"Microsoft, OpenAI Probe Chinese AI's Data Theft; Navy Bans DeepSeek"

DeepSeek's Disruption Sends Shockwaves Through AI and Financial Markets

In a significant development, Microsoft and OpenAI are reportedly investigating whether data from OpenAI's tech stack was improperly obtained by a group linked to Chinese AI startup DeepSeek. The probe follows the detection of suspicious large-scale data extraction through OpenAI's API in late 2024, according to a Bloomberg report.

The investigation centers on possible violations of OpenAI's terms of service or potential circumvention of data access restrictions. The White House crypto and AI czar, David Sacks, told Fox News that there is evidence DeepSeek used OpenAI's model outputs to train their own AI through a process called distillation. OpenAI acknowledged general concerns about Chinese companies attempting to distill US AI models but didn't specifically address DeepSeek.

Meanwhile, the US Navy banned its members from using DeepSeek out of fear the Chinese government could exploit sensitive data. The Navy sent a warning email to personnel stating that the AI model was not to be used "in any capacity" due to "potential security and ethical concerns associated with the model’s origin and usage."

The crypto market has shown signs of recovery, with infrastructure projects associated with artificial intelligence and a few attention-grabbing memecoins at the center of the renewed interest. AI-focused projects like ai16z, Pippin, Arc, Griffain, and Ava have seen stabilization at around a $100 million market cap. However, analysts are pricing in a lot of the growth potential, and economic policy announcements have played a large role in cushing the recent growth.

During the recovery, Solana's memecoin $PIPPIN has emerged as a standout performer. With a vibrant community and strong engagement across social media, this memecoin has managed to not only hold its price level but also to rally up and hit new all-time highs since May. A recent development for the token is its listing on OKX, a major cryptocurrency exchange, where it has manifested a new vigor. Its trading volume in the last 24 hours alone was an impressive $18.6 million, showcasing its still-bubbling interest among investors.

Indications of a recovery are clear, but the market is still wary. The broader economy, with inflation and liquidity shifts, is still very much influencing investor sentiment. For AI infrastructure