China has offered formal discussions with Washington on artificial intelligence governance while rejecting U.S. allegations that Alibaba and five other Chinese AI companies conducted industrial-scale model distillation from American frontier systems. A joint advisory from the NSA, FBI and CISA alleged that campaigns dating to late 2024 used proxy services, shared accounts and bulk premium subscriptions to extract capabilities from Anthropic's Claude, OpenAI's ChatGPT, Google's Gemini and xAI's Grok. Anthropic previously alleged that three Chinese labs used about 24,000 fraudulent accounts to generate more than 16 million Claude interactions. Beijing said distillation is a common industry practice, accused Washington of double standards, and warned it would retaliate against measures targeting Chinese developers. The dispute adds pressure before President Donald Trump and Chinese President Xi Jinping are scheduled to meet at the White House on September 24, their second summit this year. Alibaba shares previously fell 2.64% to $109.69 on Wednesday.