The developers of ChatGPT have voiced concerns that China's DeepSeek AI models, which are notably affordable, may have been developed using data from OpenAI. This week, former President Donald Trump labeled DeepSeek as a "wake-up call" for the U.S. tech industry, especially after Nvidia experienced a staggering $600 billion drop in market value.

The launch of DeepSeek triggered a sharp decline in the stocks of companies deeply involved in artificial intelligence. Nvidia, a leader in the GPU market essential for AI operations, suffered a historic 16.86% drop in its shares, marking the largest single-day loss ever recorded on Wall Street. Other tech giants like Microsoft, Meta Platforms, and Google's parent company Alphabet saw their stocks decrease by between 2.1% and 4.2%, while AI server manufacturer Dell Technologies experienced an 8.7% decline.

DeepSeek touts its R1 model as a cost-effective alternative to Western AI solutions like ChatGPT. Built on the open-source DeepSeek-V3, it reportedly demands less computational power and is said to have been trained at a cost of just $6 million. Despite some skepticism about these claims, DeepSeek has sparked concerns about the massive investments U.S. tech firms are making in AI, causing investor unease. The app's effectiveness has driven it to the top of the U.S. free app download charts.

Bloomberg has revealed that OpenAI and Microsoft are investigating whether DeepSeek utilized OpenAI's API to incorporate OpenAI's AI models into its own. OpenAI has acknowledged to Bloomberg that Chinese companies, among others, are frequently attempting to "distill" the models of leading U.S. AI companies, a practice that violates OpenAI's terms of service. Distillation involves training AI models by extracting data from larger, more advanced models.

OpenAI emphasized its commitment to protecting its intellectual property through various countermeasures and stressed the importance of collaborating with the U.S. government to safeguard advanced AI models from adversaries and competitors. David Sacks, Trump's AI czar, told Fox News that there is significant evidence suggesting DeepSeek used distillation to extract knowledge from OpenAI's models, a move that has likely irked OpenAI. Sacks predicts that U.S. AI leaders will soon implement measures to prevent such distillation.

Observers have noted the irony of OpenAI's situation, given its own history of using internet data to develop ChatGPT. Tech PR and writer Ed Zitron humorously pointed out OpenAI's hypocrisy in complaining about DeepSeek potentially training on ChatGPT's outputs, considering OpenAI's reliance on copyrighted material for its own model training.

In January 2024, OpenAI argued in a submission to the UK's House of Lords that it is "impossible" to create AI tools like ChatGPT without using copyrighted material. They emphasized that since copyright covers almost all forms of human expression, training AI models without such materials would be impractical and unable to meet modern needs.

The use of copyrighted materials in AI training has become a contentious issue in the tech industry, especially with the rise of generative AI. In December 2023, the New York Times filed a lawsuit against OpenAI and Microsoft for the "unlawful use" of its work. OpenAI defended its practices as "fair use" and dismissed the lawsuit as baseless, highlighting its partnerships with news organizations and support for journalism.

This legal action followed a September 2023 lawsuit by 17 authors, including George R. R. Martin, who accused OpenAI of "systematic theft on a mass scale." Additionally, in August 2023, District Judge Beryl Howell supported a U.S. Copyright Office ruling from 2018 that AI-generated art cannot be copyrighted, emphasizing the necessity of human creativity for copyright eligibility.