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    Trump administration. Warns that Chinese entities are destroying American AI technology

    Smart WealthhabitsBy Smart WealthhabitsApril 23, 2026No Comments2 Mins Read
    Trump administration. Warns that Chinese entities are destroying American AI technology

    The Trump administration on Thursday accused Chinese entities of waging an “industrial-scale campaign” to break into US artificial intelligence systems, and said it would seek ways to hold foreign actors accountable.

    “There is nothing innovative about systematically extracting and copying the innovations of American industry,” Michael Kratsios, President Donald Trump’s top science and technology adviser, said in an interview. memorandum On alleged Chinese “distillation” operations to train smaller AI models instead of larger AI models.

    The US government has already accused China of targeting American AI technology and intellectual property.

    Kratsios warned that as large-scale “distillation” operations become easier to detect and stop, entities that “build their AI capabilities on such a fragile foundation” should lose confidence in “the integrity and reliability of the models they produce.”

    U.S. information indicates that campaigns to “distill” U.S. frontier AI systems are coming mostly from China-based entities, he said.

    These efforts include using thousands of proxy accounts and jailbreaking techniques to secretly “expose proprietary information,” Kratsios said.

    The adviser said efforts to copy American models through “clandestine, unauthorized distillation campaigns” would result in AI systems not coming with the same performance as the originals.

    But they “enable foreign actors to release products that appear to have comparable performance on select benchmarks at a fraction of the cost,” he said.

    Read more CNBC politics coverage

    According to Kratsios, they enable distillers to “deliberately remove security protocols from resulting models and undo the mechanisms that ensure those AI models are ideologically neutral and truth-seeking.”

    The Chinese Embassy in Washington did not immediately respond to a request for comment on the memo.

    Distillation is not inherently in conflict with the competing AI ecosystem, and it can play an “important” role when “legitimately used to produce smaller, lighter-weight models from more advanced systems,” Kratsios said.

    “Industrial diversion activities aimed at systematically undermining American research and development and access to proprietary information are unacceptable,” he said.

    The Trump administration will respond by sharing information about adversarial campaigns with US AI companies, including “the tactics adopted and the actors involved.”

    “It will also explore a number of measures to hold foreign actors accountable,” Kratsios said.

    — cnbc megan casella Contributed to this report.

    Choose CNBC as your favorite source on Google and never miss a moment of the most trusted name in business news.

    administration American Chinese destroying entities technology Trump warns
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