What is AI model distillation and why is it becoming a US-China flashpoint?

Model distillation is a technique where developers train smaller, more efficient AI systems to mimic the performance of larger, more powerful models. Because this process allows advanced capabilities to run on less sophisticated hardware, US officials are concerned it could help China circumvent export controls on high-end chips. Regulators are now evaluating whether to restrict the transfer of these model-copying methods to prevent adversaries from accessing cutting-edge technology without the necessary specialized infrastructure.