OpenAI raises alarm over AI copying as China’s DeepSeek gains ground

OpenAI has raised concerns that competitors, including Chinese firms, are using its work to accelerate their own AI advancements.

These worries follow the rapid rise of DeepSeek, a Chinese AI model that reportedly matches ChatGPT’s capabilities at a fraction of the cost.

According to reports from Bloomberg and the BBC, Microsoft—OpenAI’s largest investor—is investigating whether OpenAI’s data has been used without authorization. 

The White House is also taking notice. David Sacks, the newly appointed AI and crypto czar, suggested on Fox News that DeepSeek may have engaged in knowledge distillation, a technique that extracts insights from existing AI models to improve new ones.

“There’s substantial evidence that DeepSeek distilled knowledge from OpenAI’s models,” Sacks said, adding that leading US AI firms would likely take steps to prevent such practices.

The US has already imposed export restrictions to limit China’s access to advanced AI chips. However, Howard Lutnick, Trump’s nominee for Commerce Secretary, warned during his confirmation hearing that existing controls may be insufficient. 

“Our export controls, not backed by tariffs, are like a whack-a-mole model,” he said, hinting at further protective measures.

OpenAI released a statement saying Chinese and other companies are “constantly trying to distill the models of leading US AI companies.” The firm emphasized the importance of working with the US government to safeguard cutting-edge AI technologies.

Experts are also questioning whether DeepSeek’s cost-efficient development claims hold up. Naomi Haefner, assistant professor at the University of St. Gallen, pointed out that if DeepSeek leveraged OpenAI’s models, its low-cost claims could be misleading.

“It’s unclear whether DeepSeek trained its model from scratch,” Haefner said. 

“If OpenAI is correct in suggesting that large amounts of its data were misappropriated, the claim of low-cost training is deceptive.”

Meanwhile, Crystal van Oosterom, AI Venture Partner at OpenOcean, acknowledged that DeepSeek had built on publicly available research from US and European institutions. However, she noted that accusations of intellectual property violations are common in AI—even OpenAI itself has faced similar claims.

The potential national security risks of DeepSeek’s rise are also under review. White House press secretary Karoline Leavitt confirmed that the National Security Council is assessing the situation. 

“They are looking into the security implications,” she said, adding that Trump views DeepSeek as a wake-up call for US tech firms.

Amid these concerns, the US Navy has banned its personnel from using DeepSeek’s apps, citing “potential security and ethical concerns” related to the model’s origins and data handling practices. 

Data privacy experts have also warned users about DeepSeek’s data collection practices, as the app reportedly stores large amounts of personal information on servers in China.

In response to mounting scrutiny, DeepSeek claims it has been the target of cyberattacks. The company announced that it would temporarily limit registrations due to “large-scale malicious attacks” on its software.

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