US Agencies Allege Chinese Firms Conducted Mass AI Model Distillation

CISA, the NSA, and the FBI allege that China-based AI companies—including DeepSeek, Moonshot AI, Alibaba, MiniMax, StepFun, and Z.AI—ran industrial-scale campaigns to extract capabilities from U.S. frontier models. The activity reportedly generated billions of tokens and millions of requests to Claude, GPT, Gemini, and Grok through coordinated API routing, cloud providers, aggregators, relays, proxy networks, and rotating vendor accounts. Anthropic said it identified seven campaigns targeting Claude since February 2026; the largest, allegedly linked to Alibaba, made more than 151 million requests between May and July.

According to the agencies and Anthropic, operators used fraudulent accounts, stolen API keys, payment and quota optimization, automated failover, and—in some cases—covert forwarding of user prompts to sustain collection and train competing models from the outputs. The activity may have exposed user-provided source code, corporate documents, personal data, and credentials. Anthropic said it blocked implicated accounts and proxy infrastructure and reduced the reasoning detail exposed by its models, while U.S. agencies recommended cross-provider sharing of high-confidence behavioral and infrastructure indicators and covert response degradation for suspected distillation operations.