The US government accused AI companies in China of copying technology from American AI firms. This could potentially complicate relations ahead of the planned meeting between the leaders of both nations, Donald Trump and Xi Jinping, later this month. Chinese companies copied US AI labs’ intellectual property using a technique called distillation, as per US officials.
US accuses China-based AI firms of using distillation to copy US models
Distillation apparently involves using the output of a larger AI model to train a smaller, cheaper model, reducing the cost of training a new AI tool. US officials accused six Chinese companies, including DeepSeek, Moonshot AI, and Alibaba. The accusation here is that the companies tapped variants of American AI models to train their own AI products faster.
As per the statement from US officials, the companies likely did this with the knowledge of the Chinese government. They also said the companies targeted models from Anthropic, OpenAI, Google, and SpaceX. “China-based AI companies are engaging in aggressive, malicious, and targeted distillation activities at an industrial scale,” the officials said.
The timing stands out. It comes as President Donald Trump prepares for President Xi Jinping’s visit to the US in late September. The US and China are also preparing to discuss AI safety risks, as per a previous Reuters report.
The timing is notable
Meanwhile, the Chinese foreign ministry spokesperson Mao Ning has responded on the matter. They said that China’s AI advances were the result of achieving high-level science and technological self-reliance.
“We hope the U.S. will earnestly implement the important consensus reached by the leaders of both countries and refrain from making false accusations and smearing China,” Mao said. “As major powers in artificial intelligence, China and the U.S. should strengthen cooperation.”
The U.S. made a similar accusation in April, ahead of President Trump’s planned visit to Beijing. The latest statement alleged that the AI distillation not only reduces research and development costs for Chinese AI firms, but also improves China’s military and cyberattack capabilities that could be “used against the US and its allies.” Reuters also reported in July that Chinese military researchers had used outputs from leading US AI models to train domestic systems and strengthen China’s defense capabilities.
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