Anthropic and OpenAI warn that China has been ripping off their cutting-edge AI to produce cheap, open-source chatbots, threatening the US’s razor-thin lead in artificial intelligence and national security. On June 24, San Francisco-based Anthropic sent a letter to Congress directly accusing Alibaba of “brazen” AI theft through “distillation,” a technique where an advanced AI model is used to train a less capable one without permission. OpenAI in February accused China-based DeepSeek of “ongoing efforts to free-ride” on its work. That same month, Google warned of surging “malicious activity” originating in China, Iran, North Korea and Russia. Six of the top 10 most-used AI models were developed by Chinese tech firms, including Z.AI, Minimax and DeepSeek. A source close to Anthropic said, “If today we say China is roughly 6-9 months behind us on frontier models, we think that if they were not able to distill or they were less effective, they’d probably be closer to something like 18-plus months behind.” Anthropic has regularly briefed Trump national security officials about distillation attacks, including as recently as this month. In April, the White House’s Office of Science and Technology published a memo accusing “foreign entities, principally based in China” of engaging in “deliberate, industrial-scale” theft campaigns.