On 1st September 1789, Samuel Slater sailed from England to New York after memorizing Richard Arkwright’s factory system, later becoming a partner in a Rhode Island cotton mill. Today, the question is to what extent Chinese AI labs are distilling outputs of American AI models. Distillation is a decades-old machine learning technique where a larger model trains a smaller one; distilling from outside without permission is the accusation against Kimi and other Chinese labs. Diogo Almeida, a four-year OpenAI veteran, explains effective distillation is harder now than when models provided reasoning traces, though learning from final answers, or "behavior parroting," might still bootstrap another model. Stanford’s Alpaca project admitted training on frontier system outputs. Anthropic alleged DeepSeek, Moonshot and MiniMax used more than 16 million Claude chats via 24,000 fake accounts. Michael Kratsios, Trump’s science chief, says he has evidence of Moonshot running distillation attacks. Anastasios Angelopoulos, CEO of Arena, argues Kimi K3 exceeds top US model performance, something distillation alone doesn’t allow, and predicts American labs will start distilling Chinese intelligence.