The U.S. State Department issues a global warning on AI thefts attributed to China, including DeepSeek

The U.S. State Department has initiated a global diplomatic offensive to denounce what it characterizes as widespread maneuvers by Chinese companies, including the startup DeepSeek, to steal the intellectual property of American artificial intelligence labs, according to a diplomatic cable seen by Reuters.

The note specifies that its goal is to “warn of the risks associated with the use of AI models derived from distilling proprietary American 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, with the aim of reducing the development costs of a new powerful tool.

DeepSeek, the Chinese upstart 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 has reacted immediately.

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

The document, dated Friday and sent to diplomatic and consular posts worldwide, instructs diplomatic staff to discuss 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 for discussion 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 regarding 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 replicate the full capabilities of the original system,’ the note states, adding that these campaigns ‘deliberately remove the security protocols of resulting models and undermine mechanisms ensuring that these AI models are ideologically neutral and truthful-seeking.’

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

This memorandum 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 due to negotiated détente last October.