The Trump administration plans to crack down on Chinese firms exploiting U.S. AI models, as outlined by chief science adviser Michael Kratsios. This move comes amid growing competition in the AI sector between the U.S. and China.
Key points
Trump administration vows to crack down on foreign tech companies
China is singled out for exploiting U.S. AI models
Michael Kratsios leads the initiative
Concerns over China's advancements in AI
Accusations of industrial-scale exploitation
Mentioned in this story
Trump administrationChinaMichael Kratsios
FILE - White House director of Science and Technology Policy Michael Kratsios speaks during a meeting of the White House Task Force on Artificial Intelligence Education in the East Room of the White House, Sept. 4, 2025, in Washington.
FILE - White House director of Science and Technology Policy Michael Kratsios speaks during a meeting of the White House Task Force on Artificial Intelligence Education in the East Room of the White House, Sept. 4, 2025, in Washington.
Alex Brandon/AP
Alex Brandon/AP
WASHINGTON — The Trump administration is vowing to crack down on foreign tech companies' exploitation of U.S. artificial intelligence models, singling out China at a time that country is narrowing the gap with the U.S. in the AI race.
In a Thursday memo, Michael Kratsios, the president's chief science and technology adviser, accused foreign entities "principally based in China" of engaging in deliberate, industrial-scale campaigns to "distill," or extract capabilities from, leading AI systems made in the U.S. and "exploiting American expertise and innovation."
The administration, Kratsios wrote, will work with American AI companies to identify such activities, build defenses and find ways to punish offenders.
The memo arrives at a time when China is challenging U.S. dominance in artificial intelligence, an area where the White House says the U.S. must prevail to set global standards and reap economic and military benefits. But the U.S.-China gap in performance of top AI models has "effectively closed," according to a recent report from Stanford University's Institute for Human-Centered AI.
China's embassy in Washington said it opposed "the unjustified suppression of Chinese companies by the U.S."
Q&A
What actions is the Trump administration taking against Chinese tech companies?
The Trump administration is implementing a crackdown on Chinese firms that are accused of exploiting U.S. artificial intelligence models.
Who is Michael Kratsios and what role does he play in this crackdown?
Michael Kratsios is the chief science and technology adviser to the president, and he is leading the efforts to address foreign exploitation of U.S. AI technology.
Why is the U.S. concerned about China's AI advancements?
The U.S. is concerned that China is narrowing the gap in artificial intelligence capabilities, prompting the need for protective measures against exploitation.
What specific practices are Chinese firms accused of in relation to U.S. AI models?
Chinese firms are accused of engaging in industrial-scale campaigns to distill or extract capabilities from leading U.S. AI systems.
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"China has always been committed to promoting scientific and technological progress through cooperation and healthy competition. China attaches great importance to the protection of intellectual property rights," said Liu Pengyu, the embassy spokesperson.
Kratsios' memo also came the same week that the House Foreign Affairs Committee offered unanimous, bipartisan support for a bill to set up a process to identify foreign actors that extract "key technical features" of closed-source, U.S.-owned AI models and to punish them with measures including sanctions.
"Model extraction attacks are the latest frontier of Chinese economic coercion and theft of U.S. intellectual property," said Rep. Bill Huizenga, R-Mich., who sponsored the bill. "American AI models are demonstrating transformative cyber capabilities, and it is critical we prevent China from stealing these technological advancements."
Last year, the Chinese start-up DeepSeek rattled U.S. markets when it released a large language model that could compete with U.S. AI giants but at a fraction of the cost.
David Sacks, then serving as President Donald Trump's AI and crypto adviser, suggested that DeepSeek copied U.S. models. "There's substantial evidence that what DeepSeek did here is they distilled the knowledge out of OpenAI's models," Sacks said then.
In a February letter to U.S. lawmakers, OpenAI, the developer of ChatGPT, made similar allegations and said China should not be allowed to advance "autocratic AI" by "appropriating and repackaging American innovation."
Anthropic, the maker of the Claude chatbot, in February accused DeepSeek and two other China-based AI laboratories of engaging in campaigns to "illicitly extract Claude's capabilities to improve their own models" using the distillation technique that "involves training a less capable model on the outputs of a stronger one."
Anthropic said distillation can be a legitimate way to train AI systems but it's a problem when competitors "use it to acquire powerful capabilities from other labs in a fraction of the time, and at a fraction of the cost, that it would take to develop them independently."
But it can go both ways. San Francisco-based startup Anysphere, maker of the popular coding tool Cursor, recently acknowledged that its latest product was based on an open-source model made by Chinese company Moonshot AI, maker of the chatbot Kimi.
Kyle Chan, a fellow at the Washington-based think tank The Brookings Institution and an expert on China's technology development, said it will be like "looking for needles in an enormous haystack" to separate unauthorized distillation from the vast volume of legitimate requests for data. But information sharing and coordination among U.S. AI labs could help, and the federal government can play an important role in facilitating anti-distillation efforts across labs, Chan said.
It's hard to assess how far the House bill can go, but Chan said Trump may not want to rock the boat with Chinese President Xi Jinping ahead of a planned mid-May state visit to Beijing.
