DeepSeek Allegedly STOLE OpenAI’s Tech… But New AI JUST BEAT Them Both!

AGI AI AGI, ai, fiction, Pinterest, short story, technology iNthacity Network January 29, 2025 0 Comments

The AI landscape is heating up, and it’s not just a battle of brains—it’s a full-blown war. The latest drama? Microsoft and OpenAI are investigating claims that Chinese startup DeepSeek stole proprietary OpenAI technology. This comes right after DeepSeek dropped its R1 model, a powerhouse AI that allegedly costs a fraction of what OpenAI spent on GPT-4 yet performs just as well—if not better. And just when you thought it couldn’t get crazier, Alibaba jumps in with its Qwen 2.5 model, claiming it outshines both DeepSeek and OpenAI. Buckle up, because the AI Wars just got real.

Why Is Microsoft So Concerned?

Microsoft, one of OpenAI’s biggest investors, is reportedly concerned about suspicious activity tied to DeepSeek. According to reports from Bloomberg, Microsoft’s security researchers detected unusual data pulls from OpenAI’s API last fall. This API is a major revenue channel for OpenAI, as developers use it to power their own apps and services. Once Microsoft flagged the activity, OpenAI launched an investigation.

But the big question is: Did DeepSeek actually steal anything? David Sacks, the White House’s AI and Cryptography expert, told Fox News there’s substantial evidence that DeepSeek “distilled” OpenAI’s knowledge into its own system. Distillation, for those unfamiliar, is a technique where one model learns from the outputs of another, effectively copying its capabilities. If true, this is a massive intellectual property violation—especially given the geopolitical tensions between the U.S. and China over advanced tech.

DeepSeek’s Rise to the Top

DeepSeek’s R1 model has already made waves. Earlier this year, its free AI assistant soared past ChatGPT to become the top free app on Apple’s App Store in the U.S. and dozens of other countries. How did a relatively unknown Chinese startup outpace American AI giants? Well, DeepSeek claims its R1 model, built with a shoestring budget, performs at the same level as OpenAI’s GPT-4. They say they spent just $5.6 million training it using 2,000 NVIDIA H800 GPUs. Compare that to OpenAI’s estimated $100 million price tag for GPT-4, which reportedly used 25,000 NVIDIA H100 GPUs. The numbers are staggering—and not everyone buys them.

Who’s Calling BS on DeepSeek?

Palmer Luckey, founder of Oculus VR, called DeepSeek’s numbers “bogus” and suggested it might be Chinese propaganda to disrupt U.S. tech investment.
Elon Musk, ever the skeptic, chimed in on social media, doubting DeepSeek’s claims without access to advanced hardware.
Alexander Wang from Scale AI speculated that DeepSeek might have secretly used 50,000 H100 GPUs, though he provided no concrete evidence.

So, is DeepSeek a genius innovator or a savvy opportunist? The debate rages on.

Alibaba Throws Down the Gauntlet

While the DeepSeek-OpenAI drama unfolds, Alibaba has entered the fray with its Qwen 2.5 model, claiming it outperforms both GPT-4 and DeepSeek’s R1 on benchmarks. Qwen 2.5 isn’t just a text model—it’s a versatile AI capable of handling complex text, image, and video analysis. And the timing? Perfect. Alibaba made the announcement during China’s Lunar New Year, ensuring maximum attention.

But here’s the kicker: Alibaba’s cloud business generated over $4.2 billion in revenue in Q2 2025, giving it the resources to push its AI models to the next level. While DeepSeek and OpenAI are duking it out, Alibaba is quietly positioning itself as a serious contender in the AI arms race.

The Geopolitical Angle

This isn’t just a tech showdown—it’s a geopolitical chess match. The U.S. has been restricting China’s access to advanced AI chips, but DeepSeek’s R1 model runs on Huawei’s Ascend 910C chips for inference. While these chips aren’t as powerful as NVIDIA’s top-tier models, they get the job done. This raises a critical question: Can China’s AI progress really be stifled by chip restrictions, or will they simply innovate with less powerful hardware?

Benchmark Battles: DeepSeek vs. OpenAI

Real-world benchmarks show that DeepSeek’s R1 is competitive with OpenAI’s GPT-4. In tests measuring creative writing, math, and logic, R1 outperformed GPT-4 in some areas—like identifying the one billionth prime number—but lagged in others, like complex instructions or hidden code challenges. The takeaway? R1 is in the same league as OpenAI’s best, which is impressive for a newcomer.

Task	DeepSeek R1	OpenAI GPT-4
Creative Writing	👍 Outperformed	👌 Solid
Math Logic	👌 Solid	👍 Outperformed
Code Challenges	👎 Lagged	👍 Outperformed

What’s Next in the AI Wars?

The AI sector is in flux. On one side, you have established players like OpenAI, Google, and Meta. On the other, Chinese challengers like DeepSeek, Alibaba, and ByteDance (the parent company of TikTok) are pushing the boundaries of what’s possible with less funding. The investigation into DeepSeek’s alleged data theft could reshape how companies approach security and licensing. Meanwhile, Alibaba’s Qwen models are poised to make waves, especially with their stock on the rise.

So, what does this mean for you? The AI Wars aren’t just about tech giants—they’re about the future of work, innovation, and global competition. Whether you’re a developer, a business leader, or just an AI enthusiast, staying ahead of the curve is essential. If you’re looking to future-proof your skills, check out Growth School’s free AI training—it’s a great way to dive into this rapidly evolving field.

The Bottom Line

The AI Wars are here, and they’re reshaping the future of technology. Whether DeepSeek stole OpenAI’s tech or found a genius way to level the playing field, one thing’s clear: Innovation is no longer the sole domain of American giants. As the battle heats up, we’ll be keeping a close eye on how this saga unfolds. What do you think—did DeepSeek cross the line, or are they simply outsmarting the competition? Let us know in the comments!

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