The Trump administration is vowing to crack down on foreign tech companies' exploitation of U.S. artificial intelligence models, singling out China. Michael Kratsios, the president's chief science and technology adviser, accused foreign entities 'principally based in China' of engaging in deliberate, industrial-scale campaigns to 'distill' capabilities from leading U.S. AI systems. 'The US government has information indicating that foreign entities, principally based in China, are engaged in deliberate, industrial-scale campaigns to distil US frontier AI systems,' Kratsios said in a statement. He added that the administration will work with American AI companies to identify such activities, build defenses and find ways to punish offenders.
The House Foreign Affairs Committee offered unanimous, bipartisan support for a bill to set up a process to identify foreign actors that extract 'key technical features' of closed-source, U.S.-owned AI models and to punish them with measures including sanctions. Rep. Bill Huizenga, R-Mich., sponsored the bill and said 'Model extraction attacks are the latest frontier of Chinese economic coercion and theft of U.S. intellectual property.'
The US government has information indicating that foreign entities, principally based in China, are engaged in deliberate, industrial-scale campaigns to distil US frontier AI systems.
China's embassy in Washington said it opposed 'the unjustified suppression of Chinese companies by the U.S.' Embassy spokesperson Liu Pengyu stated that 'China has always been committed to promoting scientific and technological progress through cooperation and healthy competition' and that 'China attaches great importance to the protection of intellectual property rights.' The U.S.-China gap in performance of top AI models has 'effectively closed,' according to a recent report from Stanford University's Institute for Human-Centered AI.
Last year, the Chinese start-up DeepSeek released a large language model that could compete with U.S. AI giants but at a fraction of the cost. According to The Independent - Main, David Sacks, then serving as President Donald Trump's AI and crypto adviser, described 'substantial evidence that what DeepSeek did here is they distilled the knowledge out of OpenAI's models.' In a February letter to U.S. lawmakers, OpenAI made similar allegations and said China should not be allowed to advance 'autocratic AI' by 'appropriating and repackaging American innovation.' According to The Independent - Main, Anthropic described DeepSeek and two other China-based AI laboratories as engaging in campaigns to 'illicitly extract Claude's capabilities to improve their own models' using distillation techniques.
Leveraging tens of thousands of proxy accounts to evade detection and using jailbreaking techniques to expose proprietary information, these coordinated campaigns systematically extract capabilities from American AI models, exploiting American expertise and innovation.
The White House memo emerges just weeks before President Donald Trump is scheduled to meet Chinese President Xi Jinping in Beijing. The accusations cast doubt on the future of Nvidia's powerful AI chip shipments to China. Commerce Secretary Howard Lutnick indicated on Wednesday that no shipments of Nvidia's AI chips to China have yet occurred. The White House memo pledges to share intelligence with American AI companies regarding distillation efforts and to 'explore a range of measures to hold foreign actors accountable.'
China has always been committed to promoting scientific and technological progress through cooperation and healthy competition. China attaches great importance to the protection of intellectual property rights.
There’s substantial evidence that what DeepSeek did here is they distilled the knowledge out of OpenAI’s models.
China should not be allowed to advance 'autocratic AI' by 'appropriating and repackaging American innovation.'
Anthropic accused DeepSeek and two other China-based AI laboratories of engaging in campaigns to 'illicitly extract Claude’s capabilities to improve their own models' using the distillation technique.