OpenAI vs. DeepSeek: AI Model Theft Accusations Spark Industry Debate

The artificial intelligence (AI) sector is facing a new intellectual property (IP) battle after OpenAI accused “Chinese AI startup DeepSeek” of illegally using its proprietary models to train a competing open-source system.

The allegations, which center around the practice of “AI distillation”, highlight growing tensions in the AI arms race between the U.S. and China.

“What is AI Distillation?”

Distillation is a well-known technique in AI development that allows smaller models to “learn from the outputs of larger models”, effectively mimicking their capabilities at a much lower cost.

While OpenAI permits controlled use of this process through its own APIs, its “terms of service explicitly prohibit using model outputs to create a competing AI system”.

According to OpenAI, DeepSeek may have violated this policy by training its “R1 reasoning model” on GPT-4 outputs, allowing it to achieve performance levels comparable to top-tier AI systems while using significantly fewer computing resources.

“DeepSeek’s Rapid Rise Raises Eyebrows”

DeepSeek, a relatively new player in the AI space, has shocked industry observers by developing “high-performing models with minimal hardware investment”. The company’s “V3 model, which boasts 671 billion parameters”, was reportedly trained using just “2,048 Nvidia H800 GPUs and $5.6 million” a fraction of the cost incurred by OpenAI or Google.

DeepSeek’s models have demonstrated capabilities similar to “GPT-4 and Gemini”, raising suspicions that its training data may have included OpenAI-generated content. AI experts pointed out that certain responses from DeepSeek’s models “closely resemble ChatGPT outputs”, indicating potential distillation from OpenAI’s models.

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“U.S. National Security Concerns”

The controversy has attracted the attention of “White House AI advisor David Sacks”, who suggested that “DeepSeek may have engaged in AI-based intellectual property theft”. In an interview with “Fox News”, Sacks explained:

“There’s substantial evidence that what DeepSeek did here is they distilled the knowledge out of OpenAI models. OpenAI is not happy about this, and I suspect we’ll see more measures taken to prevent this from happening in the future.”

This accusation comes at a time when U.S.-China tensions in AI development are escalating. The Biden and Trump administrations have both expressed concerns about Chinese AI companies “gaining an edge by leveraging U.S. advancements”.

OpenAI has stated that it is “working closely with the U.S. government” to safeguard American AI technology from foreign competitors.

“Industry Perspective: Is AI Distillation Theft or Common Practice?”

Despite OpenAI’s allegations, many industry insiders argue that AI distillation is “a widely used technique” in both academia and startups.

> “It’s very common for AI labs to use outputs from top models like GPT-4 to train their own systems,” said Ritwik Gupta, an AI researcher at the University of California, Berkeley.
> “While it raises ethical concerns, enforcing bans on distillation is incredibly difficult.”

Indeed, OpenAI itself has faced lawsuits from “The New York Times and other publishers” for allegedly using copyrighted content to train its own AI models. This raises the question: “If OpenAI trained on publicly available data without permission, does it have the moral authority to restrict others from doing the same?”

“The Battle for AI Supremacy”

The DeepSeek controversy underscores a broader challenge for companies like OpenAI, Google, and Meta: “How do they protect their models when AI research is increasingly open-source?”

Chinese AI firm ‘DeepSeek’ has proven highly efficient at developing “cost-effective methods to train competitive models”, often making up for hardware shortages with innovative techniques.

This has “lowered the cost barrier for AI development”, making it easier for smaller firms to compete with industry giants.

However, if companies like DeepSeek continue leveraging “Western AI advancements without repercussions”, OpenAI and other U.S. firms may push for stricter legal protections or government interventions to safeguard their intellectual property.

For now, OpenAI’s accusations remain unproven, and DeepSeek has not officially responded. But as the AI arms race accelerates, the “battle over training data, model ownership, and ethical AI development” is just beginning.

(Heads Up: This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.)