The Trump administration announced it may investigate whether China's AI models were based on American AI models and could impose sanctions.
US Treasury Secretary Scott Bescent announced that the US will investigate open-source AI models developed in China to determine if they infringe on the intellectual property rights of American companies. If infringement is confirmed, sanctions may be imposed on the AI companies involved.
Bessent Says US to Scrutinize Chinese AI Models for IP Theft - Bloomberg
US threats sanctions against Chinese AI models over IP theft | TechCrunch
https://techcrunch.com/2026/07/21/us-threatens-sanctions-against-chinese-ai-models-over-ip-theft/
Bessent says US could sanction China over AI model 'theft'
https://www.cnbc.com/2026/07/21/bessent-china-ai-sanctions.html
Treasury Secretary Bescent pointed out the possibility that Chinese companies are using a technique called 'distillation,' which involves using other AIs to enhance the capabilities of their AI models, given that many Chinese AI models are being developed that rival those of the United States. 'The current administration supports open-source models, but it does not support the infringement of intellectual property rights. In particular, if it is found that foreign models are stealing technology from major American companies, we have the authority to take sanctions against such infringements,' he said, suggesting that appropriate action will be taken if evidence of distillation is found.
Treasury Secretary Bessent warned, 'We have found traces of American-made AI models in many Chinese-made models. This is unacceptable,' specifically naming China.
Due to US regulations, China is unable to use high-performance NVIDIA chips like those used by OpenAI and Anthropic. Meanwhile, it has been reported that China is also planning to restrict foreign access to high-performance AI and semiconductor technology.
The issue of distillation has been a hot topic since the release of 'DeepSeek-R1,' and OpenAI and Anthropic have condemned unauthorized distillation by Chinese companies.
Anthropic accuses Alibaba of 'distillation attack,' alleging over 28.8 million accesses to Claude - GIGAZINE
According to Reuters, a US delegation led by Treasury Secretary Bescent will soon hold talks with Chinese officials regarding AI.
EXCLUSIVE: US, China to hold AI talks in September, sources say | Reuters
https://www.reuters.com/world/china/us-china-hold-ai-talks-september-sources-say-2026-07-21/
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