US accuses six Chinese AI firms of industrial-scale copying of frontier models
US security agencies say six Chinese AI companies have been distilling capabilities from leading American AI models since late 2024. They urge US firms to tighten monitoring and even secretly downgrade suspected accounts to weaker models.
Three US government agencies — the National Security Agency (NSA), the Cybersecurity and Infrastructure Security Agency (CISA), and the FBI — issued a joint statement on Tuesday naming six Chinese AI companies accused of large-scale copying, or "distillation," of leading US artificial intelligence models. The named firms are DeepSeek, Moonshot AI, Alibaba, MiniMax, StepFun, and Z.AI. According to the agencies, these companies have since at least late 2024 been systematically extracting capabilities from US models including Claude, GPT, Gemini, and Grok, likely with awareness from the Chinese government.
The agencies said this kind of large-scale extraction allows Chinese firms to significantly shorten development timelines and cut costs when building their own frontier models. Attack methods cited include bulk purchases of fake accounts used to send coordinated batches of nearly identical prompts, sometimes numbering in the millions, as well as prompt-injection techniques designed to force models to reveal their hidden chain-of-thought reasoning. As an example, agencies said DeepSeek instructed models to write out their internal reasoning step by step.
To counter this, the agencies recommended that US AI companies improve detection of suspicious account activity and query volumes, and strengthen identity verification for users. They also suggested that firms could secretly switch suspected accounts to less capable model versions, or subtly degrade response quality, without notifying the affected users — a step meant to reduce the value of stolen data. The agencies acknowledged this could also inconvenience legitimate users, who might unexpectedly receive shorter or lower-quality answers without explanation.
China has rejected the accusations. A spokesperson for its Ministry of Foreign Affairs, Mao Ning, called on the US to focus on cooperation rather than "groundless accusations," while a Chinese Embassy spokesperson accused the Trump administration of running a smear campaign. The dispute comes as China has unveiled a plan to sharply expand its computing capacity over the next five years, and just weeks before a planned meeting between Donald Trump and Xi Jinping on September 24.
