The firing of U.S. Copyright Office head Shira Perlmutter, just one day after her agency found AI companies in breach of copyright laws, has ignited a firestorm in Washington. While speculation swirls about political motives, including potential favors for Elon Musk, the real long-term threat lies elsewhere: China's aggressive exploitation of American intellectual property (IP) and its AI ambitions.
Perlmutter's office released a draft report highlighting how companies like Google, Meta, Microsoft, and OpenAI have trained generative AI models using vast amounts of copyrighted content, often without proper consent or compensation. The report concluded that such practices exceed the limits of fair use, especially when used for commercial purposes that directly compete with original works.
The legal implications are severe. Experts called it “devastating” for AI firms facing ongoing lawsuits. Yet, within 24 hours, Perlmutter was removed from her position, raising concerns about political interference and the tech industry's influence on policymaking.
But while domestic debates dominate headlines, China watches—and learns.
For decades, China has systematically copied, appropriated, and reverse-engineered foreign intellectual property to fuel its rapid technological rise. From semiconductors to AI algorithms, Beijing has prioritized tech self-reliance, often built on the foundation of foreign innovation obtained through cyber espionage, forced technology transfers, or lax enforcement of IP rights.
As American companies face legal scrutiny and policy gridlock, Chinese firms like Baidu, Tencent, and Alibaba continue advancing their AI models, frequently using global data with little regard for copyright norms. Unlike U.S. firms, Chinese companies operate under a government that not only tolerates but strategically benefits from IP theft.
The danger is twofold:
Ironically, while U.S. regulators and companies clash over AI copyright, China is quietly accelerating its AI dominance, using the very methods the U.S. now seeks to regulate domestically. Every delay in enforcing robust copyright protections gives Beijing more time to close the innovation gap—at America's expense.
The Perlmutter firing may reflect partisan struggles over diversity policies or donor influence, but it also signals a dangerous lack of focus. While the U.S. dithers, China is turning stolen intellectual property into strategic weapons of influence, economic leverage, and global power projection.
If Washington fails to protect American IP from foreign exploitation, the result will not just be corporate losses—it will be a national security failure. China’s disregard for copyright is not an abstract issue of fairness; it’s an economic and geopolitical threat.
The U.S. must refocus on the bigger picture:
The firing of a copyright official is a headline. The erosion of American IP leadership by Chinese exploitation is the real crisis.
