China’s commerce ministry on Monday accused the United States of “AI hegemonism” and threatened countermeasures after senior US officials said Chinese AI companies could face investigations, sanctions and trade restrictions over the alleged theft of US technology.
The ministry said Washington was threatening Chinese companies with punishment based on allegations they used “distillation” to copy advanced US AI models, despite what it called a lack of factual or legal grounds.
Model distillation is a widely used AI training technique in which developers use the outputs of a more capable model to train or improve another system. US officials say they distinguish between legitimate distillation and large-scale extraction that amounts to intellectual property theft.
“For any action that causes substantive harm to Chinese interests, China will take all necessary measures to firmly safeguard its legitimate rights and interests,” a ministry spokesperson said in a statement.
The comments mark an escalation in a dispute centred on Beijing-based Moonshot AI, whose recently released Kimi K3 model has drawn attention for its coding capabilities and intensified debate in Washington over whether Chinese developers are copying US models or rapidly closing the technological gap through their own research. The controversy echoes the reaction in the US to the rise of Chinese startup DeepSeek last year.
