American authorities have accused Chinese artificial intelligence firms of maliciously replicating proprietary technology from U.S. competitors, potentially straining diplomatic relations ahead of a planned summit between the leaders of the world's two largest economies later this month. According to a joint statement issued by U.S. intelligence and law enforcement officials, Chinese developers appropriated intellectual property from American AI laboratories through a technical process known as distillation. Distillation lets smaller AI systems be trained using outputs from larger, more expensive models, drastically lowering the cost of building new tools.
Officials singled out six Chinese entities, including DeepSeek, Moonshot AI, and Alibaba, alleging they tapped variations of American AI products to accelerate their own development. The statement noted these activities occurred "likely with Chinese government awareness" and targeted technology created by OpenAI, Anthropic, Alphabet's Google, and SpaceX. "China-based AI companies are engaging in aggressive, malicious and targeted distillation activities at an industrial scale," the officials said.
These claims come as President Donald Trump's administration readies for a visit from Chinese President Xi Jinping to the US in late September. Both countries are also scheduled to hold bilateral talks mid-month focused on artificial intelligence safety risks. In response, Chinese foreign ministry spokesperson Mao Ning said on Wednesday that China's progress was driven by "achieving high-level science and technological self-reliance." "We hope the U.S. will earnestly implement the important consensus reached by the leaders of both countries and refrain from making false accusations and smearing China," Mao said.
"As major powers in artificial intelligence, China and the U.S. should strengthen cooperation." Washington leveled a similar allegation in April ahead of Trump's trip to Beijing. Tuesday's official statement added that distillation not only reduces development expenditures for firms in China, but also strengthens China's "military and cyberattack capabilities that could be used against the U.S. and our allies." Earlier reports on July 31 showed that military researchers in China have relied on outputs from leading American models to improve domestic systems and enhance strategic defense capabilities. Join thought-provoking conversations, follow other Independent readers and see their replies
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