The Trump administration on Thursday accused Chinese companies of waging an “industrial-scale campaign” to steal U.S. artificial intelligence systems and said it would consider ways to hold foreign companies accountable.
“There is nothing innovative about systematically extracting and imitating the innovations of American industry,” Michael Crasios, President Donald Trump’s top science and technology adviser, said in a memo about China’s alleged “distillation” operation to train smaller AI models from larger ones.
The U.S. government has previously accused China of targeting U.S. AI technology and intellectual property.
Kratsios warned that as large-scale “distillation” operations become easier to detect and prevent, companies “building their AI capabilities on such weak foundations” should lose confidence in “the integrity and reliability of the models they produce.”
He said that according to U.S. intelligence, the campaign to “distill” America’s frontier AI systems is coming primarily from organizations based in China.
Kratsios said the effort involved using tens of thousands of proxy accounts and jailbreak technology to covertly “expose sensitive information.”
The advisor pointed out that trying to copy the US model through a “covert and unauthorized distillation campaign” will not result in an AI system with the same performance as the original.
But he said this would “allow foreign companies to release products that perform as well on some benchmarks at a fraction of the cost.”
It also allows distillers to “deliberately remove security protocols from the resulting model, reinstating the mechanisms by which the AI model is ideologically neutral and truth-seeking,” Kratsios said.
The Chinese embassy in Washington did not immediately respond to a request for comment on the memo.
Distillation is not inherently inconsistent with a competitive AI ecosystem, Kratsios said, and can play an “important” role if it is “legitimately used to generate smaller, lighter models from more advanced systems.”
“However, industrial distillation efforts designed to systematically undermine U.S. research and development and gain access to classified information are unacceptable,” he said.
The Trump administration plans to respond by sharing information about hostile campaigns “including the tactics employed and the actors involved” with U.S. AI companies.
Kratsios also said he would “consider various measures to hold foreign actors accountable.”
—CNBC’s Megan Cassella contributed to this report.
