Bessent Says Trump Administration Will Scrutinize Open Source AI Models For IP Theft Amid Kimi K3 Buzz — ‘We Have The Ability To Sanction Them’

• Bessent also said that another question arising from this is whether U.S. companies should disclose if they are using Chinese AI models.
• He added that the more important aspect of this is whether Chinese AI models are stealing IP from frontier model developers in the U.S.
• Bessent also left the door open for sanctions if the Trump administration finds that open-source AI models have stolen intellectual property from U.S. companies.

Treasury Secretary Scott Bessent on Tuesday said that the Trump administration will scrutinize open-source AI models to check for evidence of intellectual property theft.

During an interview with Fox Business, Bessent said that while the Trump administration supports open source AI technology, it does not support IP theft.

“If we see, especially, that overseas models are stealing from our great companies, we have the ability to sanction them because of this theft,” he said.

Finding Watermarks Of US LLMs On Many Chinese Models, Says Bessent

Bessent added that the U.S. government is finding the watermarks of large language models built in the United States on many AI models coming out of China. “That’s unacceptable… so we’re going to be looking at that in the coming days or weeks,” he said.

Bessent said that another question arising from this is whether U.S. companies should disclose if they are using Chinese AI models. “You can’t use counterfeit goods,” he added.

However, Bessent said the more important aspect of this is whether Chinese AI models are stealing IP from frontier model developers in the U.S.

“They have hundreds of millions of hits against the large language models here in the U.S. They try to reconstruct their code and their thought process of the models and that’s unacceptable,” he added.

Bessent’s comments come amid the launch of Moonshot AI’s Kimi K3 model last week. Data from Artificial Analysis shows that Kimi K3 costs $0.95 per Intelligence Index Task, while OpenAI’s GPT 5.6 Sol (max) costs $1.04, and Anthropic’s Claude Fable 5 (with fallback) costs $2.75.

Bessent Sees AI Boom Boosting Industrial Supply Chains

The Treasury Secretary expressed optimism that the ongoing AI boom will benefit industrial supply chains in the U.S. “It will be industry by industry, but it will be all along the supply chains… It will be inventory management, [helping] in optimizing inventory… it will be in employee productivity,” he said.

Bessent added that AI is not taking anyone’s jobs, while saying that companies that have undertaken large-scale AI implementation have added jobs at a relatively faster pace.

“It is important, especially for younger people, that the person who will take your job is someone who knows how to use AI,” he said.

Meanwhile, U.S. equities gained in Tuesday’s opening trade. At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was up 0.32%; the Invesco QQQ Trust ETF (QQQ) surged 1.12%; and the SPDR Dow Jones Industrial Average ETF Trust (DIA) rose 0.13%. Retail sentiment on Stocktwits regarding the S&P 500 ETF was in the ‘bearish’ territory.

Also See: DDOG Stock Has Surged 94% This Year So Far — Jefferies Believes This Leaves Little Room For Slippage Ahead Of Q2 Earnings

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