back
Get SIGNAL/NOISE in your inbox daily

ChatGPT maker OpenAI is investigating Chinese AI startup DeepSeek for potentially misusing data from its models to create a competing AI assistant.

Core investigation details; OpenAI is reviewing evidence that DeepSeek may have used a technique called distillation to transfer knowledge from OpenAI’s models to its own smaller model.

  • Distillation is a legitimate technique that transfers knowledge between AI models without exposing their inner workings
  • While distillation itself is permitted, OpenAI’s terms of service prohibit using distilled data to build competing AI products
  • OpenAI is working with the U.S. government to protect advanced AI models developed in the United States

Market impact and competition; DeepSeek’s R1 open-source reasoning model has quickly gained prominence in the AI industry since its recent launch.

  • DeepSeek claims its model performs similarly to OpenAI’s latest version but cost only $5.6 million to develop
  • The Chinese startup’s app has surpassed ChatGPT to become the top-ranked AI application on Apple’s App Store
  • Microsoft, OpenAI’s major partner, is conducting its own investigation after detecting suspicious data extraction patterns

Government and regulatory concerns; U.S. officials have expressed serious concerns about DeepSeek’s practices and their implications for American technology leadership.

  • White House AI advisor David Sacks stated there is “substantial evidence” of DeepSeek using distillation on OpenAI’s models
  • Commerce Secretary nominee Howard Lutnick accused DeepSeek of violating U.S. export restrictions on chips
  • Lutnick criticized open platforms like Meta for enabling DeepSeek’s development and called for stricter controls

Security implications; The situation highlights growing tensions between U.S. and Chinese AI development and raises questions about intellectual property protection in the AI industry.

  • OpenAI emphasizes that Chinese groups are actively working to replicate advanced U.S. AI models
  • The company is implementing “aggressive, proactive countermeasures” to protect its technology
  • The incident may lead to increased scrutiny of international AI development and data access policies

Looking ahead: This investigation could prompt significant changes in how AI companies protect their intellectual property and may influence future regulations governing international AI development and competition.

Recent Stories

Oct 17, 2025

DOE fusion roadmap targets 2030s commercial deployment as AI drives $9B investment

The Department of Energy has released a new roadmap targeting commercial-scale fusion power deployment by the mid-2030s, though the plan lacks specific funding commitments and relies on scientific breakthroughs that have eluded researchers for decades. The strategy emphasizes public-private partnerships and positions AI as both a research tool and motivation for developing fusion energy to meet data centers' growing electricity demands. The big picture: The DOE's roadmap aims to "deliver the public infrastructure that supports the fusion private sector scale up in the 2030s," but acknowledges it cannot commit to specific funding levels and remains subject to Congressional appropriations. Why...

Oct 17, 2025

Tying it all together: Credo’s purple cables power the $4B AI data center boom

Credo, a Silicon Valley semiconductor company specializing in data center cables and chips, has seen its stock price more than double this year to $143.61, following a 245% surge in 2024. The company's signature purple cables, which cost between $300-$500 each, have become essential infrastructure for AI data centers, positioning Credo to capitalize on the trillion-dollar AI infrastructure expansion as hyperscalers like Amazon, Microsoft, and Elon Musk's xAI rapidly build out massive computing facilities. What you should know: Credo's active electrical cables (AECs) are becoming indispensable for connecting the massive GPU clusters required for AI training and inference. The company...

Oct 17, 2025

Vatican launches Latin American AI network for human development

The Vatican hosted a two-day conference bringing together 50 global experts to explore how artificial intelligence can advance peace, social justice, and human development. The event launched the Latin American AI Network for Integral Human Development and established principles for ethical AI governance that prioritize human dignity over technological advancement. What you should know: The Pontifical Academy of Social Sciences, the Vatican's research body for social issues, organized the "Digital Rerum Novarum" conference on October 16-17, combining academic research with practical AI applications. Participants included leading experts from MIT, Microsoft, Columbia University, the UN, and major European institutions. The conference...