China's systematic theft of American technology has already cost tens of trillions of dollars and could determine whether the United States maintains its competitive edge in artificial intelligence, according to a new analysis by Derek Scissors, senior fellow at the American Enterprise Institute, published June 29, 2026. The report argues that decades of inaction by successive U.S. administrations have allowed China to steal everything from basic consumer goods to transformative AI capabilities, fundamentally altering the global economic balance. Scissors warns that without treating technology theft as criminal activity warranting serious consequences, America is "letting China steal away our future."
The report traces technology theft spanning more than 30 years, starting with simple "copy watches" and progressing to sophisticated AI systems. China's cumulative GDP over the past 30 years exceeds $225 trillion, with recent years weighted toward a larger, more technologically advanced economy that's competitive worldwide. The analysis estimates that without coercive acquisition of foreign technology, China would be years behind its current capabilities—roughly at its 2019 technology level. In the 2000s, China stole core telecom technology from multiple firms, enabling Huawei's rise while Motorola became a minor Chinese subsidiary, Lucent died, and Nortel was plundered into extinction. Recent incidents include Anthropic accusing Alibaba in the past week of illicitly extracting AI capabilities by training its inferior model on Anthropic's superior model, OpenAI making similar claims about DeepSeek in February, and both a White House memo in April and a bipartisan House committee report documenting Chinese AI theft in detail.
The report places blame across the political spectrum and multiple presidencies. "President Trump has been weak on China for so long that it's tempting to say he's solely at fault. But it goes far beyond him," Scissors writes, noting that Presidents Obama, Bush, and Clinton also failed to address the issue meaningfully. According to the analysis, the Trump administration's current policies include "letting China continue to leach American AI advances" and "selling China more advanced semiconductors to run their illicitly built models on," despite repeatedly insisting the U.S. must outcompete China in commercial AI. The report states that Obama's approach was to negotiate a deal with Xi Jinping promising no more cybertheft of intellectual property—an agreement that proved "remarkably foolish." American business shares responsibility, the report finds, wanting Chinese technology theft to stop "but please don't do anything to make China angry."
Scissors argues that China continues stealing because it's been "a gigantic, world-changing success" with no meaningful consequences for over three decades. The report explains that China couldn't have reached its current size and technological competitiveness so quickly without unprecedented coercive acquisition of foreign technology. The cumulative economic advantage runs into the tens of trillions because China's economy is now larger and more technologically sophisticated than it would have been without stolen intellectual property. U.S. responses have evolved only from "thinking more rounds of talks with no teeth will do the trick to thinking more list of bad actors with no teeth will do the trick," according to the report. This pattern of inaction means China rolls out decent-to-good systems while spending much less than American companies, then becomes more competitive as a result.
The report calls for treating Chinese technology theft as criminal activity that harms America, recommending that if companies like Alibaba or DeepSeek are indeed stealing American AI technology, "all their commercial activity in the US and around the world should be treated by us as illicit." Scissors acknowledges this won't happen, noting that modest first steps can't pass Congress due to White House opposition, and even if Congress acted, the executive branch would likely ignore new laws as it has done before concerning China. The bottom line is stark: if AI proves vital to the 21st century economy and security, then China is robbing the United States in real time while America watches—and one thing has already been transformative, whether AI ultimately is or not.