US agencies recast AI distillation as an industrial espionage campaign
The US government is no longer describing model distillation as ordinary competitive learning. A joint NSA, FBI, and CISA advisory says China-based firms ran distributed, detection-evading campaigns to extract proprietary capabilities from US frontier models, and names DeepSeek, Moonshot AI, Alibaba, MiniMax, StepFun, and Z.AI. That turns model access, query monitoring, and export controls into national-security infrastructure, with sanctions now a live possibility.