China rejects US 'malicious AI distillation' claims ahead of Trump-Xi summit

China publicly rejected U.S. accusations that Chinese firms are misusing advanced AI models via 'distillation,' urging bilateral cooperation instead. The U.S. cybersecurity advisory details alleged access methods, escalating tech-related tensions just before a Trump-Xi meeting. The dispute signals growing friction in U.S.-China tech relations, with potential implications for AI governance and trade.