China warns of countermeasures over US AI distillation claims

The dispute marks a widening of US technology controls beyond advanced semiconductors into AI models themselves. Washington's security authorities issued a statement on the 8th accusing six Chinese companies, including Moonshot AI and DeepSeek, of improperly using US-made models to try to steal technology. Beijing's Commerce Ministry pushed back, arguing that distillation — a method of efficiently training a new AI using a high-performance model's output — is a common technique used around the world, and that the criticism has no factual or legal basis.

The timing matters. The exchange comes ahead of a US-China leaders' summit expected on the 24th, making it a fresh source of friction in an already tense technology relationship. Beijing also noted that the two governments have already agreed to hold intergovernmental talks on AI, and said it is ready for constructive and professional discussions — a signal it wants Washington to reciprocate.

Beijing's threat of firm countermeasures if Chinese companies are excluded suggests the issue could become a test of how far each side is willing to go. Whether the two governments can keep the model-level dispute separate from the broader semiconductor controls, and whether the planned AI talks actually take place, will be the key markers to watch.