Microsoft Corp. and OpenAI are investigating whether a group linked to Chinese AI startup DeepSeek obtained data from OpenAI’s technology without authorization.
According to a Blomberg report citing sources familiar with the matter, Microsoft’s security researchers observed individuals they suspect may be linked to DeepSeek extracting a significant amount of data using OpenAI’s application programming interface (API) in late 2024.
The API allows developers to integrate OpenAI’s proprietary AI models into their own applications through a paid license.
Microsoft, OpenAI’s largest investor and technology partner, flagged the suspicious activity to OpenAI.
“If confirmed, such actions could constitute a violation of OpenAI’s terms of service or an attempt to bypass restrictions on data usage,” Bloomberg quoted the sources.
US Government raises security concerns
President Donald Trump’s AI czar, David Sacks, told Fox News on Tuesday that there is “substantial evidence” suggesting DeepSeek leveraged OpenAI’s models to develop its own AI technology.
Sacks referenced a technique called AI distillation, where one AI model is trained using the outputs of another to replicate its capabilities.
“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,” Sacks said, without providing further details.
OpenAI responds to allegations
While OpenAI did not directly comment on DeepSeek, the company acknowledged the ongoing risks posed by AI competitors.
“We know PRC-based companies and others are constantly trying to distill the models of leading US AI companies,” an OpenAI spokesperson said.
The company also emphasized its countermeasures to protect intellectual property, including selective restrictions on releasing its most advanced capabilities.
“As the leading builder of AI, we are working closely with the US government to ensure that the most capable AI models remain protected from adversaries and competitors,” OpenAI added.
DeepSeek’s AI disrupting the market
DeepSeek, a rising Chinese AI company, recently released its open-source AI model, DeepSeek-R1, which it claims rivals or outperforms major US-developed AI models, including those from OpenAI, Google, and Meta.
- The company also asserts that R1 was developed at a fraction of the cost typically required for high-performance AI models.
- DeepSeek’s rapid ascent and claims of AI superiority have unsettled Silicon Valley, triggering concerns over potential IP theft and China’s ability to circumvent US restrictions on AI development.
- On Monday, the emergence of DeepSeek sent shockwaves through global tech markets, wiping out nearly $1 trillion in market value from major AI-linked companies, including Microsoft, Nvidia, Oracle, and Alphabet (Google’s parent company).
- The investigation launched by Microsoft and OpenAI highlights the growing US-China tensions in artificial intelligence, particularly as Washington tightens export restrictions on advanced AI chips.
While US policymakers seek to maintain their dominance in AI, Chinese firms like DeepSeek are demonstrating their ability to innovate, potentially reshaping global AI leadership.
