Y Combinator’s Garry Tan says 'do nothing' about distillation as AI giants accuse China of copying their tech

Speakers from left, Brett Gibson, Initialized Capital; Jen Wolf, Initialized Capital; Garry Tan, Initialized Capital, on Venture stage during day one of Web Summit 2022 at the Altice Arena in Lisbon, Portugal. Harry Murphy | Sportsfile | Getty ImagesAt a time when some Silicon Valley giants and national security experts are calling for action against Chinese companies engaged in model distillation, Garry Tan, chief executive of famed startup accelerator Y Combinator, is less concerned."I would do nothing" about distillation, he told CNBC's Kate Rooney at Y Combinator's annual Demo Day. "We could argue that there should be an American distillation regime."Distillation is the process of using the outputs of a more capable AI model to train a smaller or less capable one, sometimes illicitly. It has been a major point of concern for frontier model developers, namely OpenAI and Anthropic. Anthropic has accused Chinese companies such as Moonshot AI, DeepSeek, and MiniMax of the practice, while OpenAI believes DeepSeek's V3 and R1 model architectures were distilled from its own GPT-4 and GPT-4o models. In the midst of this, the U.S.'s National Security Agency, Cybersecurity and Infrastruc...