The US State Department has ordered a worldwide diplomatic offensive to denounce what it describes as generalized maneuvers by Chinese companies, including the startup DeepSeek, to steal the intellectual property of American artificial intelligence laboratories, according to a diplomatic cable seen by Reuters.
The note specifies that its goal is to ‘warn of the risks associated with using AI models derived from distilling American proprietary models, and to lay the groundwork for possible awareness-raising actions by the United States government.’
Distillation is a process of training lighter AI models using the results of larger and more expensive models, in order to reduce the development costs of a new high-performance 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 comment.
The cable also mentions the Chinese companies Moonshot AI and MiniMax. Neither has 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 protecting intellectual property rights.’
The document, dated Friday and sent to diplomatic and consular posts around the world, instructs diplomatic staff to address with their foreign counterparts ‘concerns about the extraction and distillation of American AI models by adversaries.’
‘A separate demarche and message have been sent to Beijing to be raised with China,’ the document states.
This cable, whose existence had not been revealed until now, indicates that the Trump administration is taking seriously the growing concerns about Chinese distillation of American AI models.
‘Models of AI developed from clandestine and unauthorized distillation campaigns allow foreign actors to market products that appear comparable on some benchmark tests for a fraction of the cost, but do not reproduce the entirety of the capabilities of the original system,’ the note states, adding that these campaigns ‘deliberately remove security protocols from 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 leading AI experts 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 war between the two rival superpowers, which had eased thanks to negotiated détente in October last year.
