What Anthropic found
Anthropic released a threat intelligence report on Thursday detailing attempts to turn Claude's answers into training data for other models, which it calls "illicit distillation." The company says that between December 2025 and August 2026 it said it disrupted activity across seven areas, covering areas such as surveillance and influence efforts, scams and fraud, cyber operations, abuse involving biological threats, work related to traditional weaponry, and attempts to copy model outputs for training.
The report also states that "some of these exchanges included sensitive information, including from individual users, major multinational companies, and state-affiliated actors ... These practices are likely inconsistent with privacy laws and the labs' own terms of service."
How the campaigns worked
Anthropic says operators linked to Alibaba leveraged Claude's outputs to train its Qwen models. Anthropic calls it its largest such effort to date, counting over 151 million interactions with Claude from May through July. At the peak, traffic approached 3 million exchanges in a single day, coming from more than 3,500 accounts Anthropic flagged as fraudulent. The report further claims Alibaba tapped Claude to support wider AI research efforts, such as reinforcement learning and model architecture.
For Moonshot AI, the Beijing company behind the Kimi model family, some customer prompts intended for Kimi were silently forwarded to Claude, and users saw Claude's replies while believing they were interacting with Kimi. During a single 10-day span, Moonshot forwarded nearly 300,000 customer requests to Anthropic, and the vast majority were sent to Claude Opus models. Anthropic says the traffic ran through 5,380 accounts it deemed fraudulent, the majority of which seemed to originate from Singapore and Japan.
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Per the report, Moonshot retained at least a portion of those exchanges and pulled Claude's reasoning transcripts to train its own models. Between May and July, Anthropic attributed more than 23 million exchanges to Moonshot. Some forwarded requests included sensitive data, and Anthropic says it does not know whether Moonshot notified customers that their queries were being sent to Anthropic.
Anthropic says DeepSeek used a similar approach, transferring exchanges to Claude without informing its customers. According to the company, there were in excess of 12 million distillation attacks linked to DeepSeek during a 14-day stretch in July 2026. DeepSeek rose to prominence last year for its capabilities and low cost. The report also names several other major Chinese AI companies.
Why it matters for your money
If AI labs are quietly piping user prompts and model outputs across services, the fallout is not just technical. It is legal and reputational, especially when "sensitive information" is in the mix. That can draw attention from regulators and big customers who do not want their data repurposed without consent.
The scale here is hard to ignore: Alibaba-linked activity topping 151 million Claude exchanges, Moonshot's hundreds of thousands of relayed requests in days and 23 million over months, and a two-week burst of more than 12 million attacks tied to DeepSeek. How companies respond could shape partnerships, data-sharing rules and which AI platforms businesses trust for real workloads. For everyday investors, that translates into potential shifts in customer retention, compliance costs and who benefits as clearer guardrails emerge. As of publication, Alibaba, Moonshot, DeepSeek, Xiaomi and Anthropic had not immediately responded to CNBC's requests for comment.
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