DAILY SITUATION RECAP: The White House says Moonshot AI distilled Fable. Michael Kratsios, Director of the White House Office of Science and Technology Policy (OSTP), has stated that Moonshot’s Kimi K3 was developed using distillation of Claude Fable 5, in violation of Anthropic’s terms of service. In addition, Moonshot has access to Nvidia GB300s in violation of US export controls. Treasury Secretary Scott Bessent is threatening sanctions and Entity List designations, which could block…