Deepseek AI Hype Wavers as Doubts Grow
Deepseek AI was billed as a game-changer, but signs suggest it’s propped up by existing models—has the hype already begun to unravel?
DeepSeek has been framed as a major breakthrough in AI, but mounting evidence suggests its success may have less to do with genuine innovation and more with repurposing existing technology. If claims that it relied on OpenAI’s proprietary models for training are true, then DeepSeek is not redefining AI development—it’s cutting corners to stay competitive.
At the core of the controversy is the allegation that DeepSeek used a technique called "distillation" to extract knowledge from ChatGPT. This process allows a smaller model to mimic a larger one, reducing development costs while maintaining performance.
While distillation itself is common in AI, using another company’s proprietary outputs without authorization would be a direct violation of intellectual property rights. OpenAI and Microsoft have launched investigations, and OpenAI claims to have found evidence supporting these accusations.
The fallout has already begun. The U.S. Navy has reportedly banned DeepSeek’s apps over security and ethical concerns, signaling that the risks go beyond corporate disputes. Meanwhile, markets have reacted sharply.
Nvidia lost 17% of its market value—$589 billion wiped out in a day, the largest one-day erasure of a company’s market cap—on fears that DeepSeek’s success could undercut demand for high-end AI hardware.
A partial rebound followed, but the broader concern remains: if DeepSeek’s cost efficiency comes from reusing existing work rather than original research, its competitive advantage may be unsustainable.
Like TikTok, DeepSeek’s success could be overshadowed by security concerns, leading to restrictions or a U.S. ban. This pattern isn’t limited to software. Under Biden, Washington imposed 100% tariffs on Chinese EVs, citing risks tied to data collection and foreign influence.
AI models and connected vehicles aren’t just commercial products—they’re data conduits, and in an era where information is power, that makes them a strategic liability. Whether in AI or EVs, the U.S. is signaling that next-generation technology is as much about security as it is about competition.