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The narrative that OpenAI, Microsoft, and freshly minted White House “AI czar” David Sacks are now pushing to explain why DeepSeek was able to create a large language model that outpaces OpenAI’s while spending orders of magnitude less money and using older chips is that DeepSeek used OpenAI’s data unfairly and without compensation. Sound familiar?
Both Bloomberg and the Financial Times are reporting that Microsoft and OpenAI have been probing whether DeepSeek improperly trained the R1 model that is taking the AI world by storm on the outputs of OpenAI models.
Here is how the Bloomberg article begins: “Microsoft Corp. and OpenAI are investigating whether data output from OpenAI’s technology was obtained in an unauthorized manner by a group linked to Chinese artificial intelligence startup DeepSeek, according to people familiar with the matter.” The story goes on to say that “Such activity could violate OpenAI’s terms of service or could indicate the group acted to remove OpenAI’s restrictions on how much data they could obtain, the people said.”
The venture capitalist and new Trump administration member David Sacks, meanwhile, said that there is “substantial evidence” that DeepSeek “distilled the knowledge out of OpenAI’s models.”
“There’s a technique in AI called distillation, which you’re going to hear a lot about, and it’s when one model learns from another model, effectively what happens is that the student model asks the parent model a lot of questions, just like a human would learn, but AIs can do this asking millions of questions, and they can essentially mimic the reasoning process they learn from the parent model and they can kind of suck the knowledge of the parent model,” Sacks told Fox News. “There’s substantial evidence that what DeepSeek did here is they distilled the knowledge out of OpenAI’s models and I don’t think OpenAI is very happy about this.”
I will explain what this means in a moment, but first: Hahahahahahahahahahahahahahahaha hahahhahahahahahahahahahahaha. It is, as many have already pointed out, incredibly ironic that OpenAI, a company that has been obtaining large amounts of data from all of humankind largely in an “unauthorized manner,” and, in some cases, in violation of the terms of service of those from whom they have been taking from, is now complaining about the very practices by which it has built its company.
The argument that OpenAI, and every artificial intelligence company who has been sued for surreptitiously and indiscriminately sucking up whatever data it can find on the internet is not that they are not sucking up all of this data, it is that they are sucking up this data and they are allowed to do so.