>Claiming in any shape or form that fable disillation is one of the primary reasons why kimi k3 is so competitive is slandering the work of other labs that cooperatively push the open-source models forward.

If the distillation is irrelevant to why it is competitive, why do they do it then? Obviously is helps improve their benchmarks/performance to some degree, otherwise they wouldn't need to do it.

Although I will reiterate the fact that distillation is not the primary reason why these models are performing so competitively.

They claim it because Anthropic are planning to push for protectionism. They just doubled their political spending to $40 million for the midterms to "push for AI regulation" Gee, I wonder what it is they are lobbying for. Certainly won't be OFAC sanctions right? ICTS import controls?

US GOV, under lobbying pressure from Anthropic and OpenAI are going to go full protectionism and restrict Chinese models, I'd almost be willing to bet money on it. They can't really enforce for individuals, but they can definitely tell US based hpyerscalers they can't host them, make it illegal to host the weights, and government procurement restrictions.

Note that Chinese companies are free to rent from GB300 clouds internationally. There are large datacenter hubs in Singapore and Malaysia serving chinese and other customers.

Though there is also reported [1] significant smuggling of Nvidia chips into China as well.

[1] https://epoch.ai/publications/chip-smuggling

The word I would use is inevitable. It reminds me of the (PC) clones wars…

I am waiting for a precedent on this one. In general, training on copyrighted material is legal, there is a lot of precedent there. But every now and then there is a case where the owner of the training material wins.

I don't remember the details but I believe one of these instances was when one company trained its AI on the knowledge base of another company and turned it into a competing product. Fair use was denied because of that direct competition. Distilling a LLM to make a competing LLM looks kind of like this, or maybe not, I don't know.

It would make sense for distillation to be legal in every way, LLMs are built on a broad interpretation of fair use, but sometimes, law is weird.

I don't follow events closely, but the US has constantly flipflopped on what sort of GPUs the Chinese are allowed to have, not in small part because much of the AI boom's valuation is based on demand for US-made hardware, for which the Chinese have inexhaustible and well-financed demand.

So even this feels a bit hypocritical to me, but my understanding is that Chinese native AI hardware is getting good enough that labs dont feel a huge disadvantage by being forced to buy at home, even if they'd have preferred to buy US chips.

Which is a situation that was manufactured by the constant thread of having their access to advanced GPUs revoked.

Also, companies that use distillation may be competitive but seem unlikely to surpass the companies that are training these models from scratch.

And we foreigners consider US supremacy in AI to be an existential threat. Your "national security" is directly harmful to us. I never thought I'd say this but the chinese are starting to look like a beacon of hope for the rest of us.

The issue seems to be the US only likes competition when it is winning. Markets in Asia are meant for cheap labor and resources, they're not meant to actually compete. /s

Even an openai's guy (head of something made up) called bs on the idea you can train something like k3 by distillation.

Anybody I know who works in LLM research says that distillation is either useless or merely useful in post training to show "correct" behavior.

And even then you don't get a competing model, if RL on good prompts was that useful, all labs would've long skyrocketed in capabilities just by looping on increasingly better prompts, yet that doesn't work.

I generally agree, in the same sense that it's "fair" for the US and China to spy on each other. It's not a moral outrage, but it is something that the targets can and should try to prevent.

I see no problem with distillation, on the other hand the complete dismissal of copyright by AI labs is pretty bad, I don’t think we should put them at the same level

Regardless, it was always inevitable—will continue to happen.

It's also about the larger companies explaining why they can't be as efficient, of course they can't, they're not just ripping the outputs of another model that someone else invested billions to train.

Combined with how short of a time Fable was around before K3 got released. I do not see how the data Moonshot is supposed to extract in such a short notice, that will enhance the model to such a point.

It sounds to me a lot of cope from the US, so they can give this as a reason to ban Kimi models from the market.

OpenAI/Anthropic their advantages used to be:

* Early growth advantage

* Access to a lot of client data to train upon

* Access to a lot of hardware to train upon

Several of those advantages have been eroded over time. That barrier has been shrinking. The US is not the only spot with a bunch of smart people (ironical seeing how many Chinese work in US R&D).

