The U.S. State Department issues global warning on Chinese

The US State Department has ordered a global diplomatic offensive to denounce what it describes as widespread maneuvers by Chinese companies, including the startup DeepSeek, to steal intellectual property from American artificial intelligence laboratories, according to a diplomatic cable consulted by Reuters.

The note specifies that its objective is to ‘warn of the risks associated with using AI models derived from distilling American proprietary models, and to lay the groundwork for potential awareness-raising actions by the US government.’

Distillation is a process of training lighter AI models using the results of larger and more expensive models, with the goal of reducing the development costs of a new high-performing tool.

DeepSeek, the Chinese startup whose low-cost model stunned the sector last year, unveiled a preview of a highly anticipated new model on Friday, tailored for Huawei chips, highlighting China’s increasing autonomy in this field.

The State Department, DeepSeek, and the Chinese embassy in Washington did not immediately respond to requests for comments.

The cable also mentions Chinese companies Moonshot AI and MiniMax. Neither of them reacted immediately.

This week, the White House made similar accusations, which the Chinese embassy in Washington dismissed as ‘baseless allegations’, adding that Beijing ‘attaches great importance to the protection of intellectual property rights.’

The document, dated Friday and transmitted to diplomatic and consular posts worldwide, instructs diplomatic personnel to address with their foreign counterparts ‘concerns regarding the extraction and distillation of American AI models by adversaries.’

‘A demarche request and separate message have been sent to Beijing to be raised with China,’ the document states.

This cable, whose existence had not been revealed until now, signals that the Trump administration is taking seriously the growing concerns about Chinese distillation of American AI models.

‘AI models developed from clandestine and unauthorized distillation campaigns enable foreign actors to market products that appear comparable on some benchmark tests for a fraction of the cost, but do not replicate the full capabilities of the original system,’ the note says, adding that these campaigns ‘willfully bypass security protocols of resulting models and undermine mechanisms ensuring that these AI models are ideologically neutral and truth-seeking.’

OpenAI had warned American legislators that the Chinese startup DeepSeek was targeting the creator of ChatGPT as well as the country’s top AI leaders to replicate their models and use them for its own training, Reuters reported in February.

This memo and the accompanying cable, released just weeks before President Donald Trump’s planned visit to Beijing to meet Xi Jinping, promise to exacerbate tensions in a long-standing technological warfare between the two rival superpowers, which had eased due to negotiated detente last October.