China hits back after US accuses DeepSeek, Alibaba and others of distilling American AI models

China has hit back against U.S. allegations that Chinese AI companies systematically extracted capabilities from American AI models through distillation.

In a statement released Wednesday, a spokesperson for China's Ministry of Commerce said the U.S. claims were groundless, arguing that the U.S. move "politicizes and instrumentalizes distillation," a "common practice" in the AI field.

The U.S. Cybersecurity and Infrastructure Security Agency, the National Security Agency, and the FBI issued a joint security alert on Tuesday, warning that Chinese AI firms have been targeting U.S. companies to "systematically extract proprietary models through knowledge distillation campaigns."

The American agencies specifically named six companies - DeepSeek, Moonshot AI, Alibaba, MiniMax, StepFun, and Z.AI - and alleged that their activities were conducted "likely with Chinese government awareness."

The U.S. also claimed that the distillation campaign could enhance China's "military and cyberattack capabilities that could be used against the U.S. and our allies."

Knowledge distillation is a machine learning technique involving training a smaller AI model using output from more capable ones, according to the U.S. agencies' statement.

The Chinese MoC claimed that distillation is a common practice for different models to learn from one another. "It is, in essence, a neutral technical method, and model companies around the world, including U.S. companies, use it," the ministry said.

"The U.S. approach is a typical example of double standards," the MoC spokesperson added. "China’s open-source models are available to companies around the world, including U.S. companies, facilitating the research and development of relevant models. Reports on model development by U.S. companies have also disclosed that they extensively distill Chinese models."

The MoC further alleged that the U.S. is pursuing a "monopoly" of the AI industry. "If the U.S. suppresses Chinese AI companies under the pretext of targeting distillation, China will take resolute countermeasures," the MoC said.

Chinese Foreign Ministry spokesperson Mao Ning also said Wednesday that China's AI development is the result of its pursuit of high-level technological self-reliance.

"We hope the U.S. will earnestly implement the important consensus reached by the leaders of the two countries and refrain from making false accusations against and smearing China," said Mao.