Government policies, generous funding and a pipeline of AI graduates have helped Chinese firms create advanced LLMs.

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, a Chinese AI research lab, has released an advanced AI model which rivals leading models from OpenAI. The DeepSeek-R1 model can perform complicated mathematical reasoning, code generation, and more with fewer resources than its American competitors.

Deepseek collects similar data to American-based AI models, but Chinese laws could make that data more accessible to the government.

Security experts are urging people to be cautious if considering using emerging AI chatbot DeepSeek because of the app’s links to China and the potential implications for personal data. The chatbot has upended the AI market with its emergence as a rival to the likes of ChatGPT and OpenAI,