OpenAI Links Moonshot Users to 16,000-Request Distillation Push

OpenAI says it has disrupted a coordinated campaign to extract its models' hidden reasoning, and pinned a core cluster of the activity on individuals associated with Moonshot AI, the developer of Kimi.

The volume tells the story. Activity began on July 1 at minimal volume, then spiked to 16,000 requests from more than 4,000 users on July 24 and 25. Further investigation identified related prompt-pattern activity across a cluster of more than 15,000 users. OpenAI says it fully shut the operation down by July 28.

The technique itself was blunt. Operators copied encrypted reasoning from one conversation and asked another model instance to decrypt and transcribe it. OpenAI says its encryption was not broken, no databases were accessed, and no stored user conversations were exposed.

OpenAI defines the behavior it caught as "adversarial distillation: the systematic and unauthorized use of one model's outputs or reasoning to help train, reproduce, or improve another model." Caroline Zier, who leads OpenAI's strategic national security policy work, told Bloomberg: "Our concern is about violation of our terms of service, not open models or legitimate distillation."

The company has banned the offending accounts, tightened sign-up verification, added protections for hidden reasoning, and shared the findings through the Frontier Model Forum and government channels. Anthropic has previously leveled similar accusations at Moonshot. The disclosure sits within a wider run of China-AI coverage our team has been logging this quarter.