The US has accused Chinese companies of copying American models through "distillation," a charge Beijing has responded to, calling these accusations false.

China threatens US with retaliation.

China has directly threatened the US that it will retaliate if its AI companies are banned in the US. The US has accused Chinese companies of copying American models through "distillation." Beijing has responded, calling these allegations false.

According to a Reuters report, the dispute began when the US alleged that Chinese companies used American models to quickly develop their AI. Senior US officials have said that Chinese AI companies accused of stealing American technology could face investigations, sanctions, and trade restrictions.

China threatens US with retaliation.

China's Commerce Ministry hit back at the US on Monday (July 27), accusing the US of "AI dominance" and threatening retaliatory action. China said that "distillation" is a common practice used in industries around the world. It called for cooperation in the field of AI instead of sanctions.

What is 'distillation' technology?

Model distillation is a technique used in AI training. In this, developers use the output of a larger model to teach or improve a smaller system. The US alleges that China is using this method to create its AI models at a much lower cost. The US has accused China of stealing not only money but also security.

The US says that the stealth model removes security protocols and even eliminates the mechanism for AI neutrality, which could be dangerous for the future. A Chinese spokesperson said in a statement, "China will take all necessary measures to firmly defend its legitimate rights and interests against any actions that seriously harm Chinese interests."