It's worth adding that distillation is not a violation of whatever valid copyright interests a model maker may have (if any). The US Copyright Office has already said AI model-generated output by itself isn't copyrightable. Unless new regulations or laws are enacted, distillation will remain, at most, a customer violating a term of a provider's commercial ToS/EULA.
> We should crack down on industrial-scale distillation operations.
"We consume all intellectual property for our model but you cannot do the same"