OpenAI has accused Chinese AI startup DeepSeek of improperly using its proprietary models to develop a competing open-source AI system, potentially violating the company's terms of service.
The controversy centers around a technique called "distillation," where developers use outputs from larger AI models to train smaller ones. While this practice is common in AI development, OpenAI claims DeepSeek crossed boundaries by using it to build a rival commercial model.
DeepSeek's R1 reasoning model has gained attention for achieving results comparable to leading US models while reportedly spending just $5.6 million on development - a fraction of typical industry investments. The model recently topped Apple's App Store charts in multiple countries.
According to Bloomberg, OpenAI and Microsoft investigated and blocked several accounts in August 2023 for suspected terms of service violations, which they now believe were connected to DeepSeek. Both companies have yet to publicly share specific evidence supporting their allegations.
The situation has already impacted markets, with Nvidia seeing its shares drop 17% on Monday as investors questioned whether expensive AI hardware investments might be unnecessary if similar results could be achieved with fewer resources.
White House AI advisor David Sacks commented on the allegations, stating "There's substantial evidence that what DeepSeek did here is they distilled knowledge out of OpenAI models, and I don't think OpenAI is very happy about this."
The case highlights growing concerns over AI intellectual property protection and competitive practices in the rapidly evolving artificial intelligence industry. DeepSeek has not yet publicly responded to these allegations.
US government officials are currently evaluating potential national security implications, while OpenAI emphasizes its commitment to protecting its technology through collaboration with authorities.