GoKawiilThe US is preparing to crack down on China’s allegedly “industrial-scale theft of American artificial intelligence labs’ intellectual property,” the Financial Times reported Thursday.
Since the launch of DeepSeek—a Chinese model that OpenAI claimed was trained using outputs from its models—other AI firms have accused global rivals of using a method called distillation to steal their IP. In January, Google claimed that “commercially motivated” actors not limited to China attempted to clone its Gemini AI chatbot by promoting the model more than 100,000 times in bids to train cheaper copycats. The next month, Anthropic accused Chinese firms DeepSeek, Moonshot, and MiniMax of using the same tactic to generate “over 16 million exchanges with Claude through approximately 24,000 fraudulent accounts.” Also in February, OpenAI confirmed that most attacks it saw originated from China.
For the US, these distillation attacks supposedly threaten to help China quickly catch up in the AI race. In a memo that FT reviewed, the director of the White House Office of Science and Technology Policy, Michael Kratsios, warned that “the US government has information indicating that foreign entities, principally based in China, are engaged in deliberate, industrial-scale campaigns to distill US frontier AI systems.”
According to Kratsios, Chinese campaigns were “leveraging tens of thousands of proxy accounts to evade detection and using jailbreaking techniques to expose proprietary information.” His memo said that US firms would soon gain access to government information to help them combat the apparent attacks.
So far, AI firms have alleged that such attacks violate their terms of service, but Congress may update laws soon to further equip US companies fighting the alleged fraud.
Kratsios confirmed in his memo that the US is exploring measures “to hold foreign actors accountable for industrial-scale distillation campaigns.”
Congress has already received some marching orders, but it remains unclear how fast lawmakers will act. In an April report, the House’s Select Committee on China advised that Congress “should direct the Commerce Department’s Bureau of Industry and Security (BIS) and the Department of Justice (DOJ)” to “treat model extraction as industrial espionage” and “impose penalties severe enough to deter Beijing’s theft of American innovation.”