The White House on Thursday accused China of stealing U.S. artificial intelligence labs’ mental property on an industrial scale in a memo that threatens to strain relations ahead of a summit between U.S. and Chinese leaders next month.
“The US government has information indicating that foreign entities, principally based in China, are engaged in deliberate, industrial-scale campaigns to distil US frontier AI systems,” Michael Kratsios, director of the White House Office of Science and Technology Policy, wrote in a memo shared on social media on Thursday and first reported by the Financial Times.
“Leveraging tens of 1000’s of proxy accounts to evade detection and using jailbreaking techniques to show proprietary information, these coordinated campaigns systematically extract capabilities from American AI models, exploiting American expertise and innovation,” he added.
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The Chinese Embassy in Washington said it opposes “the baseless allegations,” adding that Beijing “attaches great importance to the protection of mental property rights.”
The memo, released just weeks before U.S. President Donald Trump is set to go to Chinese President Xi Jinping in Beijing, guarantees to lift tensions in a long-running tech war between the rival superpowers, which had been lowered by a detente brokered last October.
It also raises questions on whether Washington will allow Nvidia’s NVDA.O powerful AI chips to be shipped to China. The Trump administration gave a green light to the sales in January, with conditions. On Wednesday, nonetheless, Commerce Secretary Howard Lutnick indicated that no shipments had yet been made.
Distillation is the strategy of training smaller AI models using the output of larger ones as a part of an effort to lower the prices of coaching a strong latest AI tool.
The memo, addressed to government agencies, says the administration will share information with American AI firms concerning the distillation efforts, and “explore a spread of measures to carry foreign actors accountable” for the campaigns.