White House Identifies Chinese Firms in 'Industrial-Scale' AI Theft Campaigns

The White House has signalled a closer collaboration with US artificial intelligence (AI) firms to counter what it describes as "industrial-scale campaigns" by foreign entities seeking to steal technological advancements. Michael Kratsios, Director of Science and Technology Policy, stated in an internal memorandum that new intelligence suggests "foreign entities, principally based in China," are exploiting American companies.

These firms are reportedly engaged in "distilling," effectively copying AI technology developed by US companies. Kratsios detailed the objective as an attempt to "systematically undermine American research and development and access proprietary information."

A representative for China's US embassy in Washington DC rejected these claims, attributing China's AI development to "its own dedication and effort as well as international cooperation." The representative further criticised the "unjustified suppression of Chinese companies by the US," asserting that China is evolving into "the world's innovation lab."

While the memo did not outline specific actions against these foreign entities, it stated the White House would be taking four measures to prevent and halt "malicious exploitation." The specific plans were not detailed publicly.

Distillation campaigns involve firms operating thousands of individual accounts for AI chatbots or tools, mimicking normal users. These accounts then attempt to "jailbreak" or expose information about AI models that is intended to remain private. This information is subsequently used to build and train their own AI models.

Kratsios warned that entities relying on such "fragile foundations" would ultimately produce models lacking "integrity and reliability." Although Kratsios did not name specific foreign entities, leading AI companies like OpenAI and Anthropic have reported dealing with such distillation activities. Anthropic previously identified three Chinese AI laboratories—DeepSeek, Moonshot, and MiniMax—as attempting to copy its models through distillation. OpenAI has also accused DeepSeek of similar actions.

DeepSeek, released last year, gained popularity despite its low development cost, estimated at only a few million dollars, significantly less than the hundreds of billions invested by other AI firms. The company experienced a major outage last month and is expected to release a new AI model version soon. US President Donald Trump is anticipated to visit China in May.