How Model Distillation Actually Works (and What the 'China Distilled Our Model' Headlines Really Mean)

Every few weeks a headline drops: "Chinese lab distilled a frontier model from OpenAI / Anthropic." Cue the comments — half the thread thinks distillation is a synonym for theft, the other half thinks it's some exotic Chinese trick. Both are wrong. Distillation is one of the most boring, well-established techniques in deep learning, and the labs raising the alarms use it on their own models constantly. The actual controversy is narrower and more interesting than the headlines. Let's separate th...