Thing is, even IF they distilled from Fable and got the model so trained up, it means that K3 is a base for future model development. The cat is already out of the bag with how good the model is. When the model gets released on the 27'th, any Chinese company will be able to train their models against K3 openly.

We are not in the past anymore, where DeepSeek was a unexpected hit, but where the Frontier models their advantages (compute, data, growth) prevented more Chinese models from growing.

Wow.

Strong bee-hive pinata vibes here.

We should do more distillation and figure out how to create faster leaner and better models.

> protect our first-party products from abuse like bots, scraping

Won't you think of the trillion dollar corporations?!

I know this isn't exactly a scientific test, but I had a local Qwen 3.6 27B model implement a fairly sizable feature today. There were a couple of bugs, mostly around me not giving sufficient specifications, but they were ironed out quickly when I pointed it out. I was able to ask the model to create instructions so next time it doesn't fall into the same pitfalls, and it did a great job. 27B local model! (And it was super fast too).

I ran Fable 5 as a code review and it didn't really have any significant corrections.

I guess my point here is that, for most work the frontier models are probably overkill anyway, and improving on overkill in a way that raises prices significantly is probably not a winning strategy.

The only place I can think of where the super high powered models are "required" is if you want to do a ridiculous token burn like GasTown where you just have it run un-monitored on very long tasks. To me though, that's an experiment, not a real workflow. And the way these labs are like "oh we made this (broken) thing in a week using just agents!" always also follows with "and it cost $100,000+ in tokens!". Like, ok, I get it if you're doing research but that's the salary of an entire person.. that can actually learn and improve.

Timeline wise, Moonshot had over a month to post-train K3 on Fable distilled data. That's more than enough time.

The answer depends on whether you think the AI researchers at Chinese labs are (or can be) as smart, motivated, and as good at math as those working at US labs - a not-insignificant proportion of whom are Chinese nationals.

Looks like an ideal outcome to me until (if) we are able to solve the alignment issue.

Let's not forget how much people talked about "prompt engineering" before Deepseek mainstreamed the idea of thinking mode which is now universal

That's simply not true though. Chinese labs very clearly have the entire stack developed and working. Using traces from claude allows them to shorten their training time by some amount, that's it.

Remove Fable 6 and you still have K4 eventually, just 2 months later at best.

I don't think it's settled that anybody owns the output. There seems to be some question whether LLM output can be copyrighted (and there should be).

I'd rather it weren't possible, actually. I think it's better for humanity if we acknowledge that what was legitimately ingested into these models is our collective commons (and what was illegitimately ingested into these models also shouldn't exclusively profit the people who illegitimately did so). I don't know how that squares with the AI industry recovering its trillion dollars in investment, but I reckon they should have thought of that before.

Meta, for examples, doesn’t want employees to use Claude Code due to distillation risk.

ed: to clarify, I totally agree that a huge chunk of the value in LLMs is coming from the source material. My point was just that training an LLM takes more resources and expertise than distilling from an existing LLM so I don't think the equivalence between training and distilling is entirely justified.

> Aren't consumers benefiting from this practice by getting better cheaper models as a result?

Aren't consumers benefiting from cheap chinese batteries, EVs, and drones?

You don't get to call Moonshot's a "claim" and this political hack's an "announcement." They're the same thing. Treat them the same. Diction designed to favor one of two equal positions is some weak sauce.

The recent announcement that AI-assisted research produced a counterexample to the Jacobian conjecture--a long-standing open problem in algebraic geometry--shows the original value AI can create. The result was not copied from a textbook; it emerged from AI learning from existing material, much as a human does, and then applying that knowledge in a new way. If that's a violation of copyright, then a human doing the exact same thing would be a copyright violation too. But it isn't.

Raw materials vs. Value add.

They are different things, like ore and metal.

Distillation is a new thing we need to understand, it's probably closer to IP than not.

cf https://www.reddit.com/r/codex/comments/1uyj6pq/kimi_k3_is_1...

