Nvidia CEO Jensen Huang stated on Monday that AI model distillation—the process of training models on the outputs of other models—is "competition," contradicting recent characterizations of the practice as theft by U.S. officials.
The comments come amid rising tensions in the AI race between the U.S. and China. In July, U.S. Treasury Secretary Scott Bessent described distillation as "theft" and threatened sanctions against overseas companies using the method to extract capabilities from U.S.-built models. Additionally, the Cybersecurity and Infrastructure Security Agency has accused Chinese AI companies of conducting "industrial-scale knowledge distillation campaigns."
Speaking on CNBC's Squawk Box, Huang defended the practice by saying, "You're allowed to test somebody else's products all you want." He noted that while he would prefer companies did not learn from Nvidia's products, "competition makes everything better." Huang suggested that companies who wish to prevent such use should instead focus on knowing their customers and disabling services.
The practice has faced scrutiny from major AI developers as well. Anthropic recently reported finding evidence of what it described as "illicit distillation" by Alibaba and DeepSeek. China has rejected these claims.
Sources
- Jensen Huang says AI distillation is 'competition.' （Hacker News Frontpage, 2026-09-28）