China-Based Artificial Intelligence Companies Conducting Industrial-Scale Distillation Campaigns Against U.S. AI Companies
Summary
China-based AI companies like DeepSeek, Alibaba, and Moonshot AI are systematically stealing capabilities from U.S. AI models through knowledge distillation (a technique where one AI learns by studying another AI's outputs), extracting billions of data tokens since late 2024 by routing requests through APIs (application programming interfaces, which are interfaces that let software communicate), cloud providers, and proxy services to hide their identity. These companies use tactics like chain-of-thought reasoning extraction (pulling out the AI's step-by-step thinking process) and automated failover switching to bypass security measures, allowing them to train their own models faster and cheaper while threatening U.S. technological leadership.
Solution / Mitigation
The NSA, CISA, and FBI recommend U.S. AI companies take three immediate actions: (1) Implement comprehensive detection and mitigation by detecting anomalous and malicious prompts, accounts, networks, and behaviors, and monitor subscription-to-usage ratios, immediate maximum usage from new accounts, and enterprise-scale throughput patterns. (2) Deploy targeted response changes by subtly altering responses for suspected malicious distillation attempts to reduce the benefit to attacking companies. (3) Enable coordinated information-sharing across the U.S. Government, private industry, and allied nations.
Classification
Affected Vendors
Related Issues
Original source: https://www.cisa.gov/news-events/cybersecurity-advisories/aa26-251a
First tracked: September 8, 2026 at 08:01 PM
Classified by LLM (prompt v3) · confidence: 95%