The Distillation Game: Model Providers Face Fundamental Utility-vs-IP Tradeoff
arXiv·medium signal
Formalizes the deployment dilemma for model providers: the same outputs that make a model more useful also make it easier to steal via distillation attacks. Proposes adaptive attacks that break existing defenses and introduces efficient new defenses that maintain output quality. Directly relevant to any company serving models via API — the paper quantifies the cost of IP protection.