FBI, NSA warn Chinese AI companies like DeepSeek and Alibaba are reportedly carrying out 'industrial-scale' distillation campaigns to boost their models
Attackers are teaching their models by asking GPT and Claude millions of questions
by https://www.techradar.com/author/sead-fadilpai · TechRadarNews By Sead Fadilpašić Published 9 September 2026
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- CISA, NSA, FBI warn Chinese AI firms of industrial‑scale knowledge distillation
- Companies like DeepSeek, Moonshot, Alibaba allegedly extracted billions of tokens from US frontier models
- Advisory urges detection of malicious prompts, deceptive responses to distillation, and cross‑provider intelligence sharing
Chinese AI companies’ core development strategy is to steal proprietary functionalities and capabilities from their US counterparts, law enforcement agencies have warned.
The US Cybersecurity and Infrastructure Security Agency (CISA) has published a new security advisory, drafted jointly with the National Security Agency (NSA) and the Federal Bureau of Investigation (FBI), warning American AI companies about an ongoing “aggressive, malicious, and targeted distillation activities at an industrial scale,” and sharing recommended mitigation steps.
Knowledge distillation
IBM defines knowledge distillation as a “machine learning technique that aims to transfer the learnings of a large pre-trained model, the ‘teacher model,’ to a smaller ‘student model’.” It is used in deep learning as a form of model compression and knowledge transfer, it added, particularly for massive deep neural networks.
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So, knowledge distillation is not illegal or malicious, per se. Its goal is to train a more compact model to mimic a larger, more complex one. In the security advisory, the agencies stress it is “recognized as a legitimate and useful technique in AI research,” but add that China-based AI companies are using it in ill will.
In other words, the agencies claim that instead of spending months and millions developing new capabilities for their models, the Chinese are simply sending huge numbers of carefully designed questions to US models and extracting the answers.
Which companies are engaged in knowledge distillation?
Apparently, all companies worth anything. DeepSeek, Moonshot AI, Alibaba, MiniMax, StepFun, and Z.AI all allegedly “extracted billions of tokens across millions of exchanges/requests from US frontier AI models, including variants of Claude, GPT, Gemini, and Grok, since at least late 2024.” CISA also stressed that this was likely done with the awareness of the Chinese government. It hasn’t outright said, “with its blessing”, although it could be read between the lines.
The advisory shares a thorough list of all the models that were being trained, as well as all the models being taken advantage of.
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