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US accuses Chinese AI firms of ‘malicious’ copying of AI technology

By Thomson Reuters Sep 8, 2026 | 12:49 PM

By Courtney Rozen

WASHINGTON, Sept 8 (Reuters) – U.S. cyber and law enforcement officials accused Chinese AI companies on Tuesday of ​maliciously copying technology from sophisticated American-made ‌AI models through a technique known as distillation, according to a statement from three U.S. security agencies.

Distillation is the process of training smaller AI ‌models ​using output from larger, ⁠more expensive ones ⁠as part of an effort to lower the cost of training a new AI tool. The U.S. officials accused China’s DeepSeek, ​Moonshot AI, Alibaba, MiniMax and StepFun of using variants of American-made AI ⁠models to train their ⁠AI products, according to a statement ​from the U.S. National Security Agency, the Cybersecurity ​and Infrastructure Security Agency, and the FBI. ‌The companies did so “likely with Chinese government awareness,” according to the agencies.

“China-based AI companies are engaging in aggressive, malicious and targeted ⁠distillation activities at an industrial scale,” the officials said.

U.S. officials made the allegations as the Trump ⁠administration prepares ‌for Chinese President Xi Jinping’s ⁠visit to the U.S. in ​late ‌September. The U.S. and China ​are also ⁠gearing up to discuss AI safety risks during a dialogue planned for mid-September, Reuters previously reported.

(Reporting by Courtney Rozen in Washington and AJ Vicens in Detroit; Editing by Chris Reese, ​Rod Nickel)