China said the U.S. was threatening Chinese companies with punishment based on allegations they used "distillation" to copy advanced U.S. AI models, despite what it called a lack of factual or legal grounds. | REUTERS
Jul 28, 2026
BEIJING – China’s commerce ministry on Monday accused the United States of “AI hegemonism” and threatened countermeasures after senior U.S. officials said Chinese AI companies could face investigations, sanctions and trade restrictions over the alleged theft of U.S. technology.
The ministry said Washington was threatening Chinese companies with punishment based on allegations they used “distillation” to copy advanced U.S. AI models, despite what it called a lack of factual or legal grounds.
Model distillation is a widely used AI training technique in which developers use the outputs of a more capable model to train or improve another system. U.S. officials say they distinguish between legitimate distillation and large-scale extraction that amounts to intellectual property theft.
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