OpenAI suspects that China's DeepSeek AI models, significantly cheaper than Western counterparts, may have been built using OpenAI's data. This revelation, following the substantial drop in Nvidia's market value (nearly $600 billion), prompted Donald Trump to call DeepSeek a "wake-up call" for the U.S. tech industry.

The emergence of DeepSeek triggered a sharp decline in AI-related stocks. Nvidia, a major player in GPU technology crucial for AI model operation, experienced a 16.86% share drop – a record on Wall Street. Other tech giants like Microsoft, Meta, and Alphabet also saw significant losses.

DeepSeek's R1 model, based on the open-source DeepSeek-V3, boasts significantly lower training costs (estimated at $6 million) compared to Western models like ChatGPT. While this claim is debated, it has raised concerns about the billions invested by American tech companies in AI, unsettling investors. DeepSeek's popularity, evidenced by its top ranking on U.S. free app download charts, further fuels this discussion.

OpenAI and Microsoft are investigating whether DeepSeek used OpenAI's API to integrate OpenAI's AI models into its own, a violation of OpenAI's terms of service. OpenAI acknowledges that Chinese companies frequently attempt to "distill" models from leading U.S. AI companies. Distillation, a technique for training AI models by extracting data from larger models, is a key point of contention.

OpenAI emphasizes its efforts to protect its intellectual property and is collaborating with the U.S. government to safeguard its technology. David Sacks, President Trump's AI czar, supports the claim that DeepSeek used distillation, a practice he expects will be addressed by leading AI companies.

The situation highlights the irony of OpenAI's position, given its own past accusations of using copyrighted internet data to train ChatGPT. Critics point to OpenAI's previous statements that creating AI models like ChatGPT without copyrighted material is "impossible," as evidenced by their submission to the UK's House of Lords and their ongoing legal battles, including a lawsuit from the New York Times for "unlawful use" of its content. Other lawsuits, such as one filed by 17 authors, further complicate the issue. The legal landscape surrounding AI training data and copyright remains highly contested.