Jensen Huang says AI distillation is competition, not theft

Nvidia CEO Jensen Huang has publicly rejected the characterization of AI model distillation as 'theft,' stating in a CNBC interview that it is 'competition.' This comes as U.S. officials, including Treasury Secretary Scott Bessent, have accused Chinese AI companies of using distillation to extract capabilities from U.S.-built models. The U.S. Cybersecurity and Infrastructure Security Agency (CISA) has accused Chinese firms of industrial-scale distillation campaigns violating terms of use. Anthropic has reported that Alibaba and DeepSeek engaged in 'illicit distillation.' Huang argued that learning from competitors' products is standard practice, though he expressed a preference that it not happen to Nvidia's products. This dispute is a flashpoint in U.S.-China AI competition, with potential sanctions being considered against overseas companies using distillation.