China’s Ministry of Commerce rejected a joint U.S. advisory accusing Chinese AI companies of conducting industrial-scale distillation against American frontier models. The advisory was issued on September 8 U.S. Eastern Time by the NSA (U.S. signals intelligence agency), CISA (U.S. critical-infrastructure security agency) and FBI (U.S. federal law-enforcement agency). A ministry spokesperson said model distillation (training smaller models from larger ones) is a neutral, widely used technique, including among American companies, and accused Washington of applying double standards, protecting industrial monopolies and using national power to suppress competition. The spokesperson said China’s open-source models are available globally and that U.S. research reports acknowledge extensive distillation of Chinese models. The two presidents have agreed to launch an intergovernmental AI dialogue, but China warned it would take retaliatory measures if the United States uses distillation concerns to suppress Chinese AI companies.