Microsoft Corp. and OpenAI are investigating whether data output from OpenAI’s technology was obtained in an unauthorised manner by a group linked to Chinese artificial intelligence startup DeepSeek, said people familiar with the matter.
Microsoft’s security researchers in the fall observed individuals they believe may be linked to DeepSeek exfiltrating a large amount of data using the OpenAI application programming interface, or API, said the sources. Software developers can pay for a license to use the API to integrate OpenAI’s proprietary AI models into their own applications.

Microsoft, an OpenAI technology partner and its largest investor, notified OpenAI of the activity, the sources said. Such activity could violate OpenAI’s terms of service or could indicate the group acted to remove OpenAI’s restrictions on how much data they could obtain, the people said.
DeepSeek earlier this month released a new open-source AI model called R1 that can mimic the way humans reason, upending a market dominated by OpenAI and US rivals such as Google and Meta. The Chinese upstart said R1 rivaled or outperformed leading US developers’ products on a range of industry benchmarks and was built at a fraction of the cost. The potential threat to the US firms’ edge in the industry sent technology stocks tied to AI, including Microsoft, Nvidia Corp., Oracle Corp. and Google parent Alphabet Inc., tumbling on Monday, erasing a total of almost $1 trillion in market value.
“We know PRC based companies – and others – are constantly trying to distill the models of leading US AI companies,” an OpenAI spokesperson said, referring to the People’s Republic of China. “As we go forward it is critically important that we are working closely with the US govt to best protect the most capable models.” DeepSeek has said it had “distilled” models from its R1 system based on other open-source systems. Unlike OpenAI’s closed systems, some models such as Meta’s Llama are open-source and freely available for use.