OpenAI told the Financial Times that it had seen some evidence of “distillation” and suspected it came from DeepSeek. British media explained that developers use “distillation” technology to obtain better performance on smaller AI models by using larger and more powerful AI model outputs, thereby being able to obtain similar results on specific tasks at a lower cost. This is in violation of Terms of Service of OpenAI which is a theft of Intellectual Property. That is why their cost is so low.
However, Chinese media keep on saying they have a team of 140 members and those are all local students which never been studied aboard. The average age is just 35, it is their hard work that have such a breakthrough. So which side is correct, investors better find out the answer on their own. In lands of press freedom, there are always fake news and genuine news coming together, no one can filter 100% correct for you.
On the other hand, Howard Lutnick, President Trump’s nominee for Commerce Secretary, when detailing the rationale for the tariffs at his confirmation hearing in Senate, also mentioned must try every means to stop DeekSeek from theft of intellectual property of Open AI. The tightening of the export of NVDA chips to China is necessary. Italy already stopped the download of DeepSeek for they afraid personal data kept in server of China would be harmful to them.
Put aside who is right and who is wrong, we better mind what action Trump will do against this incident. Above all, what’s the impact of Trump on the market better than guessing who is right and who is wrong. His personal assistant Elon Musk already said it is impossible for DeepSeek to use just 2,600 chips to make it. At least should be over 50,000. Commerce Secretary Nominee proposed to stop Chinese user to use Open AI in protection of intellectual property and further chase the source of illegal transfer of chips to China and Russia.