Jensen Huang Calls AI Distillation Competition, Not Theft

Asked whether Chinese labs learning from US AI models amounts to stealing, Nvidia CEO Jensen Huang told CNBC: “That’s called competition.” He compared it to rivals taking Nvidia products apart to see how they work, and said model providers that object can identify customers and cut off access.

The clash with Washington is narrower than the headline suggests. A September advisory from CISA, NSA and the FBI calls distillation a valid training method, but alleges that Chinese companies used industrial-scale queries that violated US model providers’ terms of service. Treasury Secretary Scott Bessent has threatened sanctions for covert attacks he says cross into IP theft, not for every use of distillation.

Huang’s hardware analogy makes the case for learning from a competitor. It does not answer the government’s allegation about how some labs obtained access.