Alibaba, DeepSeek have 'systematically' siphoned AI models, says US

The Chinese firms have used a technique known as distillation since 2024 to access and draw information from US AI models at an industrial scaleto train their own systems, said US agencies

By Michael Shepard

 

US security agencies accused China’s top AI companies including DeepSeek and Kimi maker Moonshot AI of systematically extracting proprietary knowledge from American firms and warned Silicon Valley developers to protect their work.

 

The Chinese firms have used a technique known as distillation since at least 2024 to access and draw information from US AI models “at an industrial scale” to train their own systems, according to a joint statement issued Tuesday by the National Security Agency, FBI and Cybersecurity and Infrastructure Security Agency. The agencies specifically accused DeepSeek, Moonshot, Alibaba Group Holding Ltd., MiniMax, StepFun and Z.AI Co. of the practice.

 

 

Issued weeks before President Donald Trump is scheduled to welcome his Chinese counterpart Xi Jinping to Washington for a high-stakes summit, the accusations threaten to intensify friction between the world’s two largest economies. AI has increasingly moved to the center of the US-China rivalry, with each side seeking to dominate the market for the technology.

 

Trump administration officials and American AI developers alike have accused Chinese firms of distilling from US AI models in the past to build their own products. The practice, which can be legitimately deployed by an AI developer that uses its state-of-the-art model to effectively teach a more power-efficient version, is seen as an improper shortcut when done without approval. 

 

Tuesday’s security alert takes those accusations one step further, detailing which US systems were distilled by each of the Chinese companies and for what reasons, including to improve their own models’ abilities to solve math problems and review code.

 

The security agencies went as far as to say the companies are likely siphoning information from American models “with knowledge of the Chinese government” and accused the firms of intentionally skirting US companies’ use restrictions to access their systems. 

 

“China-based AI companies route distillation requests through multiple pathways to gain unauthorized access, consequently violating U.S. AI companies’ terms of use,” they said in the notice. 

 

In an emailed statement, Chinese embassy spokesperson Liu Chang rejected the US accusations, calling them a “deliberate attack on China’s development and progress in the AI industry.” He added that “China opposes politicizing and instrumentalizing trade and tech issues. Such actions will only stifle global AI advances and serve no one’s interests.”

 

Representatives for DeepSeek, Moonshot AI, Alibaba, MiniMax, StepFun, and Z.ai didn’t immediately respond to requests for comment. 

 

The security agencies advised US AI developers to take “immediate action,” including altering responses to suspected malicious distillation attempts and sharing their intelligence on distillation campaigns with one another.  

 

OpenAI and Anthropic PBC have increasingly complained that their Chinese rivals are gaining unauthorized access to their models to develop their own chatbots at a fraction of the cost. In June, Anthropic accused Alibaba of waging a large-scale effort to “illicitly” access its Claude model using thousands of fraudulent accounts, Bloomberg News reported previously. 

 

The Trump administration vowed earlier this year to take further steps to address the practice. US lawmakers are also considering measures aimed at penalizing Chinese companies found to be copying unfairly from their American counterparts. Tuesday’s security advisory may serve as a means of accelerating those efforts. 

 

US Treasury Secretary Scott Bessent warned in July of the prospect of sanctions for any Chinese venture found to engage in intellectual property theft. Bessent spoke days after Moonshot released Kimi K3, a model that ignited widespread concerns about Chinese firms gaining ground against the US on AI.