White House memo claims mass AI theft by Chinese firms

the white house issued an internal memo claiming chinese firms are running "industrial-scale campaigns" to steal us ai technology through a process called "distilling." michael kratsios, director of science and technology policy, wrote that "foreign entities, principally based in china" are exploiting american companies by copying their ai models. the memo outlined four steps: sharing threat intel with us ai firms, coordinating defenses, developing best practices, and exploring accountability measures. no specific actions were detailed. a representative of china's us embassy in washington dc pushed back, calling it "unjustified suppression" and saying china's development is "the result of its own dedication and effort." distillation works by running thousands of fake user accounts to jailbreak ai tools and extract proprietary model data. kratsios warned that models built on stolen foundations should have "little confidence in their integrity." leading ai companies like openai and anthropic have previously flagged this activity. earlier this year, anthropic named three chinese labs — deepseek, moonshot, and minimax — as running distillation campaigns. deepseek, which launched last year and cost only a few million dollars to build, recently suffered a major outage and is expected to release a new model soon. president trump is scheduled to visit china in may.