- US State Department says China is stealing US intellectual property
- US AI models being ‘distilled’ to produce cheaper models for China
- Deepseek, Moonshot AI and MiniMax accused of alleged theft
The US State Department has accused Chinese AI companies of stealing intellectual property from US artificial intelligence models.
The White House recently accused China of “systematically” distilling and extracting American AI models, but is now blaming Chinese companies directly.
A new cable has issued a global warning and directly accused Chinese AI companies such as Deepseek, Moonshot AI and MiniMax of distilling American AI models to produce their own models.
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Steal intellectual property
The State Department says the cable was released to “warn about the risks of using AI models distilled from U.S. proprietary AI models, and lay the groundwork for possible tracking and outreach by the U.S. government.”
AI models require large amounts of high-quality data to train, but it is possible to “distill” a smaller model from a larger model. The smaller model is trained using the results of the larger model, significantly reducing the cost of producing it.
The Chinese embassy in Washington previously denied the accusations, saying Beijing “attaches great importance to the protection of intellectual property rights.”
Chinese companies have released a number of powerful, low-cost AI models that have disrupted the AI market – including the release of the DeepSeek-V3 and DeepSeek-R1 models that rivaled their ChatGPT counterparts but with a significant reduction in cost and computing power.
Chinese AI companies Moonshot AI and MiniMax were also mentioned in the cable, which asks diplomatic staff around the world to raise “concerns about adversaries’ extraction and distillation of USAI models” with their foreign counterparts.
US President Donald Trump is due to meet Chinese President Xi Jinping in May 2026, and the latest accusations are likely to raise tensions between the two leaders.
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