China Rejects US Allegations of AI Model Theft as Tech Rivalry Intensifies

BEIJING/WASHINGTON — China has rejected accusations from the United States that Chinese artificial intelligence companies systematically copied the capabilities of American AI models, describing the allegations as “groundless” as competition between the two countries over technological leadership intensifies.

The dispute follows an advisory issued Tuesday by a US cyber defence agency accusing several leading Chinese AI companies, including DeepSeek and Moonshot AI, of using what Washington described as “industrial-scale knowledge distillation campaigns” to obtain the capabilities of US-developed models.

The allegations come ahead of an expected meeting between US President Donald Trump and Chinese President Xi Jinping at the White House later this month, with artificial intelligence expected to feature prominently in discussions between the two leaders.

Beijing Accuses Washington of Seeking an AI Monopoly

China’s Ministry of Commerce dismissed the US allegations, arguing that Washington was using concerns over AI distillation as a justification for restricting Chinese companies and protecting American technological dominance.

“The US approach is a typical case of using the crackdown on distillation as a pretext to achieve industrial monopoly,” the ministry said in a statement.

It also accused Washington of applying “double standards” in its treatment of AI development.

Knowledge distillation is a technique in which one AI model is trained using the outputs of a larger or more capable model. The approach is widely used in the AI industry to develop smaller or more efficient systems.

Washington, however, alleges that Chinese companies have used the technique on a much larger scale to reproduce the capabilities of American AI systems.

US Lists Several Chinese AI Companies

The US advisory alleged that DeepSeek, Moonshot AI, Alibaba, MiniMax, StepFun and Z.AI used millions of exchanges and requests to extract capabilities from models developed by companies including OpenAI, Anthropic, Google and xAI.

According to the advisory, adopting such techniques can significantly shorten development timelines and reduce the cost of training advanced AI models.

The US agency said the activity had occurred since at least late 2024 and was “likely” carried out with awareness from the Chinese government.

AFP contacted the companies named in the advisory. Moonshot AI declined to comment, while StepFun was not immediately reachable.

China Calls for Cooperation

Chinese Foreign Ministry spokeswoman Mao Ning also rejected the accusations during a regular briefing on Wednesday.

She urged Washington to refrain from what she described as unfounded accusations and attempts to smear China.

Mao said China’s progress in artificial intelligence was the result of increased technological self-reliance and scientific development.

“Both China and the United States are major countries in the field of AI. We should strengthen cooperation,” she said.

Her comments underscore Beijing’s position that competition between the world's two largest economies should not prevent cooperation in emerging technologies.

AI Competition Becomes a New US-China Flashpoint

The dispute comes as Chinese AI companies make rapid advances and increasingly compete with leading US developers.

President Trump faces growing pressure to respond to the success of Chinese models, particularly as some businesses opt for less expensive Chinese alternatives instead of more powerful but costlier systems developed by companies such as Anthropic and OpenAI.

In July, dozens of US startups reportedly urged the Trump administration to avoid imposing an outright ban or broad restrictions on foreign AI models, arguing that tighter controls should primarily be considered in government applications.

China has also previously accused US AI companies of using Chinese examples to train their systems, adding another layer to the increasingly contentious debate over AI training data and intellectual property.

With Washington and Beijing competing for dominance in artificial intelligence, disputes over model training, knowledge distillation, intellectual property and technology controls are likely to remain a major feature of US-China relations.