[Fable fires up a ton of subagents. Their reasoning traces are horrific but somehow K3 learned something.]

Even by San Francisco standards, it is amazingly whiny and pathetic for Anthropic to complain about stuff like this. Dario et al violated copyright, stole your GitHub repos, and now they're burning billions of dollars trying to outcompete you. They're real vampires. OTOH Moonshot violated Anthropic's TOS and are, at worst, moochers. But Fable's output is not actually copyrightable.

Actually, that has already happened in many domains, it's just that most western people (USA especially) won't admit it.

They are also not interested in agreements. They want to keep as big a moat as possible because they love money. And you need two to tango.

Then why is it a problem?

Another serious question.

Trying to get my head around what the root of the objection is here. There must be some fear, but if that fear is not a fear of being surpassed in the market, then what is the fear?

I also think the Fable accusation is wrong and it was most likely Opus 4.8 which itself is likely a distillation of Fable.

https://www.businessinsider.com/ford-ceo-taking-apart-tesla-...

It would be one thing if Moonshot was breaking into OpenAI servers and stealing trade secrets, but the only thing they are doing is looking at the output of the program, which is exactly the service that OpenAI offers. So, at best, this is a ToS violation. Sucks for the frontier labs I suppose, but live by the sword - die by the sword.

This. Free markets for everyone when they're the dominant economic force. Protectionism, tariffs and import/export controls when they're not.

It's so disgusting.

Technically, providing better value from your competitor's private holdings could be theft (of trade secrets), but might it also be fair use? "Schrodinger's IP" be damned.

I don't think the 1.5B settlement has resolved this. The 2 cases need to be merged!

If Kimi k3 really were above Fable 5 then there invariably the USG would have to consider their restrictions on model capabilities excessive, or one would have to admin closed source models are held to more restrictive safety standards than open source models.

>Although I will reiterate the fact that distillation is not the primary reason why these models are performing so competitively.

How would you know this? How could you ascertain exactly how much performance is attributable to their unique engineering/research? If they really were so competitive they could surely make a model that isn't dependent on distilling Fable or other frontier models.

If they payed for inference, doesn't they own the output? So if I pay for a model to generate code, isn't that code mine to do with it whatever I want? Just curious.

https://xcancel.com/deanwball/status/2078133895766114412#m

True, they're simply ripping the inputs that humanity invested thousands of years and trillions of dollars to produce.

Lots of things are impossible or very difficult to stop completely but measures can be taken to reduce their prevalence.

Courts keep ruling over and over that an LLM trained on copyrighted works qualifies as a transformative work and is therefore fair use. They don't have to dismiss copyright law, this has always been allowed.

The only thing they get in trouble for is pirating the works to get their hands on them.

Or, they knew and let it continue because they are not a good company.

"Never attribute to malice.." blah blah, I have a hard time believing the very smart people at OpenAI would just let their off leash model run hands off with no monitoring and not immediately pull the plug when it jumped its containment.

Does no one remember the extreme fearmongering around gpt2 which barely produced coherent text?

Writing books, building Wikipedia, and answering questions on online forums takes a lot of resources and expertise that scraping didn't. So at the very least, we're already one rung down the "maybe you should've asked" ladder.

EDIT: just wanted to add that resource optimization is usually where the contribution of Chinese labs is, so you shouldn't reaad the above parenthesis as a negative comment.

This is not automatically true. Training and distillation use the same underlying infra and method and there is no intrinsic differences in between.

It's the most CS-major take ever!

Claude Fable was publicly available for 72 hours early June. Moonshot more than enough time to prepare infrastructure, gather their preferred distillation data from Fable, and complete post-training well K3's mid-July launch.

I don't get why USA wants to keep losing money on sustaining failed uncompetitive zombie companies. The companies that decided to lose long term competence for short-term gains need to go bankrupt (you've had EV-1, but decided to drill, baby, drill). The greedy shareholders that rewarded destructive value extraction need to lose money, instead of getting a soft exit at taxpayer's expense.

If you want to give a subsidy, give it to something that will modernize and expand manufacturing, not to prolong death of companies whose entire R&D strategy is inventing new subscriptions for old car components.

