Bad news! Serious stuff! The Communist Party of China is well known for its intellectual property theft and espionnage of the West. Competing by illegal means! Very troubling!
What seems to be particularly troubling is that these Chinese companies are apparently sharing the illegal means facilitating these distillation and other attacks.
"A new report released Thursday by Anthropic alleged persistent distillation attacks by China-based AI companies, which have escalated in recent months as competition in the space has intensified.
“Over the last several months, unauthorized labs have developed increasingly sophisticated methods to circumvent our defenses and harvest the capabilities of US frontier models,” the report reads. “The campaigns we identified targeted some of Claude’s most valuable capabilities, including agentic capabilities and tool use, coding and data analysis, and logical reasoning.”
Anthropic previously spoke out about distillation attacks in February, even calling out specific labs.
OpenAI has reported similar activity, which it attributed to DeepSeek specifically. But the campaigns detailed in Anthropic’s new report are both larger and more aggressive. All told, the company observed nearly 200 million exchanges linked to distillation attacks, attributed to five separate campaigns. ..."
"... We define illicit distillation as an industrial-scale, covert campaign to extract a model’s capabilities and replicate them in another model without authorization. Illicit distillation is typically enabled by fraud: sophisticated networks of fake accounts created with stolen credit cards, login credentials, and API keys. ...
Beyond distillation, Alibaba also used Claude to advance its AI R&D efforts. Alibaba used Claude to help develop its internal infrastructure for model development. Claude was used to help develop Alibaba’s reinforcement learning (RL) environments and advance model architecture research.
Alibaba accessed Claude through two main pools of fraudulent accounts. The first consisted of nearly 5,000 fraudulent accounts leveraging residential proxies, disposable emails, and virtual-card payments to obfuscate their access.
When we banned this pool of accounts, Alibaba quickly shifted its traffic through the second pool.
Some of these accounts were found to have been funneling requests from DeepSeek and Xiaomi, demonstrating that the same proxy service networks are often used by a variety of organizations. ..."
The graphic below illustrates the life cycle of an illicit distillation campaign.
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