American tech companies are experiencing anxiety as Chinese competitors rapidly close the gap in the AI race. Over a year ago, DeepSeek triggered an existential crisis and a mass stock selloff in the US tech industry by releasing a competitive AI model created for a fraction of the cost of leading American models. Last month, the release of GLM-5.2 from Chinese start-up Z.ai has been hailed as nearly or just as powerful as frontier US systems, especially in coding and cybersecurity, while being significantly cheaper to use. Venture capitalist Marc Andreessen tweeted that "AI insiders are saying GLM-5.2 is the first Chinese AI model to match and often beat the American big lab public AI models with no compromises." In response, US companies are crying foul; earlier this year, Anthropic accused China's DeepSeek, Moonshot, and MiniMax of using distillation to illegally gather data to imitate its models, claiming a mass coordinated effort involving tens of thousands of accounts. Last month, Anthropic sent a letter to US senators accusing Chinese titan Alibaba of also engaging in this practice, stating that "these distillation attacks are carried out illicitly, systematically and at industrial scale." However, distillation is an open secret among rivals, and it is not even clear if it is illegal.