Key Points Federal intelligence agencies claim Chinese AI developers have been “aggressively” distilling technology from leading American models such as GPT, Claude, Gemini, and Grok The advi
Three US intelligence organizations—the FBI, National Security Agency, and Cybersecurity and Infrastructure Security Agency—released a coordinated statement Tuesday alleging that Chinese AI companies have systematically extracted technological capabilities from premier American AI platforms on an “industrial scale.” The systems reportedly affected include Anthropic’s Claude, OpenAI’s GPT series, Google’s Gemini, and xAI’s Grok, with suspicious activity documented since at least the final quarter of 2024.
BREAKING: China will hold talks with the US but vows to retaliate if Washington targets its AI companies https://t.co/2TjRR7APDH
— Kalshi (@Kalshi) September 10, 2026
The statement explicitly identified several companies: DeepSeek, Alibaba, Moonshot AI, MiniMax, StepFun, and Z.ai. According to US intelligence officials, these operations were conducted “likely with Chinese government awareness” and employed sophisticated routing mechanisms through multiple channels designed to circumvent service agreements.
Intelligence officials further alleged that Chinese entities engaged in mass procurement of premium subscription accounts, which were then distributed among development teams as a cost-reduction strategy during these distillation operations.
China’s Commerce Ministry categorically denied the accusations on Wednesday, characterizing them as “groundless.” Officials emphasized that distillation represents a conventional methodology employed by AI developers internationally, including within the United States. The ministry framed the allegations as evidence of American “anxiety and double standards.”
“If the US suppresses Chinese AI companies under the pretext of targeting distillation, China will take resolute countermeasures,” the ministry said in a statement.
China’s Foreign Affairs Ministry echoed this sentiment, urging Washington to cease making “unfounded accusations.” Spokesperson Mao Ning emphasized that Chinese advances in artificial intelligence stem from independent technological innovation and advocated for international collaboration in the sector.
Chinese officials indicated openness to “constructive and professional discussions” with their American counterparts on AI matters, contingent on principles of equality and mutual advantage. However, they underscored that any punitive US measures against Chinese enterprises would trigger appropriate responses.
This diplomatic friction unfolds mere weeks ahead of a scheduled meeting between President Donald Trump and Chinese President Xi Jinping at the White House for their second summit of the year. Artificial intelligence governance is anticipated to dominate the agenda.
US Treasury Secretary Scott Bessent entered the debate Tuesday during remarks at Southern Methodist University, asserting that China “can never get ahead” of America in the AI race.
“The Chinese distill our models and they can never get ahead of us,” Bessent said.
This controversy underscores the escalating technological rivalry between Washington and Beijing. Chinese AI systems such as Moonshot’s Kimi K3 have established a foothold in American markets, perceived by some users as more cost-effective and efficient alternatives to domestic offerings.
Both OpenAI and Anthropic have independently raised similar concerns about Chinese developers in the past. Tuesday’s coordinated advisory, however, provided unprecedented specificity regarding which American systems were allegedly targeted and the methods employed.
The Chinese companies named in the advisory did not respond to multiple requests for comment.
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