Anthropic PBC accused Chinese technology giant Alibaba Group Holding Ltd. of waging a large-scale effort to “illicitly” access its Claude artificial intelligence model using thousands of fraudulent accounts that undermine the U.S. AI developer’s decision to keep its products out of China.

Anthropic claimed that a campaign by operators linked to Alibaba’s Qwen AI lab targeted Claude’s most prized capabilities, including software engineering and agentic reasoning, according to a letter that the AI startup sent to several U.S. senators and White House officials. The company said it was the biggest attempt so far by a Chinese company to piggyback on the work of top U.S. labs.

In its letter, Anthropic claimed that the effort involved 28.8 million exchanges with Claude between April and June through almost 25,000 fraudulent accounts, according to people familiar with the document and a copy seen by Bloomberg News. The company said the Alibaba campaign resembled past efforts by other Chinese developers that Anthropic flagged in a blog post earlier this year.

Alibaba’s American depositary receipts sank to a session low on the news, falling more than 3% to $99.10 at 3:38 p.m. in New York on Wednesday.

Anthropic warned that Alibaba and other Chinese labs are making systematic and unauthorized use of results from leading U.S. models to develop a rival generation of chatbots at a fraction of the cost via a practice known as adversarial distillation. It cautioned that AI systems built using this method often lack safety guardrails, and the firm urged the Trump administration to step up efforts to halt the practice.

“These distillation attacks are carried out illicitly, systematically, and at industrial scale to harvest U.S. Al capabilities across frontier labs and repackage them as their own without incurring the training and R&D costs required to train U.S. frontier models,” Anthropic wrote in its letter.

Alibaba had no comment. An Anthropic spokesperson declined to enter into specifics on the letter but emphasized the importance of combating distillation through “coordinated action between government and industry.”

Anthropic’s letter marked the latest call from top American AI companies to rein in some kinds of distillation, where developers train systems using results from another AI model to create similar capabilities in a new one at a far lower cost. While tolerated for training smaller, less-advanced systems, distillation violates AI labs’ terms of use when it’s employed to replicate a cutting-edge AI model without permission.

The practice has alarmed U.S. developers to the point that Anthropic, OpenAI and Alphabet Inc.’s Google have joined forces to share information about distillation attempts that violate their terms of service. Anthropic and OpenAI have each warned that Chinese AI startups, including DeepSeek and Minimax, have employed distillation to develop their own models.

Lawmakers in Washington are moving to address the U.S. industry’s concerns. In the Senate, Tennessee Republican Bill Hagerty and New Jersey Democrat Andy Kim plan to introduce an amendment to must-pass defense legislation as soon as Wednesday that would blacklist or sanction any Chinese firm found to be improperly accessing U.S. AI model output to help train competing models, according to a person with the matter.

It’s unclear whether the amendment would win enough support to be included in the defense bill’s final version. A related bipartisan bill in the House, backed by Michigan Republican Bill Huizenga and Democrat Sydney Kamlager-Dove, is also set to be considered for inclusion in the annual defense measure.

Those proposals follow initial steps by the Trump administration on the issue. In April, White House Office of Science and Technology Policy Director Michael Kratsios published a memo indicating the U.S. would help to crack down on attempts by Chinese companies to exploit outputs from U.S. models. The memo described it as different from legitimate research practices due to its “industrial scale” and reliance on thousands of proxy accounts.

Anthropic said that the Alibaba campaign took place after Kratsios released his memo, in defiance of the administration’s warnings. It cautioned that a failure to respond to such attempts risks letting China gain ground on the U.S. in AI, posing a threat to national security.

The claims against Alibaba add to growing political pressure in Washington on the company, which earlier this month was added to a U.S. Defense Department blacklist of businesses that allegedly support China’s armed forces — a development cited in Anthropic’s letter. Alibaba has insisted it has no affiliation with the Chinese military and sued the Pentagon this week to win removal of the designation.

For Anthropic, the threat of cheaper imitation products from China that siphon away customers looms large as the company, now valued by private investors at $965 billion, prepares for an initial public offering. U.S. officials have estimated that unauthorized distillation costs Silicon Valley labs billions of dollars, Bloomberg has reported.

With its letter, Anthropic is urging the U.S. to clarify antitrust guidelines to allow more information sharing by U.S. companies on distillation. It reiterated the company’s support for export controls on advanced AI chips and asked for the U.S. to penalize firms using distillation to glean valuable information for creating their own models.

Anthropic’s calls for additional government support in countering what it sees as unfair practices by Chinese rivals may not find a fully receptive audience with the White House. The company is embroiled in a fresh dispute with the Trump administration, which less than two weeks ago imposed export controls on Anthropic’s top two models, citing security concerns.

Even after meetings between Anthropic’s top technical staff and White House officials last week, little progress has been made to ease tensions and restore service to the company’s Fable 5 and Mythos 5 AI systems. The company disabled access to the models more than a week ago, after the Commerce Department imposed restrictions to block foreign persons from using those AI tools.

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