Microsoft to investigate DeepSeek and has opened an investigation into the possibility of DeepSeek making use of OpenAI’s application programming interface (API) for its model development.
The probe comes a few hours following claims by Trump’s AI and crypto “czar”, David Sacks that the Chinese company used OpenAI’s models to train its own models.
In a Bloomberg Law report, security researchers working for Microsoft expressed that DeepSeek may have copied a large amount of data belonging to OpenAI’s API. Microsoft, a big investor in OpenAI, had earlier notified the ChatGPT owner of the suspected activity.
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In the company’s terms of use, it stressed that users can’t use OpenAI’s API output to train a new AI model even though anyone can sign up and access the model.
“You are prohibited from using Output to develop models that compete with OpenAI,” the company writes in its terms of use. The company added that users cannot “automatically or programmatically [extract] data or Output.”
In an interview with Fox on Tuesday, David Sack expressed that there’s “substantial evidence” that Chinese AI company DeepSeek “distilled” knowledge from OpenAI’s AI models where he tagged the process as theft.
Though Sacks didn’t cite the source of this “evidence,” he claimed that DeepSeek used responses from OpenAI models to train its own. “I don’t think OpenAI is very happy about this,” Sacks expressed.
After going viral over the past few days, DeepSeek has been under scrutiny by U.S. government officials. The National Security Council, the U.S. body that advises the president on foreign policy and national security, is currently reviewing the implications of DeepSeek’s apps, which topped the Apple App Store, according to Reuters.
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Also, the U.S. Navy has banned the use of DeepSeek’s AI after citing “potential security and ethical concerns.”
Experts have suggested that the core issue seems to come from distillation, a method used by AI model developers to extract knowledge from another model using a teacher-student sort of behaviour and the reason Microsoft to investigate DeepSeek.
If DeepSeek has found innovative ways to circumvent OpenAI’s rate limits and query its API at scale, there will certainly be legal ramifications.
DeepSeek’s effect and why Microsoft to investigate DeepSeek
The recent launch of DeepSeek, an open-source AI model by a Chinese startup has intensified pressures in the tech industry over the past few days.
The AI became the talk of the tech world when it released its R1 model on Friday. R1’s functionality and accuracy compared to its U.S. counterparts seems like a win for the overall AI industry, despite using fewer resources and less computing power.
It has also made waves with the recent launch of its R1 chatbot, which quickly surged to the top of global app download charts over the weekend.
A statement from Nvidia qualified DeepSeek as an excellent AI advancement and a perfect example of Test Time Scaling.
“DeepSeek’s work illustrates how new models can be created using that technique, leveraging widely available models and computing that is fully export control compliant. Inference requires significant numbers of Nvidia GPUs and high-performance networking. We now have three scaling laws: pre-training and post-training, which continue, and new test-time scaling,” Nvidia said.
The AI chatbot’s streamlined and cost-efficient approach to AI development stands in stark contrast to the capital-intensive strategies dominating Silicon Valley.
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DeepSeek’s release impacted the AI world with major chip-making company, Nvidia seeing its stock slip 16.9 per cent from the close of Friday’s markets to that of Monday, It lost nearly $600 billion off of its market cap.
The rise of Chinese open-source startup has also affected some of the world’s wealthiest individuals. Oracle co-founder Larry Ellison, Nvidia Corp.’s co-founder Jensen Huang, and others lost a combined $108 billion following Monday’s hit.
DeepSeek, founded in May 2023 by Liang Wenfeng, is a prominent figure in both the hedge fund and AI sectors, the company’s innovative approach to AI development has captured the world’s attention.
The startup’s cutting-edge large language models (LLMs), combined with its disruptive pricing strategy, have reshaped the AI landscape and drawn comparisons to leading players like OpenAI.
Despite being relatively new, DeepSeek’s journey began with the release of DeepSeek Coder in November 2023, a product that marked its entry into the competitive AI market.