Microsoft has launched an investigation into DeepSeek, a Chinese company behind the R1 reasoning model, over allegations of misusing OpenAI's application programming interface (API) to train its own AI models. The probe, reported by Bloomberg Law, comes just hours after David Sacks claimed that DeepSeek used OpenAI's models to train its own models.

According to security researchers working for Microsoft, DeepSeek may have exfiltrated a large amount of data using OpenAI's API in the fall of 2024. Microsoft, which is also OpenAI's largest shareholder, notified OpenAI of the suspicious activity. The investigation highlights the importance of ensuring responsible AI development and the need for robust safeguards to prevent the misuse of AI models.

OpenAI's terms of service explicitly prohibit users from using the output of its API to develop competing AI models. The company's terms of use state, "You are prohibited from […] using Output to develop models that compete with OpenAI." Additionally, users are not allowed to "automatically or programmatically [extract] data or Output." The core issue at hand appears to revolve around distillation, a method used by AI model developers to extract knowledge from another model using a teacher-student approach.

The investigation raises questions about whether DeepSeek has found innovative ways to circumvent OpenAI's rate limits and query its API at scale. If so, there will likely be legal ramifications, sparking a broader conversation about the need for stricter regulations and oversight in the AI development space. The incident also underscores the importance of transparency and accountability in AI development, particularly when it comes to the use of proprietary models and APIs.

The fallout from this investigation could have significant implications for the AI industry as a whole. As AI models become increasingly sophisticated and widespread, the need for robust safeguards and responsible development practices will only continue to grow. The incident serves as a reminder that AI development must be guided by ethical principles and a commitment to transparency and accountability.

As the investigation unfolds, it remains to be seen what consequences DeepSeek will face if found to have misused OpenAI's API. One thing is clear, however: the incident highlights the need for a more nuanced and informed conversation about the risks and challenges associated with AI development. By shedding light on these issues, the tech industry can work towards a more responsible and sustainable future for AI.