United States and China are expected to hold talks on AI in September.
U.S. Treasury Secretary Scott Bessent said that the Trump administration will investigate whether Chinese artificial intelligence (AI) models have been developed by distilling technology from American AI models, stressing that the U.S. does not support intellectual property (IP) theft.
Chinese open-weight AI models are becoming increasingly competitive with leading models from U.S. companies such as OpenAI and Anthropic, raising concerns among technology leaders and government officials about whether the United States can maintain its lead in the AI industry. Earlier this month, Chinese startup Moonshot AI introduced a new model called Kimi K3, which outperformed models from OpenAI and Anthropic on several industry benchmarks.
Speaking on Fox Business’ Mornings with Maria, Bessent said the U.S. has the authority to impose sanctions if foreign AI models are found to have stolen technology from American companies.
He explained that the technical term for this type of activity is “distillation,” an AI training method in which a smaller model is created using the outputs of a more advanced model. Last month, Anthropic told the U.S. Senate Committee on Banking, Housing and Urban Affairs that Chinese technology company Alibaba had carried out what it described as the largest known distillation attack against the company.
According to a Reuters report published Tuesday, the United States and China are expected to hold talks on artificial intelligence in September, with Bessent representing the U.S. during the discussions.
Bessent also said U.S. officials have found watermarks from American large language models in several Chinese AI models, calling the situation unacceptable and saying the administration will examine the issue further in the coming days and weeks.
However, both Anthropic and OpenAI have also faced allegations related to the unauthorized use of copyrighted material. In September, Anthropic agreed to pay $1.5 billion to settle a class-action lawsuit filed by a group of authors who claimed the company illegally downloaded books from pirated databases. In 2023, The New York Times sued OpenAI and Microsoft, alleging the companies violated copyright by using its content to train their AI models.
