The Trump administration has adopted a tougher stance on the alleged misuse of American artificial intelligence technologies by foreign entities, particularly those based in China. In a recent policy memo, Michael Kratsios, the Chief Technology Officer of the United States, accused foreign firms of engaging in 'distillation'—a process where smaller AI models are trained using outputs from advanced US-developed systems. This move comes as competition in AI between the US and China escalates, with a report from the Stanford Institute for Human-Centered AI indicating that the performance gap between leading AI models in both nations has narrowed. The US government plans to collaborate with American AI companies to enhance detection of such activities and explore punitive measures against offenders. In response, China has rejected these allegations, with Liu Pengyu, a spokesperson for the Chinese embassy, calling them 'unjustified suppression' and reaffirming China's commitment to fair competition. The memo aligns with bipartisan efforts in Congress to penalize foreign actors involved in extracting features from US AI technologies. However, experts caution that distinguishing between legitimate use and misuse of AI outputs presents significant challenges, complicating the identification of unauthorized extraction efforts.