Protecting Our Edge: Trade Secrets and the Global AI Arms Race
2025-05-07
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Source: Congress.gov
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The subcommittee will come to order. Without objection, the chair is authorized to declare a recess at any time. We welcome today our guest for a hearing on trade secrets in the global AI arms race. I now recognize myself for a short opening statement. Today's hearing addresses the core tension in the age of artificial intelligence. the push for disclosure balanced with the need to protect innovation that drive US leadership. There's a non-disclosure on the phone. The proprietary algorithms that in fact train data sets are likely to be, now and in the future, the secret sauce. Not patented, not available to the public, but of such value that other nefarious actors will do anything to get them. Without strong protections, we risk sacrificing the very breakthroughs we aim to encourage. Some have called the sweeping AI disclosure mandates in the name of transparency. This committee has strongly believed and will continue to believe in transparency. But like anything else, a protective order is just a promise, and a promise that is historically not kept, in fact, has no value. We cannot require disclosure of trade secrets or proprietary data sets under the guise of transparency. Such disclosures would not only have a chilling effect on innovation, but hand strategic advantage to foreign adversaries who do not play by the same rules. Consider this. The United States' investment in AI is approaching a trillion dollars. China has invested not more than one third as much and is already neck to neck with the United States.
Deep Seek and other Chinese models are rapidly catching up to American companies. But let's look deeper. DeepSeq contains models that clearly were taken from OpenAI and other sets. We know China's speed is not merely because they invest in innovation. It is also the result of IP theft, reverse engineering, efforts to circumvent US expert controls, and more. China has also weaponized our legal system by financing lawsuits that target American firms in expensive litigation, and with the intent in many cases to mine that proprietary information. All the while, China continues to refuse meaningful protections on USIP in its own courts. I personally have been part of that recognition that they will not defend trademarks, patents, even when you go to the expense of getting them in China. Even if you make your product in China, you will not be protected. Lastly, American companies have a reverse situation, one in which we are working constantly, and this committee has worked tirelessly on a bipartisan basis, to promote rocket dockets, to in fact get the speed of decision to the lowest cost and the quickest time. Well, in China, you can be assured if you're an American company asserting your rights, you will go into the never never land of your case will come up someday. Efforts continue to include the need to prevent US engineers with access to specific sensitive AI systems from sidestepping non-competes and NDAs by working for Chinese firms. ensure the disclosure of regimes do not inadvertently reveal protection by mirroring EU-style regulations.
And I might say here, a little off the record, EU, as we speak, is second-guessing their very disclosures. It has not escaped us that the AI Act of Europe in fact, was a great step forward. And as we speak, many are pushing to take at least a small step backwards. And with that, I'm delighted to introduce my ranking member for his opening statement. Thank you, Mr. Chairman.
117 days ago, Chinese company DeepSeek launched its flagship model, DeepSix R01. In the following days and weeks, American experts wrung their hands and shook their heads, many considering for the first time the possibility that we may be losing the so-called AI arms race. DeepSeek claims R01 was developed faster and cheaper than comparable U.S. models. Others argue DeepSeek, at a minimum, violated OpenAI's terms of service to obtain proprietary training data. Where everyone seems to agree is that AI startups should be innovating faster I've heard colleagues suggest we should forget regulations, ignore IP laws, and just focus on clearing the way for AI companies. I agree everyone wins when we foster American AI startups, but I think it's a false choice to say we can succeed only if we do so irresponsibly. Excuse me. If you walk around the Capitol today, you can see plants sprouting out of the soil beginning to grow.
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