OpenAI said on Wednesday that Chinese AI startup DeepSeek's open-source models may have "inappropriately" based its work on the output of OpenAI's models, an OpenAI spokesperson told Axios. Why it matters: China's DeepSeek has taken the AI industry by storm with its R1 reasoning model that competes with OpenAI's o1,

DeepSeek built top-performing AI models using less-advanced chips at what it says is a fraction of the cost of rivals such as OpenAI.

Chinese artificial intelligence company DeepSeek disrupted Silicon Valley with the release of cheaply developed AI models that compete with flagship offerings from OpenAI — but the ChatGPT maker suspects they were built upon OpenAI data.