China denies U.S. AI distillation allegations, calls IT double-standard

On September 8, U.S. agencies including the National Security Agency issued a joint statement accusing six Chinese AI firms of illegally distilling U.S. models to extract proprietary knowledge. In response, China’s Commerce Ministry rejected the claims, calling them baseless and politically motivated. The ministry emphasized that distillation is a standard industry practice used globally, including by U.S. firms, and that it promotes efficiency and knowledge sharing. The U.S. accusations, according to the ministry, reflect a double standard, as American companies themselves engage in distillation of Chinese models. The ministry criticized the U.S. for using national security rhetoric to justify monopolistic behavior and suppress competition. It warned that if the U.S. continues to target Chinese AI firms under the guise of distillation, China will respond proportionally. The ministry also highlighted ongoing U.S. legislative and executive actions aimed at restricting Chinese AI development, which it views as an attempt to maintain technological dominance.