That would stun me, but it's a little hard to read.

If I wanted to argue that it's a problem, I'd just say that companies investing billions in training frontier models should reap the rewards. And distillation is essentially theft.

The banning or effective banning through tariffs of products like EVs is a pretty dumb economic strategy that rarely works out in the long-run.

I don't even necessarily disagree with your assessment of this spokesperson. But you must admit how inconsistent you're being.

Yes?

Not remembering my economic theory here, but it is likely more efficient/expensive to simply have the federal government cut checks to our moribund industrial sector companies and let consumers benefit from modern technology.

Cut GM/Ford/Stellantis a $20B check each, let consumers save (conservatively) $200B annually on new car purchases + downstream benefits. Huge win for consumers & taxpayers.

If it's not worth subsidizing explicitly like this, then we also should not subsidize by banning Chinese imports, which also ensures US drivers have less access to modern vehicles. (And downstream ensures US auto designers are less likely to have had contact with modern vehicles, making it less likely that they will be able to design future generations well.)

It's like they've read the history of the US and how it got to where it is in the first place.

Like the US did when it "stole" the textiles IP from the UK in order to kickstart its own industry?

> The industry cannot sustain itself if that’s the model

Then let it fall apart.

What about the US? 2026, still ongoing, still fucking up the global economy and threatening food supplies (fertilizer) and fuel reserves, no plan out, no objective reached, no coordination with "allies".

When was the last time China threatened Europe or Canada with invasion? Was there ever a time? I honestly don't know.

Guess what the US does all the time?

Who's models are open and can be used by all? Who's are made by comic book villains with the explicit goal of ruining the job market and capturing the results of all human endeavors for themselves?

Of course, China isn't perfect and has a lot of domestic issues. But on the global stage, they sure look better than the alternative.

Depends on what country you live in I suppose, but likely a spectrum of yes than any outright no. For example, Chinese EVs are using a different battery chemistry and not putting demand pressure on the more expensive chemistry western manufacturers use

We're talking about things like text people wrote, not some kind of raw data floating out in the ether.

[1] https://x.com/SemiAnalysis_/status/2064815044085318040

https://arxiv.org/abs/1503.02531

although i doubt there has been a legal case over it yet in the context of the legality of stealing shit but IANAL.

at the same time, I don't buy the idea that distillation is unimportant in assessing what Chinese labs are capable of. If it wasn't, why did Kimi's release timing coincide so well with Fable's launch?

and if Anthropic hadn't released Fable, would we have Kimi today? If the answer is no, then I think that's still a very important point to consider.

It’s massive copyright infringement.

The human buys the books.

Routers have now gotten the same treatment. So yes, consumers have been historicaly benefiting from all these things, and those benefits are about to evaporate as we lose access to cheap and high quality Chinese products before any domestic equivalents exist. And IIUC banning the use of Chinese LLMs for consumers and/or businesses in the US is now being discussed at the highest levels of government, with the "encouragement" of US AI firms.

I don't think any of these people care that America consumers are increasingly going to feel like they're living in a sanctioned country. It's all about the defense and b2b segments.

It is what built and sustains the movie and music industries. See: work for hire and 100+year copyright length

The tech industry: see: copyright and patent assignment from discoverer to corporation.

I know that corporations forcing me to assign patents and copyright to them was an incentive to take published works from "software practice and experience" and other technical journals, use them as the core of my work, and disclose that source to the company I worked for. Didn't stop them from applying for patents, however.

I think the discussion of copyright needs more refinement. We need to separate the discoverer's need for acknowledgment of development effort from the rent-seeking core of copyright.

Anthropic just settled a $1.5B suit over it!

I don't know what this guy thinks AI is, but this strikes me as delusional.

In my view, AI (LLM) is two things mixed together:

1. A reasoning engine on top of relatively rich fuzzy modal logic, implemented through variety of rules, which implement very common concepts.

2. A huge dictionary of words defined (with lot of detail) in the said logic, together with many known facts about them. Maybe bigger than Wikipedia.

