US Flags Chinese AI Distillation Threat

US State Department orders global diplomatic push warning Chinese AI firms of industrial‑scale IP theft via model “distillation”.
Cable cites startups DeepSeek, Moonshot AI and MiniMax allegedly using illicit distillation to replicate U.S. models at lower cost.
Directive urges diplomats to raise concerns and send a formal demarche to Beijing ahead of Trump‑Xi summit in weeks.
Chinese authorities dismiss claims as baseless, while U.S. labs like Anthropic and OpenAI warn of security “war premium”.