Trump Administration Threatens Sanctions Over Alleged AI Technology Theft by China

The technology war between the United States and China is heating up, with the US reportedly planning to investigate allegations that Chinese artificial intelligence (AI) models have used technology from American companies. US Treasury Secretary Scott Bessent stated that the Trump administration will not tolerate the theft of intellectual property (IP). The rise of Chinese open-weight AI models, which are increasingly competing with leading products from US firms like OpenAI and Anthropic, has sparked concern among technology executives and government officials about the sustainability of America’s edge in the AI race. Bessent highlighted the practice of ‘distillation’, where a smaller, less capable model is built by leveraging the output of a more powerful one. He noted that some Chinese models were found to contain watermarks from American large language models. ‘If we see, particularly foreign models, stealing from our great American companies, we have the ability to put sanctions on them for this theft,’ Bessent said in an interview with Fox Business. The comments follow a letter from Anthropic to a US Senate committee, accusing Chinese tech company Alibaba of conducting the largest known distillation attack against its firm to date. The US and China are scheduled to hold talks on artificial intelligence in September, with Bessent set to represent the United States. However, both Anthropic and OpenAI have also faced intellectual property theft accusations in recent years. Anthropic agreed to pay $1.5 billion in September to settle a class-action lawsuit from a group of authors who claimed the company illegally downloaded books from pirated databases. Meanwhile, The New York Times sued OpenAI and Microsoft in 2023, alleging the companies infringed its copyright by using its intellectual property to train AI models.