The ongoing dispute between OpenAI and DeepSeek, a Chinese AI startup, has sparked major controversy in the AI world. The conflict centers around accusations that DeepSeek used OpenAI’s proprietary models to train its own AI systems, which some see as a potential violation of intellectual property rights.

As per FT, OpenAI claims it has evidence showing that DeepSeek illegally used its models through a process called “distillation,” which allowed DeepSeek to create more efficient models with less data. OpenAI’s terms of service explicitly prohibit using its models to build competing products, so this has raised serious legal concerns.

According to Bloomberg, Microsoft is investigating whether a “DeepSeek-linked group” unlawfully accessed OpenAI’s data. The trade war has escalated to a new level.

The situation has been complicated by a large-scale cyber attack on DeepSeek, which temporarily halted new user registrations. This attack happened just as DeepSeek’s AI system was gaining popularity, briefly surpassing ChatGPT as the most downloaded free app on the Apple App Store in the U.S.

DeepSeek’s AI, particularly its R1 model, has been praised for matching or even outperforming OpenAI’s O1 model in some benchmarks, but at a fraction of the cost. DeepSeek claims it spent only $6 million to train its model, while OpenAI’s training expenses are much higher.

This breakthrough by DeepSeek has also had an impact on the market. Stocks of major tech companies like Nvidia saw significant drops after news spread of DeepSeek’s competitive models being offered at such a low price.

At the heart of the debate is the difference in business models: DeepSeek’s open-source approach versus OpenAI’s closed-source strategy. Some believe DeepSeek is continuing OpenAI’s original mission of making AI more accessible, but this has stirred up discussions about the benefits and risks of open-source development.

The clash also raises important legal and ethical questions. Critics argue that OpenAI may be contradicting its own stance on intellectual property, especially considering its history with copyright concerns.

Overall, this dispute highlights the growing tension between U.S. and Chinese tech companies, as well as the broader challenges of intellectual property, competition, and ethics in the fast-evolving AI industry.

Chinese AI Startup DeepSeek’s Chatbot Scores Just 17% Accuracy in NewsGuard Audit

Chinese AI startup DeepSeek’s chatbot scored only 17% accuracy in a NewsGuard audit, ranking 10th out of 11 compared to Western competitors like OpenAI’s ChatGPT and Google Gemini. The chatbot repeated false claims 30% of the time and gave vague or unhelpful answers 53% of the time, leading to an 83% fail rate. This was worse than the 62% average fail rate of Western AIs. Despite its low performance, DeepSeek’s app became the most downloaded on the Apple App Store, raising concerns about China’s AI progress. The audit also revealed that DeepSeek echoed China’s government stance on certain topics without being prompted.

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