Microsoft and OpenAI are now investigating whether Chinese AI startup DeepSeek accessed data of OpenAI without their permission. The suspect comes after security researchers of Microsoft detected unusual activity in the fall and believed to be connected to DeepSeek. It is believed that the group may have allegedly extracted a large amount of data using the API OpenAI.

API is the primary way for businesses and developers to access technology of OpenAI. Microsoft is the largest investor of OpenAI and it was alerted about suspicious data activity. However, details are not yet clear and the probe has raised concerns about security of AI intellectual property as well as the increasing competition between U.S. and Chinese AI firms.

DeepSeek is a low-cost Chinese AI startup and has lately gained attention for offering a free AI assistant. It has outperformed OpenAI’s ChatGPT in Apple’s U.S. App Store rankings. The rapid rise even led to a selloff in tech stocks on Monday as investors reacted to the growing competition in the AI space.

David Sacks, AI and crypto policy advisor at the White House, suggested that DeepSeek may have stolen intellectual property from U.S. companies. He claimed there was substantial evidence that DeepSeek extracted knowledge from OpenAI’s models. However, it is just an allegation now and could lead to further scrutiny and legal action if proved to be true.

OpenAI spokesperson failed to mention DeepSeek directly while talking to the press but acknowledged that China-based companies and others are constantly trying to replicate leading U.S. AI models. OpenAI stated that it takes measures to protect its intellectual property such as limiting certain advanced capabilities in publicly released models.