U.S. Treasury Secretary Scott Bessent has said that the United States may impose sanctions on Chinese companies operating in the field of artificial intelligence (AI).

According to Bessent, the U.S. supports open-source AI and the innovation associated with it. However, he stressed that open-source code does not give companies the right to freely infringe upon American intellectual property.

“If Chinese companies conduct covert large-scale data distillation attacks that cross the line and amount to intellectual property theft, sanctions and inclusion on the Entity List will be on the table,” Bessent wrote on X.

On July 18, Bloomberg, citing Chinese Assistant Foreign Minister Liu Bin, reported that Beijing had rejected accusations by U.S. companies that it had unlawfully used the output of their AI models to develop its own technologies.