Microsoft Probing If DeepSeek Improperly Used OpenAI Model, Report Says

Bloomberg is reporting that Microsoft (MSFT) and OpenAI are investigating whether a group linked to Chinese startup DeepSeek used improperly obtained data from the U.S. artificial intelligence (AI) company to launch the low-cost AI model that sparked a selloff Monday.

Investopedia has not independently confirmed the investigation. OpenAI didn’t immediately respond a request for comment. Microsoft declined to comment.

DeepSeek earlier this month released its super-efficient R1 model at a fraction of the cost of AI models of U.S. rivals like OpenAI, which is backed by Microsoft, Alphabet’s (GOOGL) and Meta Platforms (META). The Chinese firm said its R1 model offers performance that is on par with that of OpenAI’s ChatGPT.

AI Czar Sacks Says DeepSeek May Have Used OpenAI Model

The Bloomberg report follows an interview given by President Donald Trump’s “AI and Crypto Czar” David Sacks on Fox saying that there’s “substantial evidence” that DeepSeek used the “distillation|” technique to get data from OpenAI’s AI models.

“They can suck the model out of the parent model,” Sacks said, though he didn’t provide evidence. 

Nvidia in a statement Tuesday called DeepSeek “an excellent AI advancement,” calling it a “perfect example” of a concept known as test time scaling.