Washington accuses Chinese AI firms of ‘systematic’ theft

The US accusation of systematic AI model theft by Chinese firms like DeepSeek and Moonshot AI points to escalating tech tensions, particularly in the run-up to a Trump-Xi meeting. While distillation is a common industry practice, Washington claims Chinese companies have deployed it at an illicit scale, potentially with government awareness, to gain an unfair advantage. This strategy allows Chinese firms to achieve significantly shorter AI development timelines and reduce financial expenditures in training frontier models, using millions of exchanges and requests to mimic US models from OpenAI, Anthropic, Google, and xAI. The thing to watch for Asia is how this impacts the regional AI ecosystem. Chinese foreign ministry spokeswoman Mao Ning has called for cooperation, but the US pressure on Chinese AI companies could lead to further restrictions or a more bifurcated global AI market. This could force Asian companies to choose between US and Chinese AI stacks, affecting innovation and market access across the region.