US flags industrial-scale AI theft by China as tech race heats up

The White House accuses China of conducting industrial-scale distillation of US frontier AI systems, with Michael Kratsios saying foreign actors are siphoning American AI tech from labs. The memo outlines steps to inform and protect US AI firms, including potential measures to hold perpetrators accountable—such as tighter export controls and adding groups to the entity list—while China denies the allegations. The dispute comes amid an AI arms race and ahead of a Biden-Xi meeting, with previous accusations against Chinese firms like DeepSeek fueling the debate about national security and IP protections.