According to a memo released Thursday by Michael Kratsios, director of the White House Office of Science and Technology Policy, the hostile activities involve the use of tens of thousands of fake accounts to evade detection, as well as complex tools to expose proprietary, confidential information.
Kratsios did not mince words in his statement: “These coordinated campaigns systematically extract the capabilities from American AI models, leveraging American expertise and innovation.”
The technological race between the United States and China never slows down, and artificial intelligence has now become the main flashpoint in trade tensions between the two superpowers. The central axis of the accusations is a technique called “distillation” – the process of transferring knowledge from a large AI model to a smaller one that is much cheaper to maintain. US companies like Anthropic and OpenAI have previously claimed that competitors are using this method to unfairly mimic the capabilities of their flagship products.
At the center of the allegations is the Chinese startup DeepSeek, which shook Wall Street last year. As early as February, the creators of ChatGPT warned US lawmakers that DeepSeek was attempting to replicate the performance of their models precisely through distillation. Meanwhile, Anthropic reported identifying “industrial-scale campaigns” conducted by DeepSeek and two other labs to siphon off the capabilities of the Claude model.
Models copied in this manner carry serious risks, as they lack the safeguards built into the original versions. As Kratsios noted:
“These distillation campaigns also allow these actors to purposefully strip safety protocols from the resulting models and destroy the mechanisms that ensure these AI models are ideologically neutral and truth-seeking.”
In response to this practice, President Trump’s administration is planning a series of interventions. The White House intends to share information with US companies regarding attempts at “unauthorized industrial-scale distillation”, improve coordination among private entities, and explore measures to hold foreign actors accountable.
The president has tightened controls on the sale of AI hardware and chips to China and pushed through federal regulations aimed at accelerating innovation, though critics warn this could make it easier for tech companies to evade accountability for various errors. However, it seems that battling China will be a priority for him, given the president’s historically rather negative stance toward the Middle Kingdom.