Nvidia CEO Jensen Huang says AI model distillation amounts to competition, not theft, pushing back on the characterization used by U.S. officials. Treasury Secretary Scott Bessent has separately called the practice theft and threatened sanctions, as U.S. agencies accuse Chinese AI firms of using it to extract capability from American systems.
Asked whether distillation amounted to something other than theft, Huang told CNBC's Squawk Box on Monday: "That's called competition."
Huang said companies are free to test a rival's products as much as they want, adding that Nvidia's own hardware is sometimes stripped down to its components as competitors try to learn how it works. He said he would prefer nobody learned from Nvidia's products, but that competition makes everything better. Companies that don't want their products used that way, he said, can identify their customers and cut off service instead.
Distillation involves training a model on another model's outputs to absorb its capabilities. Treasury Secretary Scott Bessent has separately called the practice theft and threatened sanctions against overseas companies that use it to draw capability out of U.S.-built models.
The U.S. Cybersecurity and Infrastructure Security Agency accused Chinese AI companies this month of running large-scale distillation campaigns that violated American firms' terms of use. Anthropic said around the same time that it had found Alibaba's Qwen models and DeepSeek engaging in illicit distillation. China has rejected the claims.
Still, the White House did not immediately respond to CNBC's request for comment.
Source: CNBC
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