OpenAI, the creator of ChatGPT, has raised concerns that rivals, particularly in China, are utilizing its AI research and models to make rapid strides in artificial intelligence development. The latest controversy emerged following the unexpected rise of DeepSeek, a Chinese AI application that claims to match ChatGPT’s capabilities at a fraction of the cost.

Key Highlights:

• OpenAI claims that Chinese AI companies, including DeepSeek, are leveraging its research to accelerate their AI advancements.
• Bloomberg reports that Microsoft is investigating potential unauthorized use of OpenAI’s data.
• The U.S. government is evaluating potential national security risks associated with DeepSeek’s emergence.
• The U.S. Navy has reportedly banned its personnel from using DeepSeek’s applications due to security concerns.

Bloomberg has reported that Microsoft, OpenAI’s key investor and partner, is investigating whether OpenAI’s data has been accessed or used without authorization.

David Sacks, the White House’s newly appointed AI and crypto advisor, echoed OpenAI’s concerns. Speaking on Fox News, he suggested that DeepSeek may have engaged in knowledge distillation—a process of extracting intelligence from existing AI models to improve new ones.

“There’s substantial evidence that what DeepSeek did here is they distilled the knowledge out of OpenAI’s models,” Sacks stated. “Over the next few months, leading AI companies will likely take steps to prevent distillation, which could slow down copycat models.”

The U.S. government has already implemented measures to protect its AI advancements, including restrictions on China’s access to advanced semiconductor chips. Howard Lutnick, Trump’s nominee for Commerce Secretary, suggested that additional measures might be necessary to safeguard American AI technology.

“What this showed is that our export controls, not backed by tariffs, are like a whack-a-mole model,” Lutnick said at his confirmation hearing.

In a statement, OpenAI accused Chinese and other foreign companies of persistently attempting to distill the models developed by leading U.S. AI firms. OpenAI stressed the importance of working closely with the U.S. government to ensure the protection of top-tier AI models.

DeepSeek’s AI Breakthrough: Too Good to Be True?

DeepSeek, a Hangzhou-based AI firm linked to hedge fund High-Flyer, has gained significant attention after claiming it developed its R1 large language model in just two months with an investment of under $6 million. The claim has sparked skepticism among experts.

Naomi Haefner, assistant professor of technology management at the University of St. Gallen, Switzerland, questioned whether DeepSeek truly developed its model independently.

“It is unclear whether DeepSeek really trained its models from scratch,” she said. “If OpenAI’s allegations hold true, then the claims about training the model very cheaply may be misleading. Until someone replicates their approach, we won’t know for sure whether such cost-efficient training is truly feasible.”

Crystal van Oosterom, AI Venture Partner at OpenOcean, agreed that DeepSeek likely built upon existing research from major American and European AI institutions. However, she pointed out that AI development frequently involves using prior research, making the debate over intellectual property a complex issue.

Security and Ethical Concerns

The U.S. government is actively assessing the national security risks associated with DeepSeek’s rise. White House press secretary Karoline Leavitt confirmed that the National Security Council is investigating potential implications.

“I spoke with the NSC this morning, and they are evaluating what security risks may arise from DeepSeek’s technology,” Leavitt said. President Trump has also warned that DeepSeek should serve as a wake-up call for the U.S. tech industry.

Meanwhile, CNBC has reported that the U.S. Navy has banned its personnel from using DeepSeek’s applications due to concerns over security and ethics. An internal email allegedly advised Navy staff against using the app due to “potential security and ethical concerns associated with the model’s origin and usage.”

As OpenAI and other U.S. tech leaders grapple with rising competition from China, the debate over AI intellectual property rights and national security is expected to intensify in the coming months. The broader implications of these developments will shape the future of AI governance, international collaboration, and technological supremacy.