Nvidia CEO Says Model Distillation Is Competition, Not Theft

Nvidia CEO Jensen Huang said on September 28, 2026 that AI model distillation — using outputs from other models to train new ones — is market competition, pushing back against the U.S. administration's characterization of the practice as theft.

Appearing on CNBC's “Squawk Box,” Huang was asked whether model distillation amounts to “looting.” “That's called competition,” he replied. He said companies should be free to test rivals' products, and noted that some firms have taken apart Nvidia's products to understand how they work. “I certainly don't want them to do that,” he said, “but competition makes everything better.”

Huang added that if a company does not want others using its products, it can know its customers and shut off the relevant services.

The remarks follow Treasury Secretary Scott Bessent's July 2026 description of distillation as “theft” and his threat of sanctions against overseas firms using the technique to draw technological capability from U.S. models. Earlier in September 2026, the U.S. Cybersecurity and Infrastructure Security Agency accused Chinese AI firms of running “industrial-scale knowledge distillation,” and Anthropic said it had found “illegal distillation” by Alibaba and DeepSeek. China has rejected the allegations.