"DeepSeek's Rise Sparks U.S. Scrutiny, IP Theft Allegations"

The tech world was abuzz this week as Chinese AI startup DeepSeek found itself under intense scrutiny from U.S. officials and tech giants alike, with allegations of data misappropriation and intellectual property theft taking center stage.

Microsoft and OpenAI launched a joint investigation into suspected unauthorized data collection by individuals allegedly linked to DeepSeek. The probe follows the detection of large-scale data extraction through OpenAI’s API by what Microsoft’s security researchers believed to be DeepSeek-affiliated individuals. This interface serves as the primary access point for developers and business customers to utilize OpenAI’s services.

Adding fuel to the fire, DeepSeek’s free AI assistant surpassed OpenAI’s ChatGPT on Apple’s U.S. App Store, triggering a significant market reaction. The tech stock selloff was particularly harsh on Nvidia, which saw nearly $600 billion wiped off its market value.

Howard Lutnick, the U.S. Commerce Secretary nominee, directly accused DeepSeek of IP theft during his Senate nomination hearing. Lutnick’s comments echoed broader concerns within the U.S. government about potential misappropriation of American technology by Chinese companies.

The White House AI and crypto czar, David Sacks, supported these allegations in a Fox News interview, citing what he called “substantial evidence” that DeepSeek had employed distillation techniques to extract knowledge from OpenAI’s models, violating the company’s terms of service.

OpenAI responded to the developments with a measured statement, acknowledging attempts by China-based companies to replicate U.S. AI models. The company emphasized its commitment to protecting intellectual property through various countermeasures, including careful control over released model capabilities.

The U.S. Navy took preemptive action, directing its personnel to avoid using DeepSeek’s technology due to potential security and ethical concerns related to the model’s origin and usage.

Italian regulators joined the fray, giving DeepSeek a 20-day deadline to provide detailed information about their data collection, storage practices, and AI training methods. This request came despite the information being publicly available in DeepSeek’s Privacy Policy.

The controversy sparked debate within the tech community. Perplexity CEO Aravind Srinivas offered a technical perspective, suggesting that DeepSeek’s success stemmed from innovative reinforcement learning approaches rather than simple imitation of existing models.

Prominent hedge fund manager Bill Ackman raised questions about potential market manipulation, suggesting that Deep