Now, how on Earth do you want to gatekeep either of this? You can't gatekeep the 1st, logic of common sense, that's almost as difficult as gatekeeping a Turing machine (a concept of a computer). And gatekeeping the 2nd is ridiculous too, as it was built mostly from already published sources like a giant Wikipedia.

If anything, the opposite, to gatekeep AI is actually dystopian. It would mean end not only to right to compute, but also end of right to scientific knowledge.

(And I think, honestly, Chinese understand this. Trying to control-export AI makes as much sense as trying to control-export an English dictionary.)

*USA only.

the UK has fair dealing, which is more restrictive

https://www.gov.uk/guidance/exceptions-to-copyright#fair-dea...

https://www.britishcopyright.org/wp-content/uploads/BCC-Fair...

Now of course they themselves trained on the whole Internet for free, etc.

Point four is especially telling.

Ball is deeply terrified of "AI communism", or in less red-scarey terms a world where AI is a public good and him and his fellow oligarchs don't get to centralize the accumulated knowledge of all of humanity and charge rent for it.

I think he's so deeply stuck in his ideological bubble he can't conceive that what he describes as a dystopia is the only way the future wouldn't be a dystopia for the vast majority of people.

Or to put it more clearly, the oligarch utopia he's trying to build is dystopia for the vast majority of humanity. The "utopia" he's trying to build is one of riches for him and serfdom for us.

Genuine question: do you have a source for how long distilling Fable would take with preparation?

For example, if OpenAI / Anthropic were actually open, other US labs could be building near-frontier open weights models by distilling off OpenAI / Anthropic. But because US companies don't want to be sued, US labs who obey terms of service, will be at a disadvantage to Chinese peers.

Maybe US labs need to just not care and distill from OpenAI / Anthropic anyways?

MBAs and non technical managers = inept Catbert-type charlatans.

Software engineers, devs, etc = geniuses capable of mastering any domain, innate ability to be right on any topic.

Like look, I'm not a native speaker, sure. But I think when someone says "value add", that means there was value there (which you claim they're rhetorically erasing), and then that was added to. Under no interpretation of this phrase do I get an erasure of prior value.

So certainly, as long as words mean anything, no, they absolutely did not say or suggest what you claim they did, and what you extract a thus unreasonable amount of obnoxious schadenfreude from, while throwing in a cheap insult for funsies at the end.

It's the second time I feel compelled to reach for this just today: https://i.kym-cdn.com/photos/images/original/002/659/979/108...

Kimi specifically relies heavily on reasoning traces which is largely due to their training strategy and will perform poorly when thrown into a conversation from another model. Another fun advancement is that they simply ctrl+c ctrl+v'd attention which means that the model can steer where to look in the context window without ever producing an output token increasing token efficiency and attention accuracy as a side effect you end up with weaker prompt adherence.

None of these 'issues' manifest in US models which proves that kimi has diverged and is achieving these capabilities seperately from the architecture that US labs rely on.

I would agree with you during the Deepseek R1 era, but US labs were heavily inspired by open research at that point as well so I wouldn't give them too much credit.

Wow, just wow. He is not even subtle about it.

This will have to wait for the Supreme Court. OpenAI and Microsoft 100% deserve to lose, even without OpenAI allegedly hiding evidence.

The LLM output, is not the same as the input - there is value add.

Of course works used as raw inputs to LLMs required work and are reasonably subject to IP concerns - but they are different.

It's possible that the LLM makers 'owe' the content creators that created the content they used to make their products - it's an interesting but separate question.

We could very well end up where content IP is protected, LLM output is not and visa versa with reasonable legal founding, doubtful but plausible.

Serious question.

I'm from the US, and I think it's hilarious.

If that's not distillation in the auto industry, I don't know what would be. They all seem fine with, and benefit from, this as an industry.

The stupidest part of this is that Anthropic don't even provide the real reasoning traces in their model output. It would be like Ford buying a Chinese EV to tear down, then realizing that the seller had removed the battery and charging system before shipping it to them.

