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The FBI, NSA, and CISA report that Chinese AI companies are conducting industrial-scale theft of American AI models through distillation.

The FBI, National Security Agency, and Cybersecurity and Infrastructure Security Agency issued a joint advisory stating that top Chinese AI companies have systematically mined cutting-edge American AI models to build their own. This process, known as distillation, involves training lesser AI models on more advanced ones to extract proprietary functionalities. The report identifies DeepSeek, Moonshot AI, Alibaba, MiniMax, StepFun, and Z.AI as leading Chinese developers conducting high-volume distillation campaigns, likely with the awareness of the Chinese government. While distillation is a legitimate research technique, American officials claim the volume and targeted manner of Chinese campaigns amount to intellectual property theft. Treasury Secretary Scott Bessent stated that Chinese firms can never get ahead of the U.S. because they distill American models. The Chinese government has responded by dismissing the allegations, with the Ministry of Foreign Affairs spokesperson Mao Ning stating that China's AI development is a result of high-level technological self-reliance. President Trump is scheduled to meet with Chinese leader Xi Jinping on Sept. 24. During this summit, the administration will discuss AI technology as a primary topic.

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