U.S. criticizes China’s AI industry ahead of May U.S.-China summit, accusing it of stealing U.S. technology

[Financial News] The U.S. government, which is set to hold a summit in China next month, accused Chinese IT companies of stealing American artificial intelligence (AI) technology.

On the 23rd (local time), Michael Kratsios, director of the White House Office of Science and Technology Policy (OSTP), posted on social media platform X that "the United States has obtained evidence that China-based companies are carrying out industrial-scale 'distillation' to steal U.S. AI technology."
Distillation refers to the process of training an AI model by using the responses of another AI model as learning material to create a model with similar capabilities. In 2024, Chinese company DeepSeek unveiled its AI model DeepSeek-V3 and claimed it had trained the model at one-hundredth the cost of its U.S. rivals.
In connection with this, OpenAI warned at a U.S. House of Representatives hearing in February that DeepSeek was using distillation techniques to improperly extract outputs from U.S. AI models. At the time, John Moolenaar, the Republican chairman of the United States House Select Committee on Strategic Competition between the United States and the Chinese Communist Party from Michigan, criticized China, saying, "Stealing, copying and stripping are classic CCP tactics," and added that "Chinese companies will continue to extract U.S. AI models and exploit them for their own gain."
Kratsios said China is systematically obtaining U.S. innovations by using tens of thousands of proxy accounts and jailbreak techniques that prompt specific content generation. He added that foreign companies building models on a weak foundation cannot be confident in their models' integrity or reliability.
He warned that the United States will share information with U.S. AI companies about foreign distillation attempts and will consider a range of measures to hold foreign actors involved in distillation accountable. He also said he would send a separate letter urging action from each department in the Donald Trump administration.

Embassy of the People's Republic of China in the United States of America spokesman Liu Pengyu rejected the U.S. claim through the Financial Times (FT). Liu said, "China has always been committed to promoting scientific and technological progress through cooperation and healthy competition."
The remarks came ahead of Donald Trump's visit to China. White House press secretary Karoline Leavitt said in an announcement on the 25th of last month that the U.S.-China summit would "take place in Beijing, China, on May 14-15." Trump had originally been scheduled to visit China from late March to early this month, but the trip was postponed once after the Iran War began.
Meanwhile, U.S. media reported on the 6th that major American AI companies, including OpenAI, Anthropic and Google LLC, are sharing information about Chinese companies stealing AI technology. The companies are said to be using the Frontier Model Forum, a nonprofit consortium founded with Microsoft Corporation in 2023.

pjw@fnnews.com Park Jong-won Reporter