[boondongle]

Almost all markets depend on some form of regulation whether its as simple as "leave everyone alone but no stealing" or "every participant has to source every object through mountains of red tape."

Thus far the US has not really chosen to go the Chinese rare-earth method yet. The problem with distillation attacks is the end result is everyone who is not doing them is going to deal with some kind of regulation whether it's complete loss of access, or the amount of control you'll have to give up to access them will be ridiculous.

Sort of like the "stealing music is fine" but "lets freak out now that it's producing visual art", in the end the entire thing is a social construct. Whether this is treated as theft or "business as usual" is entirely societal.

Eventually the gap will close, unless there's a major breakthrough that hasn't been made yet.

[zaptrem]

Given these models could not have been trained in the first place if they had to license every line of random fan fiction on the internet, I think distillation also being fair game is a tradeoff everyone should be willing to take (unless they want to decelerate, but that's a different conversation).

[andriy_koval]

Us models didnt pay for licenses too

[joe_mamba]

We're still in the early days of the AI industry timeline(relative to traditional industries). Not everything has yet been litigated.

Taxes on AI subscriptions or AI capable hardware, to financially compensate IP holders for (potential) IP theft, could very well arrive in the near future, once the industry is mature.

If this shocks you and sounds preposterous, I'll remind you that in several EU countries, we still pay extra taxes on any and all storage mediums and on devices with built-in storage (tapes, CDs, DVDs, HDDs, SSDs, tablets, phones, etc) simply because they can be used to store pirated content, decisions based on laws from 50-100 years ago, and the money goes to the national unions and associations of music and arts IP holders. It's basically a lobby pushed and government legalized extortion racket that no voter agrees with or can change but has no choice but to conform either way.

So I guarantee you in the future, it will be the same for AI subscriptions and hardware capable of running LLMs locally. Every time you purchase a Claude or ChatGPT subscription, an Nvidia GPU, Intel/AMD SoC PC or an Apple/Qualcomm powered smartphone, you'll pay a government enforced tax to the likes of Sony, Axel Springer, etc. for licensing their IP, whether you want to or not. In the EU at least. US maybe not.

[andriy_koval]

I think we are going to direction where AI corps will have stronger lobby compared to IP holders.

[tough]

giving peanuts to the other guys is a very well trodden strategy to keep in power tho

[tristanj]

That is incorrect. Anthropic paid $1.5 billion in compensation to copyright holders for use of their content in training data. OpenAI pays hundreds of millions per year across 150+ licensing deals for access to copyrighted data. Meta and Alphabet have similar arrangements.

Under the settlement, Anthropic was forced to delete the pirated data they were training on.

Chinese labs can still train on pirated data. I doubt the Chinese models operate under similar licensing agreements.

[orangecat]

Anthropic paid $1.5 billion in compensation to copyright holders for use of their content in training data.

The payment was for illegally downloading copyrighted material, not training. Training was explicitly ruled to be fair use.

[tristanj]

Partially correct. The court explicitly ruled that training on pirated data, which is what Anthropic was doing, is not considered fair use.

Training on legally acquired / licensed data is potentially fair use.

[3836293648]

It's not potentially, it's settled. At least for now as neither case wanted to move on to appeals

[andriy_koval]

they didn't pay yet, because court challenged settlement as inadequate.

> I doubt the Chinese models operate under similar licensing agreements.

US corps likely pay licenses when afraid to be sued, or have troubles getting that data, otherwise they just take data, which was demonstrated many times. The same apply to Chinese corps, alibaba totally can be sued in US.

[tristanj]

China is infamous for weakly enforcing copyright law. Even when it is completely obvious that Chinese labs are training models on pirated data, US copyright holders face a virtually impossible task of proving it in court. Those lawsuits won't go anywhere.

[andriy_koval]

There are tons of lawsuites which resulted in banning Chinese companies from doing business in US, those lawsuits totally have consequences.

[Planktonne]

The US is currently infamous for weakly enforcing copyright law when it comes to AI companies.

[beambot]

They settled with a subset of copyright holders. Guarantee they violated lots of others' rights in the process

[idiotsecant]

That's like saying someone is a big proponent of community law and order, and they donated $1000 to the county sheriff when actually they got caught drunk speeding in a school zone.

[tristanj]

A false equivalence. A more correct example is: Anthropic was speeding, got caught by the county sheriff, and paid the fine. Anthropic stopped speeding.

Meanwhile, Chinese labs are speeding in a different county. Everyone knows they are speeding, yet the sheriff won't pull them over, so they just keep doing it.

This lax enforcement gives Chinese labs a structural advantage over American ones.

[r-w]

> Anthropic stopped speeding.

Do you purport to know for a fact that they're no longer training on the data they'd pirated? Because I highly doubt that.

