US Accuses Chinese AI Firms of Trade Secret Theft

U.S. federal agencies alleged that Chinese AI firms are stealing American trade secrets on an industrial scale to cut costs and rapidly bring technology to market.

Allegations of Industrial-Scale Knowledge Distillation

A report published by the FBI, the National Security Agency, and the Cybersecurity and Infrastructure Security Agency stated that major Chinese tech firms are abusing knowledge distillation techniques.

It was stated that this method enables the extraction of proprietary capabilities and features by training weaker models using more advanced U.S. frontier AI models.

Gray Markets and Transfer Stations

U.S. agencies reported that China-based AI firms use a gray market known as transfer stations to bypass geographical restrictions, security measures, and terms of use.

The statement emphasized that certain Chinese tech companies, including DeepSeek and Alibaba Group, have been conducting high-volume knowledge distillation campaigns against U.S. AI firms.

Sanctions Threat and Anthropic Allegations

Treasury Secretary Scott Bessent issued a warning regarding potential sanctions against Chinese companies that distill American AI models.

Meanwhile, Anthropic claimed that three Chinese AI laboratories conducted an industrial-scale campaign generating over 16 million interactions through approximately 24,000 fake accounts to extract capabilities from the Claude model.