China Probes DeepSeek and Moonshot Over Alleged Data Leaks to Anthropic's Claude

China's Cyberspace Administration summoned seven AI firms over Anthropic's "illicit distillation" claims, then narrowed the probe to two. The Cyberspace Administration of China is now investigating DeepSeek and Moonshot, according to The Information, after summoning representatives from all seven labs named in Anthropic's 154-page threat intelligence report published on September 10.

The decisive detail is the scale of the alleged misuse. Anthropic alleges Moonshot routed more than 23 million exchanges to Claude through 5,380 fraudulent accounts. The same report alleges DeepSeek generated more than 12.1 million exchanges in a 14-day window in July. Both claims remain unconfirmed by a second document, but they form the basis of the regulatory action.

Officials reportedly visited the offices of both companies to interview executives and staff, seeking to determine if sensitive police, military, and state-linked corporate data ended up on U.S. servers. No penalties have been announced, and the CAC has not stated whether the investigation will expand.

Moonshot confidentially filed for a Hong Kong IPO on September 3 targeting $3 billion at a $50 billion valuation, "and any disclosed regulatory investigation must appear in the prospectus before the listing can move forward" according to the source article. A Yahoo Finance analysis notes the probe may deter international institutional investors, potentially shifting the capitalization burden to domestic state entities like China's $8.8 billion National AI Industry Investment Fund. For DeepSeek, the timing collides with a scheduled briefing to the UN Security Council on AI risks this week, occurring just before President Donald Trump's September 24 summit with Xi Jinping, where AI is reportedly on the agenda. The picture changes if the CAC issues formal penalties or if either firm's disclosures trigger a market reaction in their respective listing or diplomatic contexts.