[codedokode]

They only paid when they got caught. And not to everyone.

[tristanj]

But they still paid. I don't see any Chinese labs paying billion dollar infringement settlements.

Chinese labs can freely train on pirated material, which is a structural advantage.

[ForHackernews]

After the fact. They did the same thing Youtube, Uber and Airbnb did: Break the law, eventually get caught, cut some deal where they pay a pittance and keep doing the same thing but now with leverage on their side.

[yogthos]

They used two of my books and I'm still waiting for my cheque here.

[polotics]

really!? nobody paid me anything for my comments on HN.

[eichin]

The only ones getting paid this time around had registered copyrights (in the US at that.)

[maximus_01]

Let’s not forget that Anthropic only paid that to settle a class action lawsuit.

[ttoinou]

Because they got caught

there is much less intellectual property in China so it’s not ‘theft’ (as you can’t put property on information)

[vitally3643]

Compensation is not license

[reinitctxoffset]

How is distillation an "attack" but gigascraping the Internet to the point of crashing servers and everyone needs Cloudflare and Anubis now not an "attack"?

I'm not aiming for a what about kickflip here: I'm saying we need to either agree on some rules or stop crying foul. Maybe the coherent legal theory is that neural networks and intellectual property don't interact. That would be weird but it would be consistent, a market could price it, I could do coding stuff and know if I was illegaling.

But this weird gerrymander that no judge will really rule on in an emphatic way is like, bad for the planet, bad for markets, bad business.

There are a lot of reasons to look forward to DeepSeek Huggingface drop kicking the unambiguous frontier weights in like, November, but I think my favorite one will be "who's distilling now bitch?"

[gpm]

I think you've basically got the legal theory. Training a neural network isn't prohibited by copyright law so if you can legally get your hands on something (e.g. by sending a GET request to someone with rights to serve the contents of their web page, or by buying a book) without signing a contract to not train on it, you can train on it.

But the American AI companies only let you query their models if you first sign a contract to not train on the output.

It's hypocrisy and unfair, but I think there's a strong legal argument for it.

Of course China can simply decline to assist in enforcing that contract... But I would expect US courts to do their best to.

[sensanaty]

> to someone with rights to serve the contents

Now THAT'S doing some heavy lifting lmao. The vast, vast, VAST majority of the original datasets were from pirated books and the like. Also, arguably a robots.txt is the exact mechanism to follow to do the mass GET-ing, yet the AI cos choose time and time and time again to simply ignore it and be as abusive as they possibly fucking can

[gpm]

> The vast, vast, VAST majority of the original datasets were from pirated books and the like

And there's been significant legal consequences as a result

> Also, arguably a robots.txt is the exact mechanism to follow to do the mass GET-ing

You're free to argue this of course, but the courts have largely rejected it already pre LLMs. See for example hiQ Labs v. LinkedIn

[fooblaster]

Yes, anthropic and openai have really been brought to their knees and ipos cancelled because of the legal consequences of obtaining their training data.

[gpm]

This would have been a problem but it turns out that Anthropic is actually valued multiple orders of magnitude more than a copy of all the books in the world. So they survived the significant legal consequences.

[BrenBarn]

> It's hypocrisy and unfair, but I think there's a strong legal argument for it.

That right there is the problem.

[inigyou]

The penalties for breach of contract are much less than for copyright infringement. Breaching contracts and paying the penalties is often a viable business strategy. You're supposed to make the other side whole for any losses they incurred due to you not following it.

[SecretDreams]

> but I think there's a strong legal argument for it.

Maybe today. I doubt it tomorrow. Legal and not legal, largely, has to answer to the population sooner or later. Ultimately, humanity decides legality. And I don't think the frontier labs will get a pass from humanity in the midterm, let alone the long term. I think you'll see the rules change towards something more "intent" driven. And there's absolutely no difference in intent between Frontier labs and everyone chasing them.

Frontier labs just want the door closed behind them, as do their investors, because they know the money will never be recouped if others can do the same magic tricks.

[nickysielicki]

Contract law is never going to prevent this.

[gpm]

Why not? Seems like a perfectly normal contact term to me.

Or do you just mean that US courts don't have enough teeth to prevent Chinese companies from violating contracts? On that I agree.

[nickysielicki]

I mean the latter, but more narrowly: China would never allow the United States to have a monopoly on machine intelligence if the only thing standing in the way of a domestic alternative was the Anthropic ToS. In general, I think that China is willing to agree on certain things relating to intellectual property. But not on this, it’s too big.

The US is already publicizing the way they are using Claude with Palantir for war gaming purposes. It’s a matter of national defense. Contract law has no meaning here.

[inigyou]

Even if enforced do you know what the penalty would be? Not much!

