![](\"https:\/\/fortune.com\/img-assets\/wp-content\/uploads\/2026\/06\/GettyImages-2280291188_89ad26-e1782503045465.jpg?w=2048\")
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Anthropic has alleged Alibaba found a cheaper way to close the already narrowing AI gap: Not by stealing servers or smuggling chips, but by using fake accounts and innocuous interactions with Claude to extract its capabilities and train competing systems at a fraction of the cost.<\/p>\n
Leading IPO expert Jay Ritter told Fortune<\/em> that Alibaba\u2019s distillation could either strengthen Anthropic\u2019s IPO story by positioning the company as strategic in the U.S-China rivalry or lead investors to question Anthropic\u2019s future profitability if its frontier AI moat isn\u2019t defensible.<\/p>\n \u201cBoth points of view have merit, but I think that second point about affecting profitability would be the dominant one,\u201d he said. \u201cRight now the growth rate of Anthropic\u2019s revenue has been incredible, but how much they\u2019ll be able to sustain that is a big question mark.\u201d<\/p>\n Now Anthropic is turning to Washington for help, with Sarah Heck, Anthropic\u2019s head of policy, urging Congress to penalize China\u2019s behavior through \u201cexport controls on advanced American compute.\u201d<\/p>\n For now, the federal government can\u2019t meaningfully undo the potential damage to Anthropic\u2019s competitive edge through export controls, which are designed to restrict hardware like chips and foreign access to tangible software like Mythos and Fable, but are powerless against the kind of distillation attack Anthropic is alleging.<\/p>\n \u201cQuerying it through an API is not exporting the model, and that\u2019s what the latest controversy has been about,\u201d Kevin Wolf, a former assistant secretary of commerce for export administration, told Fortune<\/em>.<\/p>\n But the Trump administration denounced unauthorized distillation in an April memo that called the alleged efforts of Chinese companies to distill U.S. frontier models \u201cunacceptable.\u201d And with the momentum of Anthropic\u2019s new allegations against Alibaba, reviving the idea of updating export controls to better protect U.S companies is on the table, Wolf added.<\/p>\n He mentioned the Remote Access Security Act introduced last year by Rep. Michael Lawler, R-New York, as an example. It\u2019s sitting in committee now, but with more potential to move forward after Anthropic\u2019s request for better export controls on advanced AI.\u00a0<\/p>\n The bill would crack down on foreign entities like China accessing U.S. tech on a \u201cpurposeful, knowing, reckless, or negligent basis\u201d through a cloud computing service if \u201cthe use of the item could pose a serious risk\u201d to national security.\u00a0<\/p>\n Lawler told Fortune<\/em> in a statement that Anthropic\u2019s capabilities must not fall into the hands of China and \u201cother bad actors.\u201d<\/p>\n \u201cDangerously, that\u2019s exactly what\u2019s happening right now with Alibaba. The sad part is that we knew this was going to happen,\u201d he added. \u201cI\u2019ve been working on my Remote Access Security Act for years to close one of the loopholes in our export control laws that allows our adversaries to access sensitive technology through the cloud.\u201d<\/p>\n If passed, this bill would apply export controls and fill the void of a Biden-era framework preventing China from accessing AI cloud compute and model weights, rescinded by Trump a few days before it was supposed to go into effect.\u00a0\u00a0<\/p>\n Meanwhile, if Alibaba\u2019s AI lab has indeed copied Anthropic, it\u00a0could actually prove Claude\u2019s value as the original and not concern investors that much about profit, according to Harrison Rolfes, a senior research analyst for private companies at PitchBook, who used an analogy of investors looking at used cars versus new ones.\u00a0<\/p>\n \u201cThey probably want the brand new car that has all the bells and whistles and tech involved, even though it\u2019s a little bit more expensive,\u201d Rolfes told Fortune<\/em>. \u201cIf an enterprise is worried about cost, then yes, they can go get a cheaper model, like a Chinese model, but it\u2019s not at a point yet where these enterprises trust using those models, especially U.S. companies.\u201d<\/p>\n That could bolster Anthropic\u2019s appeal to investors ahead of a highly anticipated IPO later this year that could value the company at $1 trillion.<\/p>\n But by calling on the government for help, Anthropic also faces a balancing act to make sure there\u2019s enough regulation to protect the company\u2019s edge over China but prevent overregulation that might hamper its business, according to Rolfes.\u00a0<\/p>\n \u201cRight now they want to play it safe by just saying \u2018hey, we are on your side, and we want to IPO\u2019 and the moment they can IPO, they don\u2019t have to worry as much with what the government says, they can just let the public decide,\u201d he said.\u00a0<\/p>\n<\/div>\n #Anthropics #Alibaba #fight #raises #trilliondollar #IPO #question #defensible #frontier<\/p>\n","protected":false},"excerpt":{"rendered":" Anthropic has alleged Alibaba found a cheaper way to close the already narrowing AI gap: Not by stealing servers or smuggling chips, but by using fake accounts and innocuous interactions… <\/p>\n","protected":false},"author":1,"featured_media":9570,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[4166,8761,536,2054,173,11536,1701,4170,2040,1412,572,5915],"class_list":["post-9569","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance-news","tag-alibaba","tag-alibaba-group","tag-anthropic","tag-anthropics","tag-china","tag-defensible","tag-fight","tag-frontier","tag-ipo","tag-question","tag-raises","tag-trilliondollar"],"_links":{"self":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/9569","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=9569"}],"version-history":[{"count":0,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/9569\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/media\/9570"}],"wp:attachment":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9569"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9569"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9569"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}