US Gov’t accuse six Chinese AI companies of stealing American AI technology

The US government has accused six Chinese artificial intelligence companies of using model distillation on an industrial scale to extract capabilities from American AI systems.

In a joint advisory issued on Tuesday, the National Security Agency (NSA), the Federal Bureau of Investigation (FBI), and the Cybersecurity and Infrastructure Security Agency (CISA) named DeepSeek, Moonshot AI, Alibaba, MiniMax, StepFun, and Z.AI.

According to US security agencies, the Chinese firms extracted billions of tokens through millions of requests targeting frontier models such as OpenAI’s GPT, Anthropic’s Claude, Google’s Gemini, and SpaceX’s Grok.

While model distillation is a legitimate technique that allows a smaller AI model to learn from a more capable one, the advisory stated that these companies bypassed usage restrictions and access limits using large numbers of accounts and proxy services.

US officials asserted that these campaigns have allowed Chinese developers to drastically reduce the cost and time required to build advanced models using technology funded heavily by American firms, while warning that the extracted capabilities could support Chinese military and cyber operations.

The allegations arrive ahead of an anticipated meeting later this month in Washington between US President Donald Trump and Chinese President Xi Jinping, adding fresh tension to bilateral tech relations.

US Treasury Secretary Scott Bessent warned in July that industrial-scale distillation crossing into intellectual property theft could invite sanctions and Entity List designations.

Meanwhile, CISA has urged frontier developers to strengthen their systems against repeated queries and model abuse.

The Chinese government has strongly rejected the accusations.

Foreign Ministry spokesperson Mao Ning stated that China’s AI advancements stem entirely from its own scientific and technological development, urging the US to refrain from false accusations and instead focus on bilateral cooperation.