US security agencies accuse Chinese tech giants Alibaba and DeepSeek of systematically copying American AI models on an industrial scale.
United States government security agencies have formally accused major Chinese technology companies, including e-commerce titan Alibaba and artificial intelligence developer DeepSeek, of systematically copying American artificial intelligence tools on a massive scale.
Federal intelligence officials revealed that Chinese software firms have used an advanced technical method known as knowledge distillation since 2024 to secretly extract smart reasoning skills, computer coding instructions, and specialized data from top American platforms like ChatGPT, Claude, and Gemini.
Instead of spending billions of dollars to build smart computer systems from scratch, Chinese developers allegedly used thousands of fake accounts and automated computer programs to ask American software millions of questions.
The Chinese firms then collected those answers to quickly train their own domestic artificial intelligence programs at a tiny fraction of the normal cost.
The joint national security advisory was officially published by the National Security Agency, the Cybersecurity and Infrastructure Security Agency, and the Federal Bureau of Investigation on Tuesday, September 8, 2026.
Federal investigators detailed how Chinese firms ran organized data collection campaigns across several major tech hubs.
By bypassing geographical internet bans and security rules, Chinese firms pulled billions of data units directly from leading American systems to power local Chinese platforms like DeepSeek’s R1 and Alibaba’s Qwen models.
The primary reason United States authorities are calling out Chinese tech firms now is to protect American business secrets and defend national technological leadership.
Developing cutting edge artificial intelligence requires massive investments in physical computer chips, electric power, and human talent.
When foreign competitors copy those completed capabilities through automated account networks, they bypass heavy development costs while undercutting American businesses in the global marketplace.
Furthermore, because artificial intelligence serves as the foundation for modern military equipment and commercial software, American security officials warned that unauthorized data extraction threatens international economic stability and national defense safety.
Warning that Chinese technology companies are conducting organized digital campaigns to absorb American innovation, United States intelligence agencies stated in their official joint security advisory that “China based artificial intelligence companies are conducting systematic extraction of proprietary functionalities and capabilities of U.S. AI companies’ models through industrial scale knowledge distillation campaigns that form the core, not merely a supplement, of their AI development strategy”.
Recommending that American software developers take immediate action to block unauthorized access, security officials added that “addressing industrial scale distillation merits a coordinated response across the AI ecosystem, including effective information sharing, spanning the U.S. Government, private industry, and allied nations”.
Detailing how Chinese developers used tricky computer networks to hide their identities while downloading valuable computer code, federal investigators reported that bad actors used “fraudulent accounts, bulk subscriptions and automated systems to evade detection” across public cloud services.
By exposing industrial scale software extraction, the United States government is pushing technology providers to tighten digital safeguards.
Forcing cloud platforms to block fake automated accounts ensures that groundbreaking artificial intelligence creations remain protected, secure, and fairly managed worldwide.
About the Author
Jennifer Sakmufuwo Baba is a tech analyst, senior staff, and writer covering artificial intelligence, cybersecurity , and emerging technologies at TechRegard. Based in Nigeria, she's passionate about translating complex tech developments into compelling, accessible stories for diverse audiences. Her work focuses on how technology shapes innovation across Africa and globally.
