The White House has directly accused Chinese entities of conducting an industrial-scale campaign to steal American artificial intelligence technology, a charge that threatens to overshadow next month’s summit between President Joe Biden and President Xi Jinping. In an internal memorandum released on Thursday, Michael Kratsios, director of the White House Office of Science and Technology Policy, claimed that foreign actors, predominantly based in China, are systematically extracting capabilities from frontier US AI systems. The technique at the heart of the allegations is known as distillation: a process by which a smaller model is trained on the outputs of a larger, more advanced model to replicate its abilities. Viewed from Washington, the scale of the operation is unprecedented, with the memo describing the use of tens of thousands of proxy accounts and sophisticated jailbreaking methods to evade detection and expose proprietary information.

This is not the first time such concerns have been raised. In February, OpenAI submitted a memorandum to the US Congress accusing the Chinese startup DeepSeek of clandestinely copying its models. What distinguishes the latest White House move is its direct linkage of the practice to state-backed actors and its timing—just weeks before a high-stakes diplomatic meeting. From Beijing, the Chinese embassy in Washington has pushed back, insisting that the country’s AI advancements are the result of its own dedication, effort, and international cooperation. Distillation itself is legal when conducted with permission, but the US government argues that these campaigns operate without consent, amounting to intellectual property theft on a commercial scale.

Analysts in London note that the accusations reflect a deepening US-China tech war, where AI has become the most sensitive frontier. The memo signals a shift from mere warnings to active collaboration with American AI firms to counter the threat, potentially through export controls, sanctions, or tighter vetting of foreign accounts. For the upcoming summit, the charges add a layer of tension to discussions already burdened by disputes over trade, semiconductors, and territorial claims. Moscow-based observers point out that similar allegations of cyber-enabled theft have been levied by Washington against Chinese entities for years, but the focus on distillation marks a new phase in how intellectual property is contested in the AI era.

Forward-looking, the most immediate consequence is likely to be a stricter regulatory environment for cross-border data flows and model access. US AI companies may face pressure to monitor usage more aggressively, while Chinese firms could find themselves blacklisted or cut off from critical software tools. Whether the summit can produce any de-escalation remains uncertain; what is clear is that the battle over AI superiority is now being fought not only in research labs but through the very methods of learning and replication that define the technology.