Beijing says US firms train AI models on Chinese examples

"It is understood that many American artificial intelligence enterprises have distilled Chinese models during their research, development and training processes," says the Chinese commerce ministry.

People visit the Moonshot AI stand, featuring the Kimi K3 model, during the World Artificial Intelligence Conference (WAIC) in Shanghai on Jul 18, 2026. (File photo: AFP/Hector Retamal)

BEIJING: Beijing accused US artificial intelligence companies on Monday (Jul 27) of using Chinese examples to train their models, days after Washington threatened sanctions on Chinese firms for allegedly stealing American technology.

"It is understood that many American artificial intelligence enterprises have distilled Chinese models during their research, development and training processes," the Chinese commerce ministry said in a statement.

Distillation is a process in which an AI model is trained to mimic the output of a larger, more capable one.

The method is widely used across the industry, but US officials say Chinese firms have deployed it at scale to illicitly copy proprietary American systems.

The Chinese ministry said the US accusations "lack factual basis and legal grounds, adopt double standards in practice, and constitute typical acts of artificial intelligence hegemonism".

"China will take all necessary measures to firmly safeguard its legitimate and lawful rights and interests," it added.

Last week, a senior White House official accused Chinese startup Moonshot AI of covertly copying Anthropic's most advanced model to build its Kimi K3.

The latest Moonshot model stunned the US tech industry upon its release, setting off a fresh discussion over the AI rivalry with China.

Treasury Secretary Scott Bessent last week threatened sanctions against China, amid reports the US is also weighing a ban or curbs on foreign-made open-source models that are often built through distillation.

Stay updated with notifications for breaking news and our best stories

Join our channel for the top reads for the day on your preferred chat app