The United States is ramping up efforts to combat what it describes as China's 'industrial-scale theft' of intellectual property from American artificial intelligence labs. Reports indicate that Chinese AI models, such as DeepSeek, have been accused of using outputs from US models through a technique known as distillation. This has raised alarms among US companies, with Google and Anthropic reporting attempts to clone their AI systems. Michael Kratsios, director of the White House Office of Science and Technology Policy, stated that the US has evidence of foreign entities, particularly from China, engaging in campaigns to distill US AI systems. He noted that these campaigns involve using proxy accounts and jailbreaking techniques to access proprietary information. The US government is exploring measures to hold these foreign actors accountable, and Congress is being urged to treat model extraction as industrial espionage, with potential penalties to deter such activities. The urgency of the situation reflects growing concerns about competition in the AI sector and the need for robust legal frameworks to protect American innovation.