White House Accuses China of Industrial-Scale Theft of U.S. AI Technology

The U.S. government has formally accused Chinese entities of conducting "industrial-scale campaigns" designed to extract and replicate proprietary artificial intelligence systems developed in the United States. Michael Kratsios, the top science and technology advisor to President Donald Trump, detailed these efforts in a recent memo, characterizing the activity as a systematic attempt to undermine American innovation. At the center of the dispute is a process known as "distillation," where smaller AI models are trained using the outputs of larger, more advanced "frontier" models. While distillation is a legitimate tool for creating efficient, lightweight AI, the administration alleges that China is using it surreptitiously to bypass R&D costs and strip away critical security protocols. According to U.S. intelligence, these campaigns utilize tens of thousands of proxy accounts and sophisticated jailbreaking techniques to expose proprietary information. Kratsios noted that while these copied models may appear to perform well on specific benchmarks, they lack the inherent reliability and integrity of the original U.S. systems. The White House intends to respond by providing U.S. AI companies with detailed information regarding the tactics and actors involved in these adversarial campaigns. Furthermore, the administration is exploring a range of accountability measures to deter future intellectual property theft in the AI sector.