US AGENCIES WARN OF CHINESE AI TECH THEFT

The three federal agencies released a coordinated advisory detailing what they describe as "industrial-scale" efforts by Chinese artificial intelligence developers to extract and replicate proprietary technology. Distillation—a technique that compresses large AI models into smaller, more efficient versions—is being weaponized to bypass years of development and research investment by U.S. and international AI firms, according to the warning. DeepSeek, which has gained significant attention for releasing capable AI models at low cost, was specifically named alongside other Chinese companies engaging in the practice. The advisory represents an escalation in U.S. government concerns about intellectual property theft in the AI sector. Previous warnings have focused on cyberattacks and espionage; this targets the use of legitimate-appearing technical methods to gain competitive advantage. The agencies did not announce immediate enforcement actions but signaled heightened scrutiny of Chinese AI development activities.