US accuses Chinese AI firms of 'malicious' copying of AI technology

By Courtney Rozen and AJ Vicens

WASHINGTON, ‌Sept 9 (Reuters) - The U.S. ​government on ​Tuesday accused Chinese artificial intelligence companies of maliciously copying technology from American AI firms, potentially complicating relations ahead of a planned meeting between leaders of the world's two biggest economies later ‌this month.

The Chinese companies copied U.S. AI labs' intellectual property through a technique known as ⁠distillation, according to a statement from U.S. law enforcement and intelligence officials. Distillation is the process of training smaller AI models using ‌output from larger, more expensive ones ‌as part of an effort to lower the costs of training a new AI tool.

U.S. officials accused six Chinese companies, including DeepSeek, Moonshot AI and Alibaba, of tapping variants of American-made AI models to train ​their AI products more quickly. The companies did so "likely with Chinese government awareness," according to the statement from U.S. officials, who added that the Chinese companies targeted AI models from Anthropic, OpenAI, 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.

U.S. officials made the allegations as the ​administration of President Donald Trump prepares for Chinese President Xi Jinping's visit to the U.S. in late September. The U.S. and China are also gearing up to discuss AI ​safety risks during a dialogue planned for mid-September, Reuters previously reported.

In ‌response, China's commerce ministry said on Wednesday the allegations lacked factual basis and legal grounding, while accusing the U.S. of double standards, interfering in normal commercial activities and attempting ⁠to suppress competition.

It called distillation a widely used, "neutral technical method in nature" and said some U.S. companies had also "extensively distilled Chinese models," according to a ministry statement.

"If the U.S. uses cracking down on distillation as a pretext to take actions to ⁠contain or suppress Chinese AI companies, China will certainly take resolute measures in response," it said.

A Chinese foreign ministry spokesperson said earlier ​on Wednesday: "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."

"As major powers in artificial intelligence, China and the U.S. should strengthen cooperation."

The U.S. made a ‌similar accusation in April ahead of Trump's visit to Beijing.

The Tuesday statement alleged that the distillation not only reduces research and development costs for Chinese AI firms, ‌but also enhances China's "military and cyberattack capabilities that could be used against the U.S. and our allies."

Reuters reported on July 31 that ⁠Chinese military researchers have used outputs from leading ‌U.S. AI models to train ​domestic Chinese AI systems and advance China's defense capabilities.

(Reporting by Courtney Rozen in Washington and AJ Vicens in Detroit; Additional reporting by Beijing Newsroom. Editing by Bill Berkrot, Thomas Derpinghaus and ‌Mark Potter)

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