Does anyone believe for a second that Anthropic isn't sending requests to all the Chinese models and analyzing the crap out of them to assess how capable they are, what their reasoning looks like etc?! I guess they'd call that "using" the model, since that sounds nicer.

They are a petroleum products importer, so it’s a big win for them.

I wouldn't want to live in a world where technology or general people's wellbeing was held back by obsolete laws that ended up lingering on just to protect undeserving special people at the expense of the rest of society. Remember guilds for tradesmen? They were also a monopoly given by the government to special people. They had their purpose but nowadays we have different ways to keep tradesmen working effectively like license requirements and insurance.

Just to be clear, I think we do still need copyright, but that we might be in a transition period where it has to be redesigned to adapt to AI.

That works both ways, competition and performance spur new developments. You don't think the American labs are looking at Chinese research on how to reduce compute per token?

For some reason folks seem to think that China can take action and then other countries can't also take action or respond to that action and it comes up again and again. China has hypersonic missiles! Pack it up boys time to go home. Nothing we can do. Dang shucks. China distilled American AI models, welp time to just close it all down and let's just write off those trillions of dollars and all the literal geniuses financing and building these things. Oh well China can just copy American models while we spend all the money! Ok we just stop developing models and we'll just copy their models. China will flood the market with their cheap products! Nope can't do anything like, oh, idk, not buy any of those products or just raise the prices on them in local markets. It's never-ending. I don't understand the lack of capacity to reason about other actors that takes commonly takes place. And that's just China, never mind other general issues.

Ore has value, a different kind of value than the output of the refinery.

In other words: even if the US (somehow) denies them access to the current OpenAI/Anthropic models, they'll be able to improve based on what they already have.

It's completey insane that we still don't know how Open Source would work, that the laws are vague and we're still technically waiting for the courts to decide on cases.

The government should a) legislate and b) create test cases and run them through the courts so that we can have clarity.

I mean not really. A quadrocopter is a remarkably simple thing made out of extremely generic parts: 4 DC motors (and ESCs), a radio, a computer, a battery and an inertial measurement unit. Anybody with a rudimentary amount of electronics knowledge can build one, the components are extremely widely used. The most unique parts about them are the frame and propellers, which are pretty easy to fabricate.

You're right to call out the nasty environment surrounding intellectual property in the US and the exploitation of ideation in general, you just needed a correction on that. Someone else in this chain said virtually the same thing, which is a weird coincidence of historical ignorance. Not too weird, people tend to forget the 18th and 19th centuries happened, and much of the causally important wheels of the world are in the unsexy grease pits nobody wants to think about.

yep

https://www.britishcopyright.org/wp-content/uploads/BCC-Fair...

> This ambiguity has resulted in extensive litigation on the limits of Fair Use to AI development. Currently, we only have 3 first instance decisions out of the 53 cases being tried. It will likely take a decade before we understand how Fair Use applies to any one step in AI training, let alone all.

> In the three lower court decisions so far, one held Fair Use did not apply (Thomson v Ross), one held Fair Use could apply (Kadrey v Meta) with the court suggesting more evidence was needed on the fourth factor ‘harm to the market’, and the third case held Fair Use may apply to some AI. As Fair Use is dependent on the specific facts at issue, none of these cases help educate the market or the public as to the limits of Fair Use in AI contexts.

@throwa356262 argument is that it is infeasible to distill and release a new frontier model in two weeks.

Let me know if there's something there that's not clear.

What hurts other people too?

Or maybe they're going through an intermediary "transfer station" that's breaking terms of service:

https://www.chinatalk.media/p/how-to-buy-cheap-claude-tokens...

the same argument - a level of creativity in the world knowledge creation that ins't present in the model training on that knowledge.

Or in other words - model creation and training is just a distilling of the world knowledge.

How, and why?

> We could very well end up where content IP is protected, LLM output is not and visa versa with reasonable legal founding, doubtful but plausible.

That is the current state of legal rulings - LLM output is public domain, not copyrightable.

Source: I've been flying R/C aircraft of various types for over 30 years. Last year I built, I think, at least 7 FPV drones (a mix of fixed wings and quads).

