DeepSeek’s AI breakthrough challenges Big Tech with a cheaper, efficient model. This may be bad for the incumbents, but good for everybody else.

The start-up had become a key player in the “Chinese Large-Model Technology Avengers Team” that would counter US AI dominance, said another. China’s delight, however, spelled pain for several giant US technology companies as investors questioned whether DeepSeek’s breakthrough undermined the case for their colossal spending on AI infrastructure.

Experts say AI model distillation is likely widespread and hard to detect, but DeepSeek has not admitted to using it on its full models.

OpenAI claims that Chinese startups are persistently trying to copy the technology of American AI companies. Aligned with that, OpenAI says it and partner Microsoft have been banning accounts suspected of “distilling” its models.

OpenAI has accused Chinese AI start-up DeepSeek of using its proprietary models to train an open-source competitor.