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OpenAI Says People Linked to China's Moonshot Tried to Copy Its AI's Hidden Reasoning

Decrypt reports on an OpenAI disclosure describing a campaign, starting July 1, 2026, that sent 16,000 extraction requests in a single two-day window from a cluster of over 15,000 accounts to pull out OpenAI models' encrypted "hidden reasoning" (chain-of-thought) rather than their answers. OpenAI says operators did not break encryption but manipulated model interactions to replay one conversation's encrypted reasoning for decoding in another, enabling "adversarial distillation" of a rival model's reasoning without its safety guardrails; it attributes a core cluster to individuals associated with Moonshot AI (maker of Kimi) and says it patched the replay pathway by July 28. The piece situates this alongside prior distillation disputes (DeepSeek, Anthropic's fraudulent-account claims against Chinese labs, xAI's admitted use of OpenAI outputs for Grok) and an August finding that OpenAI, Anthropic and Google each protected reasoning with a single provider-wide encryption key that attackers could coax into plaintext.