The U.S. intelligence community must dedicate more resources to protecting American artificial intelligence companies from foreign espionage, former officials told the House Intelligence Committee on Tuesday, arguing that China will use a range of intelligence-gathering techniques to steal proprietary AI technology and advance its own military and economic goals.
The hearing focused on emerging threats to the United States in the 25 years since the terrorist attacks of September 11, 2001, and also highlighted the growing role of AI in a range of national security concerns, including cyberattacks, autonomous drones and foreign influence operations.
“Of course, our intelligence services and agencies will have secrets that will always be of utmost importance to foreign intelligence adversaries, but if you are [China’s Ministry of State Security] “Today you’re dealing with pioneer model companies,” said Frank Cilluffo, a former George W. Bush homeland security official who directs Auburn University’s McCrary Institute for Cyber and Critical Infrastructure.
“I think we actually need to rethink counterintelligence. It’s not just the traditional spy-on-spy, information-on-information competition,” he added. “The key is in our hands at the moment, it won’t be in the government alone.”
Access to proprietary U.S. AI research is valuable to foreign adversaries because it can help them close technology gaps without having to incur the cost and time of developing those capabilities themselves.
U.S. officials have repeatedly noted that China has stolen proprietary national security information, particularly data on military aircraft. More recently, the White House and major U.S. AI companies have accused Chinese firms of conducting distillation operations in which developers secretly use advanced U.S.-made AI models to improve their own.
“The counterintelligence threat has lagged far behind,” said retired Lt. Gen. HR McMaster, who served as national security adviser during President Donald Trump’s first term. “I think we still have a lot of work to do,” he said, describing how U.S. counterterrorism efforts after 9/11 squandered resources over the years tracking China’s efforts to embed spies and other researchers into American companies.
The range of counterintelligence targets is now broader, particularly including private companies, said Ben Buchanan, who served as special adviser on AI in the Biden administration’s White House.
Counterintelligence operations will also evolve with AI, he said.
“Of course, cyber operations have already changed, but even when you look at things like human intelligence and human intelligence operations detection, it is a different technical paradigm that leads to different types of analysis that AI alone can do,” Buchanan said.
He also criticized the Trump administration’s recent moves to ease restrictions on the export of advanced chips to China.
“America has a major structural advantage in AI because of its democratic chip production ecosystem, and we should take full advantage of that structural advantage,” Buchanan said. “We should be much more aggressive in enforcement and smuggling to stop China from catching up.”
Many individual states are also not well equipped to track and respond to Chinese espionage efforts, said Seth Jones, a former U.S. Special Operations Command official who now directs the defense and security division at the Center for Strategic and International Studies.
Recent orders on quantum computing have focused in part on tasking the FBI and intelligence agencies with better protecting the nation’s quantum research from foreign espionage.
The White House has directed national security agencies to help protect advanced U.S.-made AI from foreign threats, but has not created a dedicated counterintelligence framework consistent with quantum technology guidelines.
https://www.nextgov.com/artificial-intelligence/2026/07/us-ai-labs-are-emerging-target-foreign-spies-experts-warn-congress/414927/
