ByteDance founder tells staff to avoid AI distillation, The Paper reports 

BEIJING, Aug 6 (Reuters) - ‌ByteDance founder ​Zhang ​Yiming has told the Chinese internet giant's staff to avoid improving its AI models by ‌distilling rival systems, even at the expense of ⁠some short-term gains, China's state-backed outlet The Paper reported on ‌Thursday.

Known as model distillation, ‌the method uses the outputs of a powerful AI system to train or improve a smaller model ​and has become a flashpoint in an intensifying tech race between China and the United States.

• ⁠Zhang told a recent internal ByteDance meeting that AI development requires "long-termism and delayed ​gratification, rather than using others' output to achieve short-term leaderboard rankings," The Paper said, ​citing sources within the company.

• ‌ByteDance should be willing to "sacrifice some short-term gains for long-term goals," Zhang told the ⁠company's Seed AI research team, according to the report.Zhang says AI distillation interferes with genuine long-term technological breakthroughs, The ⁠Paper said.

• There's fierce competition among Chinese developers to push out ​cheaper and more powerful AI models.

• Washington and leading U.S. AI firms have accused Chinese rivals of using the distillation ‌technique to extract capabilities from proprietary models.

• U.S. Treasury Secretary Scott Bessent has warned ‌that Chinese companies could face financial sanctions or placement ⁠on U.S. trade blacklists, ‌while Beijing accused ​Washington of "AI hegemonism" and threatened countermeasures.

(Reporting by Ethan Wang and Eduardo Baptista; Editing by Emelia ‌Sithole-Matarise)

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