OpenAI believes DeepSeek used a process called “distillation,” which helps make smaller AI models perform better by learning from larger ones.

KEY TAKEAWAYS OpenAI said Wednesday that it is probing whether Chinese artificial intelligence startup DeepSeek improperly used its data to launch the low-cost model that spooked markets Monday.The comment by OpenAI follows a Bloomberg report that both OpenAI and its biggest backer Microsoft are investigating DeepSeek's model.

The start-up had become a key player in the “Chinese Large-Model Technology Avengers Team” that would counter US AI dominance, said another. China’s delight, however, spelled pain for several giant US technology companies as investors questioned whether DeepSeek’s breakthrough undermined the case for their colossal spending on AI infrastructure.