OpenAI announced it has uncovered evidence that Chinese artificial intelligence startup DeepSeek allegedly used its proprietary models for unauthorized training purposes, the ChatGPT maker told the Financial Times, intensifying concerns over intellectual property protection in the AI sector.

What Happened: The San Francisco-based company, partnering with Microsoft Corp. (NASDAQ:MSFT), discovered suspicious activity last fall when security researchers identified individuals reportedly linked to DeepSeek extracting substantial data through OpenAI’s API, Bloomberg reported, citing sources. The investigation led to the blocking of suspected accounts for violating terms of service.

This development emerges as OpenAI navigates complex discussions about its transition to a for-profit entity, with its board working to value Microsoft’s stake while negotiating a $30 billion valuation for its new charitable division.

The restructuring talks, ongoing since September, aim to split OpenAI into two entities, with the charitable arm maintaining a stake in the newly formed public benefit corporation.

OpenAI, Microsoft, and DeepSeek did not immediately respond to Benzinga's request for comment.

David Sacks, Trump’s AI and crypto tsar in an interview with Fox on Tuesday said, “There's substantial evidence” that Deepseek “distilled knowledge out of OpenAI's models”. Distillation is the process where smaller models obtain better performance by using outputs from larger models.

Adding to the momentum, OpenAI CEO Sam Altman hinted at expanding collaboration with Microsoft on Wednesday, posting on X: “next phase of the msft x oai partnership is gonna be much better than anyone is ready for!!” alongside a photo with Microsoft CEO Satya Nadella.

See Also: Tesla Gears Up For Q4 Print; Here Are The Recent Forecast Changes From Wall Street’s Most Accurate Analysts

OpenAI emphasized its commitment to protecting intellectual property, stating, “We know [China]-based companies — and others — are constantly trying to distill the models of leading U.S. AI companies,” and highlighted its ongoing collaboration with the U.S. government to safeguard advanced AI capabilities.

Read Next:

• Jim Cramer Says The ‘Shoot First Learn Later’ Crowd Got ‘Hosed’ As Nvidia And Other Tech Stocks Stage Recovery After DeepSeek Turmoil

Image Via Shutterstock

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.