U.S. accuses China of "industrial-scale" campaigns to steal AI secrets

The https://www.axios.com/politics-policy/donald-trump" target="_blank">Trump administration on Thursday accused China-backed actors of running "deliberate, industrial-scale campaigns" to distill and copy American frontier https://www.axios.com/2026/04/22/anthropic-no-kill-switch-ai-classified-settings" target="_blank">AI models.

Why it matters: The accusation pushes the https://www.axios.com/2025/09/18/white-house-ai-race-china" target="_blank">U.S.-China AI rivalry into more confrontational territory — and could complicate President Trump's upcoming visit to Beijing.

Driving the news: Michael Kratsios, director of the White House Office of Science and Technology Policy, sent a https://whitehouse.gov/wp-content/uploads/2026/04/NSTM-4.pdf" target="_blank">memo Thursday to federal agency heads accusing mostly China-based actors of using proxy accounts to evade detection and jailbreak models to "expose proprietary information" and "extract capabilities from American AI models."

• Distillation attacks involve querying proprietary models, like Claude or Gemini, millions of times via APIs to build datasets that replicate how the systems behave.
• Kratsios said these campaigns enable foreign actors to release models that appear to match U.S. AI capabilities at a fraction of the cost.
• He added that such tactics can also strip away guardrails meant to keep outputs "ideologically neutral and truth-seeking."

State of play: The warning comes as Trump prepares for a https://www.bbc.com/news/articles/c05dpr1m71go" target="_blank">highly anticipated trip next month to Beijing, where he's expected to push for economic concessions and reset parts of the U.S.-China relationship.

• OpenAI and Anthropic both https://www.cnbc.com/2026/02/24/anthropic-openai-china-firms-distillation-deepseek.html" target="_blank">said earlier this year that China-based firms — including DeepSeek, Moonshot AI and MiniMax — were behind wide-scale distillation attacks on their models.

The big picture: The U.S. has long accused China of stealing intellectual property from American companies as part of broader https://www.axios.com/2025/03/05/us-china-indictments-treasury-breach" target="_blank">cyber espionage efforts.

• In 2024, the Justice Department https://www.axios.com/2024/03/19/ai-insider-threat-espionage-china" target="_blank">indicted a former Google software engineer for stealing AI trade secrets and sharing them with two Chinese companies.

Yes, but: Kratsios argued the abilities of these distilled models may not hold up over time.

• "As methods to detect and mitigate industrial-scale distillation grow more sophisticated, foreign entities who build their AI capabilities on such fragile foundations should have little confidence in their integrity and reliability of the models they produce," he wrote.

What's next: Kratsios said the Trump administration plans to share intelligence with U.S. AI companies on these campaigns, including the tactics they used, and help the private sector develop defenses.