White House accuses China of 'industrial-scale' AI technology theft weeks ahead of Trump-Xi summit

• A House Judiciary Committee hearing presented evidence showing Chinese technology theft costs the U.S. economy between $400-600 billion annually
• Anthropic previously accused China's DeepSeek of using mass-proxy distillation to steal data from its Claude AI model, the same method outlined in the White House memo
• The Trump-Xi summit agenda will include technology discussions, with China expected to seek loosening of U.S. controls on semiconductors and AI alongside talks on the Ukraine war and Iran

Summary: White House Accuses China of AI Technology Theft Ahead of Trump-Xi Summit

The White House Office of Science and Technology Policy (OSTP) has accused China of conducting "industrial-scale" AI technology theft, just three weeks before a scheduled Trump-Xi summit in Beijing on May 14. OSTP Director Michael Kratsios alleged that foreign entities, primarily in China, are using tens of thousands of proxies in coordinated "distillation campaigns" to steal American AI models and technologies.

Key Developments:

• The accusations come one day after a House Judiciary Committee hearing titled "Stealth Stealing: China's Ongoing Theft of U.S. Innovation"
• Sen. Chuck Grassley (R-Iowa) presented evidence showing Chinese technology theft costs the U.S. economy $400-600 billion annually
• China may seek relaxation of U.S. technology controls on semiconductors and AI during the summit

Anthropic-DeepSeek Controversy:

Anthropic, maker of the Claude AI model, previously accused China's DeepSeek of stealing its technology using mass-proxy distillation processes—the same method outlined in the OSTP memo. China gained attention in 2025 with DeepSeek's cost-efficient AI "Sputnik moment," but faces allegations it was built on stolen American innovation.

Market Implications:

The timing of these accusations signals heightened U.S.-China technology tensions ahead of the summit. Technology restrictions and intellectual property protection will be critical negotiation points. After being labeled a Pentagon supply chain risk, Anthropic leadership met with White House officials on Friday to discuss AI and cybersecurity cooperation, suggesting potential shifts in public-private partnerships for AI security.

The summit agenda will include the ongoing Middle East conflict and technology trade issues, with both nations positioning aggressively on AI dominance.