Three of America’s most powerful security agencies just pointed a very large finger at six Chinese AI companies, accusing them of systematically siphoning knowledge from the country’s most advanced AI models. The joint advisory from CISA, the NSA, and the FBI describes what officials are calling an industrial-scale extraction campaign that has been running since late 2024.
The targets: Anthropic’s Claude, OpenAI’s GPT series, Google’s Gemini, and xAI’s Grok. The accused: DeepSeek, Moonshot AI, Alibaba, MiniMax, StepFun, and Z.AI. The method: knowledge distillation, a machine learning technique that’s perfectly legal on its own but allegedly weaponized here to copy the outputs of frontier AI systems at a staggering scale.
How distillation becomes espionage
Knowledge distillation is a well-known technique in machine learning. A smaller “student” model learns to mimic the behavior of a larger “teacher” model by studying its outputs. The technique itself isn’t controversial. Researchers use it all the time to build lighter, faster models.
What makes this case different, according to US officials, is the sheer scale and the alleged coordination behind it. The advisory describes millions of requests made against American AI systems, resulting in the extraction of billions of tokens worth of output data.
