DeepSeek services are being disrupted by massive cyberattacks

Breaking development: Chinese AI company DeepSeek reports experiencing large-scale malicious attacks affecting its services, with Chinese state media claiming these attacks originate from US IP addresses.

Current situation: The disruption comes as DeepSeek’s powerful yet cost-effective AI model has drawn significant attention from Silicon Valley and U.S. government officials.

• A banner on DeepSeek’s website indicates registration issues due to the reported attacks
• This marks the second such attack this week, with state broadcaster CCTV claiming multiple incidents of increasing intensity
• DeepSeek has not responded to requests for comment

White House response: The U.S. National Security Council is investigating DeepSeek amid growing concerns about national security implications.

• The U.S. Navy has reportedly banned staff from using DeepSeek’s app
• White House AI advisor David Sacks suggests DeepSeek may have used knowledge distillation to learn from OpenAI’s models
• OpenAI confirms that foreign companies frequently attempt to distill knowledge from U.S. AI models

Market impact: DeepSeek’s emergence has caused fluctuations in U.S. tech stocks and challenged assumptions about American AI dominance.

• The company’s rise triggered a temporary slump in U.S. tech stocks
• The development comes as Trump announces a $500 billion AI plan involving major U.S. firms
• The situation highlights ongoing competition between U.S. and Chinese tech sectors

Technical context: Knowledge distillation, a process where one AI model learns from another, has emerged as a key point of contention in this situation.

• This technique allows newer AI models to benefit from the capabilities of existing ones
• U.S. companies are expected to implement measures to prevent such knowledge transfer
• Questions remain about DeepSeek’s exact development methods and capabilities

Strategic implications: While the U.S. maintains advantages through its semiconductor industry leadership, DeepSeek’s emergence suggests China’s AI capabilities may be more advanced than previously believed.

• China faces restrictions on accessing high-end chips
• The U.S. still leads in chip manufacturing
• Trump has characterized this as a “wake-up call” while expressing confidence in continued U.S. dominance

Reading between the lines: The DeepSeek situation highlights the increasingly complex nature of AI competition between the U.S. and China, where technological advancement, intellectual property protection, and national security concerns intersect in ways that challenge traditional assumptions about technological superiority.