{"id":37012,"date":"2026-07-18T10:02:56","date_gmt":"2026-07-18T04:32:56","guid":{"rendered":"https:\/\/banitoday.com\/after-anthropic-and-openai-accuse-chinese-ai-companies-of-distillation-billionaire-chamath-palihapitiya-says-cannot-complain-when-you-yourself-have\/"},"modified":"2026-07-18T10:02:56","modified_gmt":"2026-07-18T04:32:56","slug":"after-anthropic-and-openai-accuse-chinese-ai-companies-of-distillation-billionaire-chamath-palihapitiya-says-cannot-complain-when-you-yourself-have","status":"publish","type":"post","link":"https:\/\/banitoday.com\/hi\/after-anthropic-and-openai-accuse-chinese-ai-companies-of-distillation-billionaire-chamath-palihapitiya-says-cannot-complain-when-you-yourself-have\/","title":{"rendered":"After Anthropic and OpenAI accuse Chinese AI companies of \u2018distillation\u2019, billionaire Chamath Palihapitiya says, \u2018Cannot complain when you yourself have \u2026 \u2019"},"content":{"rendered":"


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\"After<\/div>\n<\/div>\n<\/div>\n
Anita Verma-Lallian and Chamath Palihapitiya<\/span><\/div>\n<\/section>\n<\/div><\/div>\n<\/div>\n

Tech billionaire and venture capitalist Chamath Palihapitiya has spoken on AI intellectual property debate following allegations from top US labs OpenAI<\/a> and Anthropic that accuse Chinese AI firms of \u201cdistillation\u201d \u2013 the practice of copying the capabilities of a rival\u2019s expensive AI model at a fraction of the cost. Pushing back against the complaints of the US frontier labs, Palihapitiya argues that tech giants cannot complain about competitors copying their systems when their own foundational AI models were built by scraping copyrighted human data from the open internet without permission.<\/p>\n

What US frontier AI labs claim<\/h2>\n<\/p>\n

Palihapitiya\u2019s comment came soon after the economic and moral defense of distillation was highlighted in an analysis of Anthropic’s own Fable model. The company blamed Chinese AI companies to have used distillation to train their models, thereby, calling it \u2018illegal\u2019.Major AI labs have spent billions of dollars on computing power, data curation and human feedback to build their models. Yet, to gather their initial training datasets, they scraped millions of copyrighted books, news articles, and proprietary code from the public internet without compensating the original human creators. Their legal defense has rested on \u201cfair use\u201d.Palihapitiya points out in a long post on X (formerly Twitter) that distillation applies this exact same logic, only turned back onto the tech giants themselves. In distillation, a competitor’s AI is simply \u201clearning\u201d from the output data of another AI. He also called the sudden anxiety gripping Silicon Valley driven by economics rather than ethics. Distillation \u2018allowed\u2019 Chinese companies to effectively free-ride on the astronomical research and development costs borne by US pioneers.<\/p>\n

What Chamath Palihapitiya said<\/h2>\n<\/p>\n

From Anthropic\u2019s Fable model on the economic, moral, ethical and legal opinion of distillation of Anthropic\u2019s Fable model: <\/span>Whether it\u2019s a moral problem is genuinely contested. The labs trained their models on the open internet \u2014 copyrighted books, articles, code \u2014 largely without permission, and their fair-use defense is essentially \u201clearning from data is transformative.\u201d Distillation is the same argument turned against them: a model learning from another model\u2019s outputs. <\/span>It\u2019s hard to construct a moral principle that permits the first and forbids the second, which is why critics call the labs\u2019 objections hypocritical rather than principled.<\/span>Distillation is contentious because it lets a smaller model absorb much of a frontier model\u2019s capability by training on its outputs \u2014 effectively free-riding on billions of dollars of compute, data curation, and RLHF work. <\/span>The DeepSeek episode made this concrete: if you can extract 80% of the value of a $1B training run for $5M by querying the API, the economics of frontier labs get shaky. <\/span>That\u2019s the core anxiety \u2014 it\u2019s a moat problem before it\u2019s anything else.<\/span>Legally, it\u2019s mostly a contract issue, not a copyright one. Model outputs likely aren\u2019t copyrightable (no human author), so the labs\u2019 real weapon is terms of service \u2014 every major API prohibits using outputs to train competing models. But ToS violations are breach of contract, hard to detect, hard to prove, and nearly unenforceable against a foreign entity. There\u2019s no statute against distillation itself. So the practical answer: it\u2019s an economic problem dressed in legal clothing, with a moral argument that cuts both ways depending on whose training data you start counting from.<\/span><\/div>\n<\/div>\n


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Anita Verma-Lallian and Chamath Palihapitiya Tech billionaire and venture capitalist Chamath Palihapitiya has spoken on AI intellectual property debate following allegations from top US labs OpenAI and Anthropic that accuse Chinese AI firms of \u201cdistillation\u201d \u2013 the practice of copying the capabilities of a rival\u2019s expensive AI model at a fraction of the cost. Pushing […]<\/p>\n","protected":false},"author":1,"featured_media":37013,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[299],"tags":[],"class_list":["post-37012","post","type-post","status-publish","format-standard","has-post-thumbnail","category-latest-news"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t