Image: Generated with Google’s Nano Banana 2. America’s AI race has a new problem as Washington says foreign actors are not just competing with US models, but trying to mine them. The White House is warning that China-linked entities are running industrial-scale distillation campaigns to extract American AI breakthroughs, with OSTP Director Michael Kratsios accusing foreign actors of trying to “steal American AI.” The memo turns model extraction into a federal policy and national security issue, with the US saying it will work with industry on defenses and explore measures to hold foreign actors accountable. Not one hack, but a grind The alleged playbook runs on volume. The White House says foreign entities “principally based in China” are using tens of thousands of proxy accounts and jailbreaking techniques to slip past detection and extract information from American AI models . These campaigns are not described as a dramatic breach .…