US accuses China of copying AI models, China hits back

Three U.S. security agencies have come together to accuse Chinese leading AI developers of intentionally copying American AI models in a joint advisory released on Tuesday. Beijing rejected the allegations today, with the dispute landing some days before President Donald Trump is expected to host Chinese President Xi Jinping in Washington.

The joint advisory released by the FBI, National Security Agency and Cybersecurity and Infrastructure Security Agency stated that Chinese firms had been taking capabilities from U.S. frontier AI systems since late 2024. These agencies claimed that Anthropic’s Claude, OpenAI’s ChatGPT, Google’s Gemini and xAI’s Grok have been targets of the “distillation” technique, where a smaller model is trained on the outputs of a larger, more capable model to replicate its behavior.

The agencies acknowledged that distillation was a standard, widely used method in AI research, however, they claim the issue lies in the scale and intent from the Chinese firms.

“The sheer scale of these campaigns and their sophistication indicate that distillation is not a supplement to these companies’ AI model development, but the critical core of it,” the advisory said. The agencies also added that the activity was carried out “likely with Chinese government awareness,” although they stopped short of claiming Chinese intelligence services were involved.

Six companies named in advisory

Six Chinese AI developers were mentioned in the joint advisory, including DeepSeek, Moonshot AI, Alibaba, MiniMax, StepFun and Z.ai. The joint advisory document stated specific capabilities that the agencies allege were copied from particular U.S. models, ranging from “legal specialization optimization” to “agentic functions.”

The security agencies also described a gray market of proxies called “transfer stations” that Chinese firms allegedly use to slip past geographic limits, safeguards and terms of service on US products. The Chinese companies are also said to have reduced costs by purchasing premium subscriptions from U.S. firms in bulk and sharing access among teams of developers.

Anthropic had made a similar claim previously, alleging that three Chinese labs ran about 24,000 fraudulent accounts to generate more than 16 million interactions with Claude.

Beijing responds, calls advisory a smear campaign

Beijing responded on Wednesday via Foreign Ministry spokesperson Mao Ning, who said the country’s AI progress was due to “high-level scientific and technological self-reliance” and urged Washington to stop “making groundless accusations,” according to NBC News.

Mao also stated that both China and the United States were “major artificial intelligence countries” that “should step up cooperation.” A Chinese Embassy spokesperson in Washington called the distillation statement a “deliberate attack” on China’s AI industry.

AI governance is expected to feature as a major talking point when Trump meets Xi on September 24.

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