ChatGPT Maker Suspects China’s Dirt Cheap DeepSeek AI Models Were Built Using OpenAI Data — and the Irony Is Not Lost on the Internet

OpenAI suspects that DeepSeek, a Chinese AI model significantly cheaper than Western counterparts, may have been trained using OpenAI's data. This revelation, coupled with DeepSeek's rapid rise in popularity, triggered a market downturn for major AI companies. Nvidia, a key player in GPU technology crucial for AI model development, experienced its largest-ever single-day stock loss, shedding nearly $600 billion in market value. Other companies like Microsoft, Meta, Alphabet, and Dell also saw significant declines.

DeepSeek's R1 model is marketed as a cost-effective alternative to ChatGPT, reportedly trained for a mere $6 million using the open-source DeepSeek-V3. While the cost claim is debated, the incident has raised concerns about the billions invested in AI by American tech giants, causing investor apprehension. DeepSeek's success in the U.S. app download charts further underscores this concern.

OpenAI and Microsoft are investigating whether DeepSeek violated OpenAI's terms of service by employing a technique called "distillation" – extracting data from larger models to train smaller ones. OpenAI confirmed its awareness of such attempts by Chinese and other companies to replicate leading U.S. AI models and stated its commitment to protecting its intellectual property, including collaboration with the U.S. government.

David Sacks, President Trump's AI advisor, supports the claim that DeepSeek used OpenAI's models, anticipating countermeasures from leading AI companies to prevent similar actions.

This situation highlights the irony of OpenAI's position, given its own past controversies. OpenAI previously argued that creating AI models like ChatGPT is impossible without using copyrighted material, a stance supported by their submission to the UK's House of Lords. This justification has been challenged by lawsuits from the New York Times and 17 authors alleging copyright infringement. OpenAI maintains that its training practices constitute "fair use." The ongoing legal battles and the DeepSeek incident underscore the complex and evolving legal landscape surrounding AI development and copyright.