White House Issues NSTM-4 Memo Accusing China of 'Industrial-Scale' AI Model Distillation

CNBC / OSTP·high signal

The Office of Science and Technology Policy issued a memorandum titled 'Adversarial Distillation of American AI Models' (NSTM-4) on April 23, accusing China and other foreign entities of 'deliberate, industrial-scale campaigns to distill U.S. frontier AI systems' using proxy accounts and jailbreak techniques. The memo distinguishes lawful open-source distillation from unauthorized extraction, signaling potential tighter controls on API access. Reddit's r/LocalLLaMA discussion (360 upvotes, 382 comments) centers on whether this creates a policy path toward restricting open-weight model releases.