Beirut: China on Monday urged the US to stop "smearing" Chinese artificial intelligence (AI) companies and threatening them with sanctions, state media reported. A spokesperson for China's Commerce Ministry stated that such actions lacked factual and legal grounds and were a "typical form of AI hegemony."

According to Anadolu Agency, the spokesperson's comments came in response to reports of senior US officials publicly calling for investigations into Chinese AI companies. These investigations are based on allegations of "distillation" of advanced American models, with potential sanctions considered over the alleged "theft of US intellectual property."

The tensions were further fueled when US officials accused Chinese AI lab Moonshot of distilling its Kimi K3 model from Anthropic's advanced Fable 5 model. This prompted Treasury Secretary Scott Bessent to warn of potential sanctions against the Chinese firm.

The ongoing dispute is part of a broader US-China AI rivalry, with both nations increasingly viewing advanced AI technologies as critical strategic assets and security concerns.