Anthropic finds itself at the center of two escalating stories that reveal the intense pressures of the artificial intelligence arms race. Over the weekend, a rumor spread that Anthropic was acquiring robotics startup Physical Intelligence. While the CEO of Physical Intelligence swiftly denied any imminent deal, a report from The Information confirmed that the two companies held acquisition talks earlier this spring.
The talks underscore a strategic belief shared by top AI labs: that understanding the physical world is essential to building superintelligent systems. Anthropic has already tested this thesis through projects like Project Fetch, where non-experts used its Claude model to program a robot dog. Acquiring an existing team like Physical Intelligence—which has raised over $1 billion and whose π0.5 model is widely used in robotics research—could shave years off Anthropic’s internal development. However, the deal is complicated: Physical Intelligence’s investors include Khosla Ventures, Thrive Capital, and Founders Fund, all major OpenAI backers, and OpenAI itself is an investor, potentially granting it rights of first refusal or other protective provisions.
Simultaneously, the White House and Treasury Department have escalated a confrontation with Chinese AI firms. Treasury Secretary Scott Bessent warned of sanctions after White House technology policy chief Michael Kratsios accused Beijing-based Moonshot AI of improperly distilling Anthropic’s Fable model to create its open-weight Kimi K3 model. Bessent stated that “open source is not open season on American IP,” signaling that Entity List designations are on the table. The allegations are controversial, however—Fable was only publicly released on July 1, while Kimi K3 appeared last week, making a complete distillation timeline unlikely, experts note.
The dual developments paint a picture of a white-hot AI competition where corporate acquisitions and government sanctions are becoming key pieces. As both Anthropic and OpenAI prepare for historic IPOs, the race to dominate AI—from software to robotics—is drawing in national security concerns and threatening to redraw the global technology landscape.
