While Americans brace for a futuristic AI war of killer robots and bioweapons, experts warn ahead of President Xi Jinping's U.S. visit this week that Beijing is already actively undermining America's global supremacy through AI without ever firing a shot. Experts who spoke with Fox News Digital outlined a stealthy, three-part playbook, which includes extracting the logic of American models, undercutting U.S. developers with free open-source software, and ultimately weaponizing those systems for things like cognitive warfare. They laid out how China bypasses billions of dollars in U.S. research through labs that interrogate cutting-edge American AI and copy its capabilities, while simultaneously flooding the global market with free alternatives.
"I think a ‘race’ is the wrong metaphor for this," Leah Siskind, an AI research fellow at the Foundation for Defense of Democracies, told Fox News Digital. "I think it's kind of like a multi-front war. And in some places, we're winning and some places we're losing." XI PREPARES CHINA ‘FOR BATTLE’ AS EXPERT WARNS OF GRAVE DANGER FACING US AHEAD OF DC SUMMIT While top American tech firms have poured billions into building ultra-expensive, proprietary systems, China has focused heavily on distributing free, open-source models across the globe.
Siskind warned that because American tech is costly and the U.S. sector has largely neglected open-source investment, many Fortune 500 companies are making the financial choice to run their operations on Chinese models—unwittingly opening the door to potential CCP censorship, hidden backdoors and, ultimately, global dominance. "How can you compete with something that's free when American tech is very, very expensive?" Siskind said. "How can we ensure that a Chinese open-source model would be truly clean, that it'd be truly free of CCP censorship?
We can't be—we just wouldn't know. We wouldn't know what sort of trick backdoors might be implanted and how that could rear its head later on." Meanwhile, China expert Gordon Chang warned that Beijing is intentionally using these free models to repeat an economic tactic it previously deployed to corner a different industry. "This is a tactic that China used with solar panels," Chang told Fox News Digital.
"Beijing sees that one day it will drive out the American models on cost and availability, and they will then dominate global AI." CHAD WOLF: CONGRESS HAS A CHANCE TO STOP CHINA FROM TURNING YOUR CAR INTO A CHINESE SPYBut to flood the market with free software, Beijing first needs the underlying technology—and a way to bypass America's massive lead in computing power. Chang noted that the U.S. possesses a commanding lead in physical infrastructure, boasting over 5,400 data centers compared to China's roughly 450, along with far superior microchips. To work around the staggering hardware and energy costs required to train artificial intelligence from scratch, Siskind warned that Chinese labs are closing the gap through a process known as "knowledge distillation"—a method where a smaller model essentially interrogates a larger, smarter American model to copy its logic.
"They are able to leapfrog the process by kind of stealing this information," Siskind said, pointing to the Chinese model DeepSeek as a prime example. "This is how they were able to release models like DeepSeek in 2025, which was seismic news because they were able to show that they were really competing with cutting-edge American models and had invested a fraction of the resources." US ADVERSARY TURNS UP THE HEAT ON AMERICA’S AI LEAD WITH AN UNDERESTIMATED EDGE The threat is not theoretical. Just last week, the Department of Homeland Security issued a joint cybersecurity advisory warning that Chinese companies are conducting "industrial-scale knowledge distillation campaigns" to extract proprietary capabilities from U.S. frontier models.
Extract — continue reading at the source.
