US formally accuses China of stealing AI technology at scale; Trump administration weighs major sanctions ahead of summit

The US government has charged China with systematic, 'industrial-scale' theft of American AI research and code—specifically targeting semiconductor designs and training methods used by companies like OpenAI and Google. China's government rejected the accusation as 'slander.' This marks an official escalation in what has been a quiet cat-and-mouse competition between the two countries.

The accusation centers on how China obtains proprietary AI models and techniques: by stealing source code (the underlying instructions that make AI systems work) rather than licensing it from US companies. This allows Chinese AI labs to skip months of research and development, shortening their path to building competing systems.

If the Trump administration follows through on threatened sanctions, American tech companies that sell to China—including chip makers like NVIDIA and software firms—face new export restrictions or tariffs. This could reshape the AI supply chain, potentially forcing Chinese companies to develop their own chip and software alternatives faster, or pushing US firms to choose between the Chinese and American markets.