[reinitctxoffset]

Eh, I think you've done a pretty good job summarizing a collection of settlements with a few narrow bench rulings for seasoning. I'm not sure I follow you to it being a coherent legal theory. Buying a book in a bookstore is sure legal, and excerpting from it for e.g. literary criticism is pretty settled. Downloading every torrent of all e-books ever is pretty clearly illegal (or at least it fuckin would be if I did it). Pretty sure like, multiple labs have been popped for that though.

Situation right now seems more like a fragile detente: if you got a Hill staffer drunk and hounded him long enough he'd probably be like "God damnit the market will fucking tank if we don't get these two IPOs out north of a trillion. And don't even get me started on how I'm going to sell Chinese AI to a Senate that still calls people Nipponesians when no one is looking. We're doing the best we can alright, get off my back man."

We have a situation, but it's not exactly A&M Records, Inc. v. Napster.

[gpm]

> Downloading every torrent of all e-books ever is pretty clearly illegal (or at least it fuckin would be if I did it). Pretty sure like, multiple labs have been popped for that though.

Oh it is, and at least anthropic has paid $1.5 billion and deleted there torrented copies and not released any models derived from them as a consequence.

The thing is it turns out to be not that expensive to just buy a copy of every book legally and scan them. And there's even precedent that this is legal predating LLMs (Google books)

[nubg]

> and deleted there torrented copies and not released any models derived from them as a consequence.

I have a bridge to sell you

[gpm]

Great, let's go down to the courthouse and get some sworn testimony as to the ownership, value, condition, and so on and so forth of the bridge. And some document review and discovery run through professional legal firms under the same conditions. And perfectly reasonable and verifiable explanations as to why you own the bridge and are selling it (namely that you bought a copy of literally every book in existence in the meantime).

Facts are in fact knowable, and the US legal system is in fact not terrible at getting to them.

[Lerc]

Knowlege should not have ownership. Training and distillation should be allowed

Granting people some form of control over knowledge only serves the public interest inasmuch it provides incentive to create more of it. Mass media, effortless duplication, and copyright extensions had already broken this to the point where control of knowledge was suppressing creation of new knowledge more than it facilitated.

The world has changed, we need a mechanism that works for the public interest that applies to the facts as they now are.

[throw1234567891]

American labs have ripped everything out of the internet. And now they cry someone else is “stealing” from them. Cry me a river.

[Forgeties79]

This is nothing like music piracy.

[areoform]

    >  The problem with distillation attacks

I think it's worth stepping back here and pointing out the obvious. Y'all waging war on math. And I'm sorry, but that's the computing equivalent of legislating gravity.

Apologies for repeating myself here, but what you call "distillation" is function approximation.

I feel for the teams at Anthropic and Open AI, but unlike startups from prior eras; Anthropic and OpenAI have decided to be in the business of selling compute. Not creating a product that uses compute, but a product that's math running on compute. This is different from what Google is (or, rather was. As always, RIP Google 1998-2019).

Google's algorithm might be math, but Google search isn't. Google search is a process that's continuously operating in the background. Google crawls pages. Google stores and indexes what it finds. Google then exposes this to retrieval via its algorithm. User uses algorithm.

Now, let's compare that to AI models. When Anthropic serves Mythos / Opus etc, they're taking input or x from their user, doing compute, and then serving the result of the Mythos / Opus function, i.e.,

    f(text) -> (text_transform)

Where f is a continuous function, https://www.turing.ac.uk/sites/default/files/2025-11/languag...

According to Stone-Weierstrass, given enough values of y for f(x), anyone can approximate this function.

The fidelity and sophistication of this approximation definitely requires a lot of cleverness and effort, and it is arguably an imposition on Anthropic and OpenAI. But on a long-enough timeline, they don't even have to poll Anthropic or OpenAI. As the internet is flooded by PRs, content, emails written by Mythos / Claude, and just people otherwise sharing the results of Claude prompts, then there's an ever increasing set of data to approximate the f(x) that's f_Claude.

Eventually, in the future, anyone will be able to create a good enough approximation of the f_Mythos. Which is Anthropic's product.

Anthropic and OpenAI can now wage war on mathematics and the open-ended compute. Or, they can adapt and build a better product.

Choosing Option B was the Silicon Valley option / choice. I think the OG large-scale Valley lobbying effort, the Semiconductor Industry Association, was unique in that it prioritized and chose to do real research.

https://en.wikipedia.org/wiki/Semiconductor_Industry_Associa...

https://en.wikipedia.org/wiki/Semiconductor_Research_Corpora...

This helped the industry to survive and outcompete the pressure they were facing (at the time).

[JSR_FDED]

I like your point that there is so much content being created by LLMs that at some point there’s enough to perform something like distillation without even needing to interact with the LLMs directly.