The sudden arrival of China’s DeepSeek AI chatbot has thrown the US AI industry into turmoil, causing panic among investors. DeepSeek claims to have developed a chatbot with similar capabilities to OpenAI’s ChatGPT-4, but for a fraction of the cost – just $5.6 million compared to OpenAI’s $100 million.
This has led to a sharp drop in stocks of AI-related companies, with Nvidia losing 17% of its market cap. Now, OpenAI is investigating whether DeepSeek violated its intellectual property in developing its AI model, known as R1.
The issue highlights the growing tensions around copyright and AI development. While OpenAI has defended its use of copyrighted content for training its models, it now finds itself on the other side of the debate as the potential victim of IP theft.
Experts say stopping this kind of “distillation” technique, where a smaller model is trained to mimic a larger one, may be difficult, as it is a common practice in the industry.
