In a way you could see this as a case of Robin Hood. The US companies exfiltrated all the data on the planet just to hoard it for themselves now and accuse anyone who tries to get a piece of that back from them, and the Chinese labs are distilling it to offer it for cheap.
Obviously a bit more complicated than that but it still holds pretty well.
Sure, and large-to-small is a key part of the definition, and why it's called distillation (cf concentrating something). When Anthopic use synthetic data generated by Opus to train Sonnet or Haiku, then this can correctly be considered a type of distillation.
When Anthropic accuse Chinese companies of "distillation", it seems they are using this word to refer to two potential uses of their model outputs:
1) Using Anthropic model outputs (aka synthetic data) as training data, especially for reasoning, for Chinese models. This really isn't distillation though, since (unlike when they distill their own models) Anthropic don't actually provide the reasoning in their model output, only a "summary" designed to hide the actual reasoning. You can't distill what you are not given!
2) Another way Chinese companies may be using US LLMs is for "LLM as judge" where you are just asking the model to use it's expertise to judge/rate something that you provided yourself (to provide RL training rewards), although for coding you really want hard rewards which are easy to obtain, not fuzzy "looks good to me" ones.
Of course Anthropic are trying to pull the drawbridge up after themselves and their TOS says you can't use their models to develop anything that competes with them, and this seems to be what they are generically referring to as "distillation" - any use of their models that they suspect is being used by the Chinese to improve their own models, not just what what might more technically be called distillation, unless you want to define that word so broadly that it does mean this!
And if just partial output is all that it takes to declare a model distilled, then every model trained on Internet content since 2023 is now technically a "distilled" ChatGPT and Claude model.
2) This is a stretch: it allows Anthropic to arbitrarily define "attack" via TOS, and ignores the fact that the generated training data is literally paid for by the "attackers".
It's a post-facto attack, which doesn't sit right linguistically to me.
"You're trying to kidnap what I've rightfully stolen."
Lol. Isn't this literally many of the same tactics OpenAI and Anthropic used to scrape the internet? So now it's an "attack", but previously it was just "training".
2) The word "attack" is standard security vocabulary. Per RFC 4949:
There are hundreds of named "attacks".3) The "attack" part of "distillation attack" refers to distillers creating tens of thousands of fraudulent accounts, using proxies to bypass georestrictions, deepfaked IDs, and paying real people to pass biometric KYC checks. Who then blended this in with real user traffic to conceal their behavior.
It doesn't refer to the AI training technique in any way.
If they acquired this data without the fraud, you'd have a point.