The US State Department issued a global diplomatic warning in April 2026, instructing its posts worldwide to raise concerns about alleged intellectual property theft by Chinese AI companies, including DeepSeek, Moonshot AI, and MiniMax. The directive was contained in a cable sent to diplomatic and consular posts around the world, as seen by Reuters.
The cable instructs diplomatic staff to speak with foreign counterparts about “concerns over adversaries’ extraction and distillation of U.S. AI models.” A separate message was also sent to Beijing directly. Distillation refers to the process of training smaller AI models using output from larger, more expensive ones — a method that can significantly reduce the cost of developing powerful AI tools.
The State Department said its goal was 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 cable also alleged that such campaigns “deliberately strip security protocols from the resulting models and undo mechanisms that ensure those AI models are ideologically neutral and truth-seeking.”
OpenAI had previously warned US lawmakers in February 2026 that DeepSeek was targeting the company and other leading US AI firms to replicate their models for its own training. The White House made similar accusations this week, though the cable itself had not been previously reported.
The Chinese Embassy in Washington denied the claims, calling them “groundless” and characterizing them as “deliberate attacks on China’s development and progress in the AI industry.” DeepSeek has previously stated that its V3 model relied on web-crawled data and that it had not intentionally used synthetic data generated by OpenAI.
The development could raise tensions between the US and China just weeks before President Donald Trump is scheduled to visit President Xi Jinping in Beijing — a meeting that follows a tech-sector detente brokered in October of the prior year. Many Western and some Asian governments have already banned their institutions from using DeepSeek over data privacy concerns.
Source: Tech-Economic Times