US blames Chinese AI firms carry out industrial scale theft of trade secrets

US blames Chinese AI firms carry out industrial scale theft of trade secrets.

Chinese artificial intelligence firms are committing “industrial-scale” theft of their American counterparts’ trade secrets to save money and bring the coveted technology to market faster, US federal agencies alleged Tuesday.

Major Chinese tech companies are using “distillation,” which involves training lesser AI models on more advanced ones, to “extract restricted proprietary functionalities and capabilities of U.S. frontier AI models,” the FBI, National Security Agency, and Cybersecurity and Infrastructure Security Agency claimed in an advisory.

Distillation can be a legitimate research technique, but American officials and AI executives have long complained that the volume and targeted manner of Chinese distillation campaigns against US firms amount to stealing. The new advisory puts more evidence behind those accusations and adds to the growing tensions between US and China over AI technology. President Donald Trump has said that AI will be among the discussion topics when he hosts Chinese leader Xi Jinping in Washington, DC, later this month

“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 new advisory says.