OpenAI, the company behind ChatGPT, is investigating whether Chinese AI startup DeepSeek used its advanced AI models without authorization to train a competing open-source model.
The DeepSeek breakthrough, which has sent ripples through the global tech market, now has implications for intellectual property protection and national security.
The controversy stems from allegations that DeepSeek may have leveraged a method called “distillation”—a technique where a smaller AI model is trained using outputs generated by a more advanced system. OpenAI told the Financial Times that it had uncovered evidence suggesting DeepSeek may have accessed its model’s outputs to improve its own AI system.
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While OpenAI has not provided full details, concerns are growing that DeepSeek might have used OpenAI’s application programming interface (API) to extract valuable AI knowledge—potentially violating OpenAI’s terms of service.
According to reports from both the Financial Times and Bloomberg, OpenAI and its key backer, Microsoft, are currently investigating whether DeepSeek misused the API to engage in unauthorized model training. The companies had previously identified and blocked multiple accounts suspected of engaging in distillation, a move that was reportedly linked to DeepSeek’s operations.
The use of AI distillation presents a major challenge for leading AI firms, as it enables smaller players to rapidly develop competitive models without the same level of research investment. If DeepSeek did, in fact, extract knowledge from OpenAI’s models, it could mean that China has gained access to cutting-edge AI advancements that took years of research and billions of dollars to develop.
OpenAI’s Legal Battles and Its Next Move Against DeepSeek
While OpenAI has not yet stated what specific actions it will take if it establishes that DeepSeek copied its model, the company’s recent legal history provides a strong indication of how it might respond.
OpenAI is already embroiled in multiple lawsuits, including a major legal battle with the New York Times, which accuses the AI firm of using its content without permission to train ChatGPT. The case has sparked widespread debates about AI ethics, copyright infringement, and fair use in AI training.
Given OpenAI’s aggressive stance on intellectual property rights, it is highly likely that if DeepSeek is found guilty of using its models without authorization, the company could pursue legal action, potentially demanding financial damages or seeking to block DeepSeek’s access to key AI resources.
Moreover, OpenAI is also facing lawsuits from authors, publishers, and software developers, all of whom argue that the company scraped their content without consent to train its generative AI models. The company has pushed back against some of these allegations, but the growing number of lawsuits indicates that OpenAI is willing to fight aggressively to protect its proprietary technology.
If OpenAI can prove that DeepSeek violated its API terms or engaged in unauthorized distillation, the company might seek a legal injunction to halt the use of DeepSeek’s AI models, arguing that they were developed using unfair methods. This could lead to a major legal confrontation between a U.S. tech giant and a rising Chinese AI firm.
The U.S. Government Steps In Over National Security Concerns
The DeepSeek controversy has now caught the attention of the White House, adding another layer to the escalating tensions between the U.S. and China in AI development. White House Press Secretary Karoline Leavitt confirmed that the National Security Council (NSC) is actively reviewing the matter, citing concerns over intellectual property theft and the potential national security risks associated with foreign AI advancements.
“This is a wake-up call to the American AI industry,” Leavitt said, emphasizing that leading AI models represent a strategic advantage for the U.S. and must be protected from unauthorized access and exploitation.
The U.S. government has already been taking steps to limit China’s access to advanced semiconductor technology, including imposing strict export controls on high-performance AI chips from companies like NVIDIA. The growing concerns over AI distillation and model theft may lead to even tighter restrictions on AI knowledge-sharing and cross-border tech collaborations.
DeepSeek’s rapid success and its suspected ties to OpenAI’s proprietary models highlight a larger trend in the AI arms race between the U.S. and China. The two nations are competing fiercely in the development of next-generation AI, with both governments investing billions in research and imposing restrictions to protect their technological advantages.
China has ambitious AI development goals, with companies like Baidu, Alibaba, and DeepSeek working to build AI models that can rival OpenAI, Google DeepMind, and Anthropic. If DeepSeek is found to have extracted knowledge from OpenAI’s systems, it would raise questions about China’s ability to fast-track AI development by leveraging U.S. innovations—a scenario that could further escalate trade tensions between Washington and Beijing.
In the coming months, industry experts expect OpenAI and other leading AI firms to implement tighter security measures, including more robust tracking of API usage, encryption of AI model outputs, and stricter licensing agreements. Meanwhile, U.S. regulators may push for more oversight of foreign AI firms that attempt to compete with American companies.