Anthropic says Alibaba illicitly extracted Claude AI model capabilities

There's two basic kinds of distillation: 1) the massive [and dumb] method where you ask a question and use the answer as reinforcement (Black Box), and 2) more targeted distillation where you use one model to directly inform/train/guide another model (RLAIF).

The latter is basically fine-tuning the model with direction from another model. Thousands of businesses do this every day to fine-tune. This is almost certainly what the Chinese labs are doing, since it has a much better effect on the end result than just getting simple answers to simple questions.

These complaints of distillation are inflating the problem to make it sound worse than it is, because they want the USG to block/ban Chinese model providers as protectionism. They have already called for more export controls on chips (which is funny because DeepSeek v4 was designed to run on Huawei chips and now the other Chinese providers are following suit). But they can't come right out and say that, so their claim is that they're asking for more export controls because distilled models might not be as safe as their own. But if you show them a jailbreak of their model that bypasses their safety, they'll tell you that any model can eventually be jailbroken so don't worry about safety.

Here's what is happening:

Chinese resellers are offering Claude tokens at 70-90% below official Anthropic API prices. They achieve this by reselling capacity from pooled Claude Max accounts, payments fraud, and also reselling the model output & reasoning chains to various Chinese labs. They are subsidizing model access in exchange for user logs and reasoning traces, which they then sell as training data, allowing them to operate below cost.

Claude and ChatGPT are both blocked in China. You need to use a VPN to access either, and you can't pay with a Chinese bank card. So most people who want access to Claude buy access via a reseller. It's the easiest and cheapest way to access Anthropic models in China.

These resellers operate tens of thousands of bot accounts, which is also why Anthropic introduced identity verification, to slow down the onslaught of bots.

Here's one token reseller, they're offering Opus 4.8 at a 93% discount below official API rates: https://yunwu.ai/pricing?provider=Anthropic

This is one reason why DeepSeek & GLM are priced so cheaply, they are competing with impossibly low token prices in China. They have to keep prices low, in order for people to use them.

I shared this story a few months back, but it never got any traction. It explains the token resale economy in China, it's an excellent read https://www.chinatalk.media/p/how-to-buy-cheap-claude-tokens...

Reminds me a bit of the anecdote of Steve Jobs complaining about people ripping off the Mac GUI, in the mid to late 1980s, when he gave no public acknowledgement to the work done by Xerox on the Alto and Star operating system.

"you're trying to rip off what I've already ripped off!"

Crawl the whole Internet to build a gargantuan sized LLM and then complain you're being copied...

The hypocrisy of Anthropic complaining about "illicitly extracting its Claude AI model capabilities" and supporting the White House's accusation of China "stealing U.S. AI labs' intellectual property on an industrial scale" is hilarious.

Anthropic, OpenAI, Google, Microsoft, et al trained their models by ignoring the rights of copyright holders when harvesting whatever content they could. Now one of them is crying foul for another entity doing exactly what they all did?

Hilarious.

"It [Anthropic] said DeepSeek's operation involved over 150,000 exchanges". In my humble opinion, a mere 150k exchange for an LLM could only be a benchmarking and not a distillation! I think the US companies should accept that after decades they have rivals surpassing them, just like they did Europeans almost a century ago.

>The strike by Alibaba is described as a "distillation" effort, which Anthropic has said involves training a less capable model on the outputs of a stronger one.

Claude used TB of content without permission to train their model and it was ok for them. Now someone else uses the output of a Claude model to train model and they cry foul.

> The strike by Alibaba is described as a "distillation" effort, which Anthropic has said involves training a less capable model on the outputs of a stronger one.

I don't see what's wrong about this.

> Anthropic said the campaign was conducted between April 22 and June 5, 2026, and generated more than 28.8 million exchanges with Claude through almost 25,000 fraudulent accounts.

What makes the accounts fraudulent? If they have paid the agreed price, surely it's fine? If they haven't paid, why did Anthropic provide them service?

I'm looking forward to the trial where Anthropic will have to disclose sources of their training data, and then explain why they are entitled to charging customers for using regurgitated training data but Alibaba which trains their models on Anthropic's models are not.

Should be fun.

Edit: clarification