a security violation is a different bar than confirming Anthropic's distillation allegations are accurate in full.
The number that will matter more than today's stock moves is whether the CAC's findings, once public, corroborate Anthropic's specific numbers -- that would turn a single lab's competitive report into an independently verified account of how the illicit-distillation problem actually works at scale.