American Artificial Intelligence (Artificial Intelligence) Company Anthropic and OpenAI have warned that Chinese companies are copying their advanced artificial intelligence technology without permission. The companies said such plagiarism could undermine U.S. leadership in artificial intelligence and create serious national security risks. They claim that Chinese companies are using a method called “distillation” to build powerful AI chatbots faster and at a lower cost.
Distillation is the process of using a powerful AI model to train a smaller AI model. Former White House Chief Information Officer Theresa Payton said via the New York Post that AI experts say the method is legal when companies use it on their own AI systems, but becomes illegal or unethical when rival companies copy another company’s AI without permission.
How Anthropic accused Alibaba of AI theft
According to Anthropic’s letter to Congress, on June 24, Anthropic sent a letter to the U.S. Congress accusing Chinese technology giant Alibaba of “shameless” artificial intelligence theft through distillation. Anthropic said Alibaba employees allegedly used fake accounts to collect data from its Claude AI chatbot. The company claims that between April 22 and June 5, nearly 25,000 fraudulent accounts generated approximately 28.8 million outputs from Claude.
The data is allegedly used to improve Alibaba’s own artificial intelligence systems, Anthropic said. Shortly after the allegations became public, Alibaba reportedly banned its employees from using human claude Chatbot. However, sources told the New York Post that the move had little effect because Anthropic has banned Chinese users from accessing Claude.
The New York Post said it had contacted Alibaba for a response to the allegations. Earlier, in February, OpenAI also accused Chinese artificial intelligence company DeepSeek of “constant efforts to free ride” on its technology. In the same month, Anthropic also accused DeepSeek, Moonshot, and Minimax of using distillation to improve their AI models. Google also warned in February of rising malicious cyber activity from China, Iran, North Korea and Russia.
Why are Chinese artificial intelligence companies growing rapidly?
These practices help Chinese artificial intelligence companies provide powerful artificial intelligence services at prices far lower than those of American companies. The report said Chinese companies are luring customers by lowering fees for artificial intelligence “tokens” that are required to use artificial intelligence chatbots. According to the New York Post, six of the ten most commonly used artificial intelligence models in the world are from Chinese companies, including Z.AI, Minimax and DeepSeek.
The performance of these Chinese AI models is said to be almost as good as Anthropic’s Claude and OpenAI’s ChatGPT. According to the New York Post, citing a source close to Anthropic, China is currently about 6 to 9 months behind the United States in the development of advanced artificial intelligence. The same source said that without distillation, China could be more than 18 months behind. The timing gap is significant because it gives the United States a significant technological advantage, the source added.
Why the US sees AI theft as a security risk
Anthropic regularly notifies White House national security officials of these alleged AI theft attempts. The company also briefed members of Congress and other parts of the U.S. government. According to the New York Post, citing sources, sources warned that if these attacks continue, they may weaken the United States’ leadership in artificial intelligence technology. They also warned that stolen AI technology could be used to build advanced hacking tools or autonomous weapons.
The Trump administration has identified AI distillation as one of the biggest challenges in the global race for artificial intelligence. In April, the White House Office of Science and Technology issued a memo accusing foreign organizations, primarily from China, of large-scale technology theft, according to the White House memo. Former White House technology official Theresa Payton described AI distillation as “the ultimate form of industrial theft.” She said this allows foreign competitors to copy the best U.S. AI work without having to spend billions on research.
Payton also said the technology could help China bypass U.S. restrictions on advanced artificial intelligence computer chips by using U.S. artificial intelligence systems. According to the New York Post, China faces U.S. export restrictions on high-end artificial intelligence chips produced by companies such as Nvidia. Because of these limitations, experts say copying existing AI models has become an important strategy for Chinese AI companies.
How the U.S. plans to stop AI from replicating
According to an OpenAI spokesperson through the New York Post, OpenAI also briefed the U.S. Congressional and Executive Branch Committee on China and other congressional staff in June. In the briefing, OpenAI discussed how China is suspected of using artificial intelligence for malicious influence operations. open artificial intelligence It also said stronger government policies were needed to punish those responsible for AI distillation attacks. The company wants the NSA’s AI Security Center to become a central place where AI companies can share information about security threats and AI theft attempts.
Experts stress that distillation itself is not illegal, as AI companies often use it internally to improve their own systems. Payton said the problem starts when another company copies a competitor’s AI model without permission to build its own product.
According to the New York Post, in April this year, White House technology adviser Michael Kratsios said that the U.S. government planned to improve intelligence sharing and coordination with private companies to combat artificial intelligence theft. Krasios also said the government wants to take new steps to hold foreign actors accountable for such attacks.
New U.S. law blocks China’s artificial intelligence growth
According to the New York Times, the House Select Committee on China released a report in April on China’s history of AI chip smuggling and AI model distillation. The committee is currently pushing for new laws to reduce the threat. One of the proposals is the Artificial Intelligence Oversight Act, which would require government approval to sell advanced artificial intelligence chips to countries deemed to pose security risks.
Committee chairman John Moolenaar said China’s progress in artificial intelligence depends on theft rather than innovation. Mueller said China’s actions threaten both U.S. technology companies and U.S. national security. He also said Congress will continue to work to strengthen export controls and close loopholes that China can use to obtain advanced artificial intelligence technology. Jared Dunmon, a former Pentagon artificial intelligence official, said it was difficult to measure how much of China’s AI progress came from copying versus real research. Deng Meng said the problem is not necessarily that China’s artificial intelligence is better than that of the United States.
Instead, he warned that Chinese companies could build AI systems that were nearly as good as U.S. systems at a much lower price. Deng Meng said that cheaper Chinese artificial intelligence can encourage companies and developers around the world to use Chinese artificial intelligence platforms instead of American ones. Experts say that if this trend continues, it could weaken the business of American artificial intelligence companies and weaken the United States’ leadership in artificial intelligence.
