White House Accuses China of Stealing US AI Technology on an Industrial Scale

Chinese startup DeepSeek uses “knowledge distillation” to train smaller models on the outputs of large models, reducing computing and development costs and placing it at the center of disputes over US-China AI leadership and intellectual property. DeepSeek-V3 was released in December 2024, with its technical report estimating pretraining compute costs at about $5.576 million, drawing scrutiny from US officials.

On April 23, 2026, White House Office of Science and Technology Policy Director Michael Kratsios issued a memorandum accusing Chinese entities of using proxy accounts and jailbreaking techniques to distill US models. Anthropic said in February that DeepSeek, Moonshot AI and MiniMax had used about 24,000 fraudulent accounts to conduct 16 million interactions. The State Department followed with a worldwide cable on April 24 calling for efforts to detect and defend against such activity and hold those responsible accountable.