Relevant article - https://www.anthropic.com/news/detecting-and-preventing-dist... (3 labs generated over 16 million exchanges with Claude through approximately 24,000 fraudulent accounts). So extraction in this context is distillation.

While it is obvious to many, a modern LLM is built in roughly three stages: the foundation (pretraining) model, then SFT/supervised fine-tuning (distillation makes it easy), then the RL/RLHF stage on top (most effort-intensive). For today's reasoning models, RL/RLHF is becoming the most compute-intensive part.

Companies like Anthropic spent millions building those fine-tuning examples. A follower can shortcut that on both cost and time by distilling, and it will keep happening: every time the frontier lab climbs higher, others will find a way to shortcut the new gap. There's very little Anthropic can do beyond fraud prevention and blocking accounts that violate their terms of service.

On the policy question, I'm completely against banning Chinese models. I'm a heavy Claude Code user and I'll keep being one. But there should absolutely be price competition. China is eating the rest of the world for breakfast, lunch and dinner on manufacturing, and it did not help to ban them. Frontier pricing can't sit at 10x a capable competitor. It doesn't need to be at par either — demand is higher, and quality, trust, and fewer tokens to finish a task are worth a premium — but 4–5x is defensible.