Microsoft and ChatGPT-creator OpenAI are investigating DeepSeek as US officials allege potential IP theft.
Key Highlights
- Sam Altman-led OpenAI joins Microsoft to scrutinize potential unauthorized data access orchestrated by DeepSeek-linked people via the OpenAI’s API.
- DeepSeek AI assistant flipped ChatGPT to the top spot on Apple’s App Store as it eroded $600B value of Nvidia stock value.
- The US officials led by President Trump’s nominee for Commerce Secretary Howard Lutnick allege DeepSeek orchestrated IP theft.
- US Navy prohibited personnel from utilizing the DeepSeek technology, alleging vulnerability to security risk.
- Italian authorities issue a 20-day window for DeepSeek to elaborate on their data collection and storage.
The AI landscape encountered aggravated turbulence when Chinese startup DeepSeek unveiled a less costly yet capable product to OpenAI’s ChatGPT. According to Bloomberg News, the product has already courted controversy, with OpenAI and Microsoft launching scrutiny into suspected unauthorized data collection by individuals linked to DeepSeek.
DeepSeek Under Scrutiny
The investigation arises from events witnessed in last year’s fall when the security researchers spotted large amounts of data extraction by individuals reportedly linked to DeepSeek. The unauthorized access occurred through OpenAI’s API, the primary channel through which business customers and developers could access Sam Altman-led OpenAI’s services.
The situation is attracting additional attention with the news of the free AI assistant by DeepSeek overtaking OpenAI’s ChatGPT on Apple’s App Store. The revelation triggered a momentous market reaction, leading to a massive tech stock selloff. The selloff hit Nvidia hard, erasing a $600 billion value from its market capitalization.
The nominee for the Commerce Secretary, Howard Lutnick, leveled direct accusations against DeepSeek during his Senate hearing. He observed that the DeepSeek actors broke in, stole, and took over the IP. He joined the broader concerns within the government that Chinese companies potentially misappropriated American technology.
The newly appointed crypto and AI czar in the Trump administration, David Sacks, backed the allegations. He informed Fox News of substantial evidence that DeepSeek leveraged distillation techniques in extracting knowledge from existing OpenAI models, thereby contravening the service terms.
Preemptive Action to Eliminate DeepSeek Threats
The California-headquartered OpenAI waded into the latest developments in a measured revelation admitting the ongoing attempts by Chinese entities to replicate the American AI models. OpenAI reiterated the commitment to safeguard intellectual property, including careful control over the capabilities of the released models.
The US deployed a preemptive action by banning the personnel from utilizing DeepSeek’s technology. The military ban is premised on ethical and security concerns owing to its origin and utilization in the email to the troops.
The scrutiny extends beyond the US borders, with Italian regulators issuing a 20-day deadline to furnish the authorities with detailed clarification on data collection, AI training approach, and storage practices. It is worth mentioning that the Italian regulator sought this information despite its availability within DeepSeek’s Privacy Policy.
Tech Sector Response to DeepSeek Controversy
The DeepSeek controversy sparked debate, with Perplexity’s chief executive Aravind Srinivas, issuing a technical view indicating that China’s firm success arose from innovative reinforcement learning and not simply imitating.
Veteran hedge fund manager Bill Ackman questioned the timing of the technology, citing potential market manipulation. He indicated that a hedge fund affiliated with DeepSeek likely profited from the downtrend via strategic options trading.
The tech community weighed into the issue, citing the broader implications. Some pointed to the irony in OpenAI’s complaints about potential unauthorized data usage. They indicated that OpenAI received similar criticism for their training practices.
Edward Zitron profiled the controversy as symptomatic of the underlying issues within the American tech sector. He suggested that the accusations against DeepSeek could conceal the underlying challenges affecting competitiveness and innovation in the US tech sector.
DeepSeek has yet to respond to the controversial claims despite multiple requests. The latest development triggered a statement from OpenAI confirming a review to ascertain whether DeepSeek inappropriately distilled its models.
