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.

OpenAI claims to have found evidence that Chinese AI startup DeepSeek secretly used data produced by OpenAI’s technology to improve their own AI models, according to the Financial Times. If true, DeepSeek would be in violation of OpenAI’s terms of service. In a statement, the company said it is actively investigating.

DeepSeek is causing havoc throughout the AI industry. U.S.-based tech companies that have heavily invested in AI saw their stocks take a tumble this week after the China-based startup released a new AI model on par with OpenAI's latest model, yet much cheaper to train — plus, DeepSeek made it free and open source.