- US State Department says China is stealing US intellectual property
- US AI models are being ‘distilled’ to produce cheaper models for China
- Deepseek, Moonshot AI and MiniMax accused of alleged theft
The US State Department accused Chinese AI companies of stealing the intellectual property of US AI models.
The White House recently accused China of “systematically” distilling and mining American AI models, but is now accusing Chinese companies directly.
A new cable 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 issued to “warn of the risks of using AI models drawn from proprietary US AI models and lay the groundwork for potential monitoring and disclosure by the US government.”
AI models require large amounts of high-quality data to train, but it is possible to “distill” a smaller model from a large one. The smaller model is trained using the results of the larger model, which significantly reduces the cost of its production.
The Chinese Embassy in Washington previously denied the allegations, stating that Beijing “attaches great importance to the protection of intellectual property rights.”
Chinese companies have launched a number of powerful, low-cost AI models that have revolutionized the AI market, notably the launch of the DeepSeek-V3 and DeepSeek-R1 models that rivaled their ChatGPT counterparts but with a significant reduction in cost and computing power.
Chinese artificial intelligence companies Moonshot AI and MiniMax were also mentioned in the cable, which asks diplomatic staff around the world to raise “concerns about the extraction and distillation of USAI models by adversaries” with their foreign counterparts.
US President Donald Trump is due to meet Chinese President Xi Jinping in May 2026, and the latest allegations are likely to increase tensions between the two leaders.
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