Back in June, OpenAI said it disrupted a likely China-linked online influence operation that used ChatGPT to manufacture posts posing as grassroots American opposition to AI data centers, exploiting concerns over electricity prices, water use, and the Trump administration’s technology policies to undermine our nation’s artificial intelligence infrastructure.
This finding aligns with my concerns about New York’s governor imposing a moratorium on data center construction in the state. After all, China had supported a “law” organization specifically to support legal cases that used environmental rules to halt American business and security interests.
Meanwhile, China continues to support its own AI resources and undermine our interests.
The U.S. government on Tuesday accused Chinese artificial intelligence companies of maliciously copying technology from American AI firms, potentially complicating relations ahead of a planned meeting between leaders of the world’s two biggest economies later this month.
The Chinese companies copied U.S. AI labs’ intellectual property through a technique known as distillation, according to a statement from U.S. law enforcement and intelligence officials. Distillation is the process of training smaller AI models using output from larger, more expensive ones as part of an effort to lower the costs of training a new AI tool.
U.S. officials accused six Chinese companies, including DeepSeek, Moonshot AI and Alibaba of tapping variants of American-made AI models to train their AI products more quickly. The companies did so “likely with Chinese government awareness,” according to the statement from U.S. officials, who added that the Chinese companies targeted AI models from Anthropic, OpenAI, Alphabet’s Google, and SpaceX.
“China-based AI companies are engaging in aggressive, malicious and targeted distillation activities at an industrial scale,” the officials said.
U.S. officials made the allegations as the administration of President Donald Trump prepares for Chinese President Xi Jinping’s visit to the U.S. in late September. The U.S. and China are also gearing up to discuss AI safety risks during a dialogue planned for mid-September, Reuters previously reported.
Back in 2021, I noted China’s disturbing history of stealing technology. The fact that they are distilling our activities “at an industrial scale” is just another business day for them.
Of course, the Chinese, being Chinese, deny everything.
A spokesperson for the Chinese Ministry of Foreign Affairs said Wednesday that she hadn’t seen the specific report but that China’s AI development “is a result of high-level scientific and technological self-reliance.”
“We always believe that all parties should strengthen cooperation to foster open, inclusive, beneficial and ethical development of AI for the well-being of all humanity,” the spokesperson, Mao Ning, said at a regular briefing in Beijing.
She added that the U.S. should be strengthening AI cooperation with China, “rather than making groundless accusations.”
Yeah, sure.
Interestingly, just this week, Google reported that hackers working for Chinese intelligence are increasingly targeting American AI research and using AI in their operations.
In its latest quarterly report, Google’s Threat Intelligence Group said that several hacker groups, including both intelligence agencies and cybercrime gangs, have moved from basic AI prompting to using AI agents that automate wide swaths of their intrusion.
The switch means hackers spend drastically less time actively hacking, and in some cases can conduct an entire campaign in less than six hours, the report says.
Google said that one Chinese group in particular, which it has tracked since 2023, has relentlessly focused on academic, medical and military research organizations in North America and has specifically gone after proprietary AI research. Google did not name any of the victims.
China’s three-pronged attack strategy is clear. Beijing is simultaneously trying to stop the construction of infrastructure needed to power AI, steal the American-developed intellectual property behind it, and deploy AI-enabled cyberspies to target our innovative AI research for even more theft opportunities.
America cannot afford to let environmental-lawfare campaigns, spy-generated social media influencing, and intellectual-property theft hand the Chinese Communist Party a strategic advantage in a technology that will shape economic power, military readiness, and national security for decades.
The appropriate response is not naïve “cooperation,” but a serious commitment to securing U.S. research, expanding reliable energy and data-center capacity, and treating China’s AI ambitions as the highly complex national-security challenge they plainly are.
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