Allow U.S. Labs to Distill Frontier Models

Policy could permit regulated domestic distillation—training open or smaller models using outputs from proprietary frontier AIs—to deliberately cultivate non‑Chinese open‑weight alternatives and preserve competitive pluralism while keeping frontier providers' price premium. Proponents argue this balances access, innovation, and monopoly risk; opponents point to IP, safety, and national‑security harms and want enforcement against foreign distillers. — This reframes distillation from a purely illicit circumvention technique into a potential industrial policy lever with geopolitical, competition, and safety trade‑offs.