# Nvidia CEO calls AI distillation 'competition' amid US-China tensions

Digest AI · Policy & Regulation · published 2026-09-28T13:58:49Z

Canonical: https://digestai.news/story/nvidia-ceo-calls-ai-distillation-competition-amid-us-china-tensions

## Summary

Nvidia CEO Jensen Huang dismissed accusations that AI model distillation—training new models on outputs from existing ones—is theft, calling it instead 'competition' during an interview with CNBC on Monday. His remarks follow U.S. government warnings, including a July statement from Treasury Secretary Scott Bessent, who labeled distillation 'theft' and threatened sanctions against companies using it to extract capabilities from U.S.-built models.

The U.S. and China have escalated tensions over AI development, with the U.S. Cybersecurity and Infrastructure Security Agency (CISA) accusing Chinese firms of running 'industrial-scale knowledge distillation campaigns' that violate terms of use. Anthropic also reported in September that Alibaba and DeepSeek engaged in 'illicit distillation.' China has denied these claims. Huang acknowledged that companies sometimes reverse-engineer Nvidia’s products but argued that competition drives innovation, while suggesting U.S. firms could opt out by disabling services.

## Key points

- Nvidia CEO Jensen Huang called AI distillation 'competition,' rejecting U.S. accusations of theft or intellectual property violation
- Treasury Secretary Scott Bessent previously called distillation 'theft' and warned of sanctions against overseas users of U.S. AI models
- China denies U.S. claims of large-scale distillation campaigns targeting U.S. models, including those by Alibaba and DeepSeek

## Why it matters

The debate over distillation highlights a growing legal and geopolitical divide over AI model training, with implications for global collaboration and U.S.-China tech rivalry.

## Sources

1. [Jensen Huang says AI distillation is 'competition.' Scott Bessent has called it 'theft'](https://cnbc.com/2026/09/28/nvidias-jensen-huang-ai-distillation-china.html) (CNBC Technology, 2026-09-28)

Part of the developing story: [AI Safety Breach Saga Unfolds](https://digestai.news/thread/irregular-linked-to-openai-anthropic-and-meta-model-hacking-incidents) (6 stories)

## Cite

Digest AI, "Nvidia CEO calls AI distillation 'competition' amid US-China tensions", 28 September 2026, https://digestai.news/story/nvidia-ceo-calls-ai-distillation-competition-amid-us-china-tensions

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