US vows to fight ‘industrial-scale’ AI theft by Chinese firms

The White House Office of Science and Technology Policy (OSTP) said in a memo dated April 23, 2026 that foreign entities, principally based in China, are conducting deliberate, industrial-scale campaigns to extract capabilities from U.S. frontier AI systems. OSTP Director Michael Kratsios warned that these campaigns leverage tens of thousands of proxy accounts and jailbreaking techniques to evade detection and expose proprietary capabilities.

The memo, circulated to federal agency heads and posted on social media, said the government has information pointing to coordinated efforts that use resellers, overseas intermediaries and other proxies to maintain access after initial restrictions. The OSTP indicated it will work with U.S. AI companies to share intelligence on tactics, bolster defenses and pursue ways to hold offenders accountable.

For markets and technology firms, the allegations raise intellectual property and national security concerns that could influence investment flows. While equity markets have not shown an immediate sell-off tied solely to the memo, sector risk premia for AI and cybersecurity are likely to adjust as firms tighten access controls and increase spending on model protection. Companies offering enterprise security and IP protection may see heightened investor interest.

The development comes amid broader U.S.-China strategic competition over advanced technologies. Beijing has rejected what it calls groundless accusations, but the U.S. move is likely to intensify scrutiny of cross-border tech transfers and could feed into discussions on export controls and international IP enforcement ahead of planned high-level meetings.

Analysts expect near-term outcomes to include stricter access and verification measures by AI labs, more public-private intelligence cooperation, and potential regulatory responses to deter large-scale distillation efforts. For investors, key items to watch are corporate disclosures on model access policies, cybersecurity capital expenditures, and any government actions on trade or export controls that could reshape competitive dynamics in the AI sector.