A new White House warning is escalating tensions in the global artificial intelligence race, alleging that foreign actors are running large-scale operations to steal advanced US AI technology. The administration says it now has fresh intelligence pointing to what it describes as an organized effort to copy American breakthroughs and weaken US leadership in AI innovation.

The claims are already fueling geopolitical friction, sharpening scrutiny of China’s fast-growing AI sector, and raising questions about how vulnerable top US models may be to systematic extraction and replication.

WHITE HOUSE FLAGS “INDUSTRIAL-SCALE CAMPAIGNS” TARGETING US AI

Michael Kratsios, Director of Science and Technology Policy, wrote in an internal memo that the administration had new information indicating "foreign entities, principally based in China" were exploiting American firms.

He said these operations rely on a process known as “distilling,” where advanced AI systems are effectively copied by studying outputs from US-developed models and using that data to recreate competing systems.

Kratsios warned the goal is "to systematically undermine American research and development and access proprietary information".

CHINA PUSHES BACK AGAINST US ALLEGATIONS

A representative of China’s US embassy in Washington DC rejected the claims, saying its progress in artificial intelligence comes from independent innovation and global collaboration.

The official said "the unjustified suppression of Chinese companies by the US" is unfair and counterproductive.

The embassy added:

"China is not only the world's factory but is also becoming the world's innovation lab,"

and further stated:

"China's development is the result of its own dedication and effort as well as international cooperation that delivers mutual benefits."

INSIDE THE “DISTILLATION” TACTICS RAISE SECURITY CONCERNS

According to the memo, distillation campaigns involve the use of thousands of coordinated accounts that interact with AI chatbots and tools, appearing to be normal users.

These accounts are then used to probe systems, attempt so-called “jailbreaks,” and extract hidden behavioral patterns or model responses. The information is stored and later used to train competing AI systems.

Kratsios described the government’s planned response as an effort to stop what he called malicious exploitation and protect US innovation.

The White House says it will take four major steps:

• Sharing more information with US AI companies about "tactics employed and actors involved" in distillation campaigns
• Working to "better coordinate" with companies to fight the attacks
• Developing "best practices to identify, mitigate, and remediate" them
• "explore" how the White House can hold foreign actors accountable for such distillation

The memo did not include specific enforcement actions or penalties for foreign entities found responsible.

A White House spokesperson declined to comment beyond the memo.

AI INDUSTRY ON ALERT AS MAJOR FIRMS REPORT COPYING ATTEMPTS

Leading US artificial intelligence companies have repeatedly warned about similar activity. Firms such as OpenAI and Anthropic have said they are actively dealing with distillation-based attempts to replicate their systems.

Earlier this year, Anthropic described distillation “attacks” involving three AI laboratories: DeepSeek, Moonshot, and MiniMax. The company said it found evidence that all three were attempting to copy its models using these techniques. All three are based in China.

OpenAI has also accused DeepSeek of copying its technology.

DeepSeek, Moonshot, and MiniMax did not immediately respond to requests for comment.

DeepSeek, launched last year, quickly became one of the most widely used AI chatbots globally. The company said its model was developed at a cost of only a few million dollars, significantly lower than the hundreds of billions being invested by US tech giants building competing systems.

RISING STAKES IN THE GLOBAL AI ARMS RACE

Kratsios warned that the long-term integrity of AI systems could be at risk if distillation techniques continue to scale unchecked.

He said:

"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 the integrity and reliability of the models they produce,"

The memo comes as competition intensifies between US and Chinese AI developers, with both sides racing to dominate the next generation of foundational models.

POLITICAL BACKDROP AND NEXT STEPS

The announcement adds another layer of tension ahead of expected diplomatic engagement, with US President Donald Trump scheduled to visit China in May.

While the memo signals a tougher US stance on protecting AI intellectual property, it leaves open key questions about enforcement, international cooperation, and how far Washington is prepared to go to secure its technological advantage.