The State Department has issued a worldwide diplomatic alert accusing Chinese artificial intelligence companies of stealing intellectual property from American AI laboratories, according to a confidential cable obtained by Reuters.
The diplomatic message specifically names Chinese AI startup DeepSeek, along with companies Moonshot AI and MiniMax, as part of what officials describe as systematic theft efforts targeting U.S. technology.
According to the cable, the communication aims to “warn of the risks of utilizing AI models distilled from U.S. proprietary AI models, and lay the groundwork for potential follow-up and outreach by the U.S. government.”
The document explains that distillation involves training smaller AI systems using data from larger, more costly models to reduce development expenses for new AI technology.
DeepSeek gained international attention last year when it released a low-cost AI model that surprised the tech world. On Friday, the company unveiled a preview of its newest model designed to work with Huawei chip technology, demonstrating China’s increasing independence in the AI sector.
Neither the State Department, DeepSeek, nor the Chinese Embassy in Washington provided immediate responses to requests for comment. Moonshot AI and MiniMax also did not respond to inquiries.
Earlier this week, the White House made similar accusations against Chinese companies. The Chinese Embassy dismissed these claims as “baseless allegations,” stating that Beijing “attaches great importance to the protection of intellectual property rights.”
The Friday cable, distributed to U.S. diplomatic and consular offices worldwide, directs diplomatic personnel to discuss with foreign officials their “concerns over adversaries’ extraction and distillation of U.S. A.I. models.”
“A separate demarche request and message has been sent to Beijing for raising with China,” the document notes.
This previously unreported cable demonstrates the Trump administration’s serious approach to growing concerns about Chinese copying of American AI technology.
The communication argues that “AI models developed from surreptitious, unauthorized distillation campaigns enable foreign actors to release products that appear to perform comparably on select benchmarks at a fraction of the cost but do not replicate the full performance of the original system.” It further claims these campaigns “deliberately strip security protocols from the resulting models and undo mechanisms that ensure those AI models are ideologically neutral and truth‑seeking.”
In February, OpenAI informed U.S. lawmakers that DeepSeek was targeting the ChatGPT creator and other leading American AI companies to copy their models for its own development purposes, Reuters previously reported.
This diplomatic action, coming just weeks before President Donald Trump’s scheduled visit with Chinese President Xi Jinping in Beijing, threatens to escalate tensions in the ongoing technology competition between the two superpowers, which had been reduced through a diplomatic agreement reached last October.
