Anthropic accused Chinese tech giant Alibaba of carrying out a large-scale illicit campaign to access its Claude artificial intelligence model. The company said nearly 25,000 fraudulent accounts were involved in over 28.8 million exchanges with Claude between April 22 and June 5, 2026, targeting the AI’s advanced capabilities in software engineering and agentic reasoning [1, 2, 3, 4, 5, 6, 7, 8].

Anthropic described the method used as a “distillation” attack, in which smaller models are trained using outputs from larger, stronger models. The company called this the largest known distillation attack on its technology to date [3, 4, 5, 7, 8].

In a June 10 letter to US Senators Tim Scott and Elizabeth Warren and White House officials, Anthropic detailed the allegations. The letter explained the attack was carried out systematically and at an industrial scale “to harvest US AI capabilities across frontier labs and repackage them as their own without incurring the training and R&D costs required to train US frontier models,” according to the company’s head of policy, Sarah Heck [3, 4, 5, 6, 7, 8].

Anthropic urged greater cooperation between government and industry to combat illicit distillation attacks and called for legislative action to curb such practices. An Anthropic spokesperson said, “We believe combating the threat of illicit distillation requires coordinated action between government and industry, and we will continue working with Congress and the Administration to maintain American AI leadership” [4, 5, 8].

Alibaba did not immediately respond to multiple requests for comment on the accusations [3, 4, 5, 6, 7, 8].

Following the public revelation of these claims on June 24-25, Alibaba’s shares fell sharply. Its stock slipped up to 4.9% to a 16-month low of HK$95.20 in Hong Kong trading, while its US ADR shares declined over 3% to a session low of $99.10. Other Chinese AI and tech companies, including Xiaomi and Baidu, also experienced stock declines amid the negative sentiment [1, 9, 10, 6, 8].

Anthropic previously identified similar distillation attacks earlier in 2026 against its models by Chinese startups DeepSeek, Moonshot, and MiniMax. Alibaba was added to the Pentagon’s Chinese military companies list in June 2026, a designation the company is challenging. Meanwhile, the US Commerce Department has delayed placing DeepSeek on a trade blacklist despite national security concerns [3, 4, 7, 8].

In June 2026, Anthropic announced it is subject to a US export control directive restricting foreign national access to its latest Claude models due to national security considerations [4].