China slams US claims of ‘industrial-scale’ AI theft

China has issued a forceful reply against claims by the United States that top Chinese artificial intelligence companies have engaged in “industrial scale” theft of their US counterparts’ AI models.

The response on Wednesday comes after three US federal agencies – the Federal Bureau of Investigation (FBI), National Security Agency (NSA) and the Cybersecurity and Infrastructure Security Agency (CISA) – accused Chinese AI companies of exploiting American AI models to benefit their own systems.

The joint advisory on Tuesday said Chinese companies like DeepSeek, Alibaba and Moonshot AI had distilled “billions of tokens” from US models since “at least late 2024”, likely with the Chinese government’s “awareness”.

Tokens are the smallest units of text that AI models read, or generate.

On Wednesday, China’s Commerce Ministry dismissed the allegations and accused the US of seeking a “monopoly of the AI industry”.

“If the U.S. suppresses Chinese AI companies under the pretext of targeting distillation, China will take resolute countermeasures,” the ministry said in a statement to the Associated Press.

Distillation is a method in which lesser AI models are trained on more advanced ones. The ministry said the practice is commonplace in the AI industry, including by US AI companies. But American firms say the volume in which it’s being done by Chinese AI models amounts to stealing.

“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 US advisory claimed.