US Threatens Sanctions Over Alleged Chinese AI Technology Theft

The FBI, NSA and CISA said Chinese companies are using “distillation” to extract capabilities from more advanced U.S. models.

, and TIPP Staff

September 9, 2026 . 8:45 AM

2 min read

The U.S. federal agencies have accused Chinese artificial intelligence companies of conducting large-scale efforts to obtain proprietary technology from American AI firms, according to CNN.

The FBI, NSA and CISA said Chinese companies are using “distillation” to extract capabilities from more advanced U.S. models.

💡

The agencies said some firms allegedly use intermediaries called “transfer stations” to bypass geographic restrictions, security measures and terms of service. DeepSeek and Alibaba were among the companies identified as conducting high-volume campaigns.

Treasury Secretary Scott Bessent warned that companies involved in covert intellectual property theft could face sanctions or Entity List designations. China rejected the allegations, calling them an attempt to hinder its technological development.

Anthropic separately alleged that three Chinese AI labs used thousands of fraudulent accounts to conduct millions of exchanges with its Claude model. The report also cited Google, which warned that hackers are increasingly targeting AI models, source code and computing resources for espionage, extortion and theft.

Related Tweet:

US security agencies have accused China’s top AI companies including DeepSeek and Kimi maker Moonshot AI of systematically extracting proprietary knowledge from American firms and warned Silicon Valley developers to protect their work https://t.co/ZhX6jxAwU4
— Bloomberg (@business) September 9, 2026