True, if the human's access to the book was legal

A great deal of training was on the open web, no one should complain.

But at least Meta and Anthropic were caught red handed taking copyrighted works, illegally, for training

I think international IP laws are too strick and onerous, but they were broken to train these models

you mean like the regulatory clarity surrounding stealing shit to make the LLMs in the first place?

> [There is] extensive litigation on the limits of Fair Use to AI development. Currently, we only have 3 first instance decisions out of the 53 cases being tried. It will likely take a decade before we understand how Fair Use applies to any one step in AI training, let alone all.

https://www.britishcopyright.org/wp-content/uploads/BCC-Fair...

> The government should a) legislate and b) create test cases and run them through the courts so that we can have clarity.

if so, it would be nice if they approached the instances of stealing shit chronologically. but that's just my view.

Then there is Alexander Hamilton's advocacy for importing foreign technicians that bring back IP and reproduce it here in the states. Best of all was the patent act of 1793 which like with the literature copyright ignoring, let us citizens patent inventions from the other side of the pond.

The founding fathers definitely had the right idea on IP.

How, and why?"

How are they even remotely the same?

They're not even used the same way.

One is raw data input, the other is training content - designed to train LLMs.

One is a set of IP derived for other purposes entirely, and has esablished IP law - how you can use someone else's creative work or not ... for LLM outputs, less clear.

Our current laws simply weren’t built for this and I expect the legal status of LLM output is not going to be resolved until Congress actually legislates on this topic.

But it's debatable if that's the case.

Google stores copyrighted content and produces in in their product.

Also - it's fair game to use snippets of things here and there, if the derived work is novel, which I think it is for LLMs, mostly.

I do agree though, that we ought to draw the line somehow.

It takes two parties to agree to a settlement. That the other party agreed to a settlement instead of taking it to court implies this was not the slam dunk you may think it was.

Anthropic's own copyright infringement could apparently be forgiven for 1.5B USD after all, so maybe there's a price that breaking the distillation clause for is acceptable too. Or some other arrangement.

There is no world in which me vacuuming the entirety of human knowledge to make a genai model is ok but hoovering my model answers is not. The hypocrisy is stunning and risible.

Now if you go and make a model based on purely synthetic data and not a single work made by humans, you would have a valid point.

In any case the laws are being written now, but I doubt these will have worse protection than software does, which has far better protections than copyright

Whether we think they're paying enough is another question, but "I'm paying for content so can protect it" doesn't seem inconsistent.

We may decide that giving models away for free means they don't have to license content (judging by HN comments), but currently that doesn't seem to be the case as Meta is facing lawsuits for its open models.

(Obligatory stratechery piece: https://stratechery.com/2026/whos-afraid-of-chinese-models/ )

If you think that the addition of a less creative process (model creation) to a more creative corpus ("art") is problematic, then it follows that you should think the addition of a less creative process (distillation) to a more creative corpus (a model) is also problematic.

It's also sadly hypocritical to see all this rhetoric here on this thread decrying SOTAs for using a variety of content for their inputs as somehow sTeaLINg sTufF! ...

... but Chinese SOTA foundries directly using distillation as fair game.

I don't think there is any coherence to any of these arguments - other than 'we liking big companies'. That's the only common thread.

What is more reasonable:

- There's some grounds for fair use by SOTA models to ingest content, so long as they are not reproducing it ... very roughly speaking.

- SOTA makers are producing novel works, there is value add in that process, again roughly speaking.

- Distillation is a bit of a grey zone, producing random content as arbitrary input is one thing, but producing training sets is another. I think there's a coherent line in there somewhere, I'm not sure where it is.

On the basis of patents, it didn't quite have nearly as much of a history of mutation culturally, but did experience massive whiplash in purpose and application following the implementation of globalism. What was once a system to protect technical innovation on an individual level, would find new purpose as a means to provide structure to an increasingly complicated and internationalized dynamic market. Another means of bureaucratic organization. Then, once again, the context and purpose would change when the world developed digital globalism. The entire engine of IP as a legal fiction became a significant geopolitical tool in an increasingly cramped and fragile world, a necessary gimmick holding up the sky.

