>Labs can just step up the way they track signs of prompts meant for model distillation. Distillation requires a fairly large number of prompt/response tuples, and I am quite certain that all of the main labs have the capability to detect and impede that type of use if they put their backs into it.

....while degrading their service for paying customers.

This is the same problem as law-enforcement-agency forwarding threats and training LLMs to avoid user-harm -- it's great if it works as intended, but more often than not it throws a lot more prompt cancellations at actual users by mistake, refuses queries erroneously -- and just ruins user experience.

i'm not convinced any of the groups can avoid distillation without ruining customer experience.