San Francisco-based AI giant, Anthropic, has alleged that Chinese multinational conglomerate, Alibaba, engaged in a large-scale and illicit campaign to extract capabilities from its Claude AI model. In a letter sent to two US Senators on June 10th, Anthropic claimed that operators linked to Alibaba utilized thousands of fraudulent accounts to perform nearly 29 million exchanges with the Claude AI, in what it described as the biggest extraction campaign of its kind. The company urged Congress to impose penalties on companies involved in such attacks and strengthen measures to protect US technology from theft. Anthropic accused Alibaba of conducting "the largest campaign to illicitly extract Claude's capabilities" through "distillation attacks," which extract answers from a stronger AI model to train a weaker one. These attacks are said to be carried out on an industrial scale, allowing Chinese companies to harvest and repackage US AI capabilities as their own. The letter also cited other alleged attacks posing a threat to the US military. Anthropic stated that distillation attacks convert American investment in AI research and development into a significant subsidy for geopolitical competitors. The company also referenced claims by the US Department of Defense implicating Alibaba, car manufacturer BYD, and tech company Baidu, which have all denied these allegations. Alibaba recently filed a lawsuit against the US government seeking to be removed from the Pentagon blacklist. Previously, US developers have accused Chinese competitors of using distillation attacks to replicate American AI technology at lower costs. OpenAI has also previously accused Chinese groups of employing the same practice. Anthropic, along with ChatGPT-maker OpenAI, is preparing for a major stock market debut that could make it one of the most valuable companies in the world. However, some of Anthropic's more advanced models have raised cybersecurity concerns due to their ability to target weaknesses in computer systems.