Deepseek's Data theft

Microsoft and OpenAI are investigating a potential breach of OpenAI’s systems by a group linked to Chinese AI startup DeepSeek. The probe follows suspicious data extraction activities detected in late 2024 through OpenAI’s API, sparking concerns about international AI competition. Microsoft, OpenAI’s primary financial backer, first noticed the large-scale data harvesting and alerted OpenAI. It’s believed that the group may have violated OpenAI's terms of service or exploited loopholes to bypass data collection restrictions.

DeepSeek recently gained attention for its new AI model, R-1, which has been compared to OpenAI’s ChatGPT in terms of performance but was developed at a lower cost. The launch of R-1 caused a significant drop in tech and AI stock values, losing billions in a single week. White House AI czar David Sacks suggested that DeepSeek might have used "distillation" to train R-1, potentially utilizing OpenAI’s system outputs without permission. This practice raises ethical concerns around intellectual property, as distillation can allow competitors to replicate AI capabilities.

OpenAI has acknowledged the risks posed by model distillation, particularly from Chinese companies. Geopolitical tensions have escalated, with the US Navy banning DeepSeek's products due to security concerns. Critics also raised alarms about DeepSeek's data collection practices, including tracking user activity and keystrokes. This investigation highlights the growing intersection of AI, national security, and international competition, as countries vie for leadership in AI development and navigate complex ethical and security issues.

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