'Entirely baseless': China rejects US accusations of AI technology theft

The Chinese government on Friday (Apr 24) issued a sharp rebuttal to accusations from the White House, calling claims of a state-sponsored campaign to steal American artificial intelligence (AI) technology "entirely baseless" and a “slanderous smear.” Chinese Foreign Ministry spokesperson Guo Jiakun, when asked during a regular news conference in Beijing said, “They are a slanderous smear against the achievements of China's artificial intelligence industry. China firmly opposes this.”

The diplomatic flare-up follows a sharply worded memorandum released on Thursday (Apr 23) by Michael Kratsios, Director of the White House Office of Science and Technology Policy. In the memo, the administration accused Chinese entities of engaging in "industrial-scale" efforts to extract capabilities from advanced US AI systems using a technique known as “unauthorised distillation.”

Kratosios said, “These foreign entities are using tens of thousands of proxies and jailbreaking techniques in coordinated campaigns to systematically extract American breakthroughs. Foreign entities that build on such fragile foundations should have little confidence in the integrity and reliability of the models they produce.”

The war of words coincides with major breakthroughs in the Chinese tech sector. On the same day as the rebuttal, the Hangzhou-based AI firm DeepSeek released its latest model, DeepSeek-V4, which reportedly matches the performance of leading US models like Gemini in "world knowledge" benchmarks while significantly reducing computing costs.

The timing of the US allegations is tied to the narrowing gap between Silicon Valley and Chinese firms. While US officials argue that China is "buying what it can and stealing what it must," Beijing maintains that its focus on efficiency and low-cost reasoning models is a legitimate competitive advantage.

Steps to be taken by the Trump administration:

• Share information with US AI companies concerning attempts by foreign actors to conduct unauthorised, industrial-scale distillation, including the tactics employed and actors involved.
• Enable the private sector to better coordinate against such attacks.
• Work together with private industry to develop best practices to identify, mitigate, and remediate industrial-scale distillation activities and build strong defences against such activities.
• Explore a range of measures to hold foreign actors accountable for industrial-scale distillation campaigns.