The US State Department has initiated a global alert concerning alleged efforts by Chinese companies, particularly AI startup DeepSeek, to steal intellectual property from US artificial intelligence labs. A diplomatic cable instructs US diplomatic staff worldwide to discuss these concerns with foreign officials, emphasizing the unauthorized extraction and distillation of US AI models. Distillation refers to creating smaller AI models based on the outputs of larger, more costly models, which can significantly reduce training expenses. The White House has echoed these accusations, warning that DeepSeek is targeting major US AI firms to replicate their models. In response, the Chinese Embassy in Washington dismissed these claims as unfounded, asserting that they are attacks on China's AI progress. The cable also mentions other Chinese firms, Moonshot AI and MiniMax, while highlighting the risks associated with using AI models derived from unauthorized distillation, which may lack security protocols and ideological neutrality. This warning comes at a sensitive time, just weeks before a scheduled meeting between US President Donald Trump and Chinese President Xi Jinping, potentially exacerbating existing tensions in the tech rivalry between the two superpowers.