US Alerts Allies to Chinese AI IP Theft Efforts

The United States has launched a worldwide diplomatic campaign to alert allies and partners about alleged efforts by Chinese companies to steal intellectual property from American artificial intelligence developers, according to a State Department cable dated April 24. The directive, sent to U.S. embassies and consulates globally, instructs diplomats to raise concerns with foreign counterparts over the unauthorized extraction and replication of U.S. AI models, particularly through a technique known as distillation. This escalation in the U.S.-China technology rivalry comes just weeks before President Donald Trump is scheduled to meet Chinese President Xi Jinping in Beijing.

The cable highlights specific Chinese firms, including AI startup DeepSeek, Moonshot AI, and MiniMax, accusing them of conducting large-scale campaigns to distill capabilities from leading U.S. systems. Distillation involves training smaller, more efficient AI models using outputs generated by larger, proprietary ones, such as those developed by companies like OpenAI and Anthropic. U.S. officials contend that these practices allow foreign actors to create competitive products at a fraction of the cost, while...