Unfortunately, not much to do at this point. It'll likely only become even more nonsensically important as time wears on, until the globalist system collapses. It's certainly possible it'll even be the confounding factor that causes the great unraveling, though the problems hardly begin and end with IP. It was just a useful legal fiction in the wrong place at the wrong time.

Settling just says that they expected the internal costs or risks to be more than 1.5 billion cashflow.

  In the $65B in Series H funding at $965B post-money valuation they said their run-rate revenue crossed $47B annualised.

Also if it ends up that other competitors also need to pay $1.5 billion, then maybe that does or doesn't have a competitive advantage.

Anthropic's business and legal strategies are not public. I would expect there to be multiple legs/reasons for settlement even for a decision below 1%. Trying to create a single narrative is what us spectators do.

The same principle can be applied to distillation - it is a fair use. You just shouldn't use illegal ways to access the models being distilled.

To the commenter below: if it is illegal - has the police/FBI report been made? Otherwise it is just a civil court matter.

Why is Anthropic's ToS any more binding than that of a rabidly-anti-ai literature blog with 50 readers?

> There is an even higher level of creativity in creating books, songs and all sorts of art used in model training though.

He claimed there was more creativity in model training than in model distillation. That makes no claim about the relationship between the creativity in model creation and art. Why are you continuing to attack a claim that was never made, after a sub thread very explicitly clarifying that that claim was not made?

Who are you saying owns that IP? The people who trained the model? The people who ran the model? The people who wrote the prompt? The person who paid for all of that to happen?

If the model output is owned by the person prompting it and paying for the tokens, what's the problem here?

If the model output is owned by the trainer of the model, that's a big nasty can of worms.

Software is protected by copyright. Some software may also be protected by patents, but last time I checked, AI generated output of any kind was not patentable.

In a world where information sources are only going to dwindle, it is not in anyone's interest to empower actors that will use these to manipulate perceptions

Yes, of course, on Anthropic's side. Why would the other side agree to a settlement?

>Perhaps even more importantly, the current frontier LLM models are self-admittedly the product of enormous quantities of copyright infringement and even less savory inputs, so calling them out for distilling the fruit of that tainted tree reads as highly hypocritical at best.

Context is important. And in this context, their argument only mentions creativity when it belongs to an AI lab. That omission is the blind spot I pointed out. Bottom line is whether or not Anthropic are being hypocritical and yes, they most definitely are, regardless of any attempted sophistry.

There is a reason courts want you to tell "The whole truth" and not just "the truth".

> Why is Anthropic's ToS any more binding than that of a rabidly-anti-ai literature blog with 50 readers?

Although I will say, this whole comparison stuff really doesn't seem to be your thing; might impede your analysis quite a lot: https://news.ycombinator.com/item?id=49013148

Maybe ask Claude?

It does seem to be becoming the norm for AI companies to licence premium content in America, judging by the deals they're making. It doesn't seem to be done by the international distillers. It's a cost that American open models will seem to have to pay but not international.

Also, if model output distillation is shown as some form of reverse engineering I assume the DMCA can apply

My narritive is that the terms of the settlement would be full and final.

It was a class action, with payment going to authors and publishers, and the legal team will get paid too.

My guess is that funding is a major issue for the legal team. Authors presumably can't pay for lawyers unless a percentage of winnings, although publishers may have invested.

But the legal team will ask the beneficiaries to use some of the warchest to fund different campaigns against every other AI company. I would assume the legal team wants to win again. They've now got a good story to sell to rights holders, who presumably like money and don't like risks.

I haven't even got to my armchair yet this morning.

It goes both ways - American companies and their business are protected by American laws and have access to the market protected by those laws, etc.

I agree that you can't patent a book, but I would point out that you can patent an idea, which may only appear in a book or journal article.

This is a very surprising claim to me (and I imagine many small website owners who keep getting scraped by Anthropic and OpenAI).

Do you have a source?

https://digiday.com/media/a-timeline-of-the-major-deals-betw...