The papers suggest Chinese defence institutions see leading U.S. AI models as both a source of technical insight and a way to close the gap with American rivals. U.S. officials have accused some Chinese entities of using distillation to extract capabilities from American AI models, potentially undermining export controls and infringing intellectual property rights. WIDE USE, FROM MONITORING TO MILITARYChinese researchers have used distillation for purposes ranging from content monitoring to military deployment, Reuters' and Jamestown's review of the papers showed. As Chinese AI models close the gap with their U.S. counterparts, military researchers are also examining distillation as a potential security risk. Trevor Koverko, co-founder of AI data company Sapien, said distilled models remain less capable than their teacher models.