The Trump administration has accused Chinese technology companies of conducting coordinated, large-scale campaigns to steal American artificial intelligence technology, raising fresh tensions between Washington and Beijing ahead of a planned presidential summit next month.

In an internal memo shared on social media on Thursday and first reported by the Financial Times, Michael Kratsios, Director of the White House Office of Science and Technology Policy, wrote that the US government has information indicating that "foreign entities, principally based in China, are engaged in deliberate, industrial-scale campaigns" to copy leading American AI systems. The technique at the centre of the allegations is known as "distillation" — a process by which smaller AI models are trained using the outputs of larger, more advanced ones, effectively allowing companies to replicate costly AI capabilities at a fraction of the original development expense. According to the memo, these campaigns rely on tens of thousands of proxy accounts to evade detection, and employ so-called "jailbreaking" techniques to extract proprietary information that AI systems are not designed to disclose.

The White House outlined four steps it intends to take in response: sharing intelligence with US AI companies about the tactics and actors involved; improving coordination with industry to counter the attacks; developing best practices to identify and address such exploitation; and exploring ways to hold foreign actors accountable. The memo stopped short of naming specific companies or announcing concrete punitive measures against foreign entities.

Leading American AI firms have already raised the alarm independently. Anthropic, an AI safety company, earlier this year identified distillation attacks linked to three Chinese AI laboratories — DeepSeek, Moonshot, and MiniMax — and accused them of systematically copying its models. OpenAI has similarly accused DeepSeek of appropriating its technology. DeepSeek gained global attention late last year when it claimed to have built a powerful AI model for just a few million dollars, a stark contrast to the hundreds of billions being invested by American rivals.

China's embassy in Washington rejected the accusations, calling them "baseless allegations" and asserting that Beijing "attaches great importance to the protection of intellectual property rights." A spokesperson added that "China's development is the result of its own dedication and effort as well as international cooperation that delivers mutual benefits." The memo's release comes at a diplomatically sensitive moment: President Trump is expected to visit Chinese President Xi Jinping in Beijing in May, and the allegations risk undermining a fragile tech-sector détente reached last October. The dispute also adds uncertainty to pending decisions over whether Nvidia's advanced AI chips will be permitted for export to China — sales that were conditionally approved in January but have yet to be completed.