In an interview with Fox News, Sacks said there was “substantial evidence” that DeepSeek had used a technique known as “distillation” to build its AI models.

Sacks did not go into detail about the evidence OpenAI had.

“I think one of the things you’re going to see over the next few months is our leading AI companies taking steps to try and prevent distillation,” he said. “That would definitely slow down some of these copycat models.” 

What is distillation?

In machine learning, distillation is a process where outputs from a large, pre-trained model are used to train another, usually smaller model to exhibit similar capabilities.

The technique is common in the field and often used when companies want to deploy a model on devices with limited resources, like mobile phones.

However, Bloomberg reported that OpenAI and Microsoft are probing whether DeepSeek used the technique to help train its rival reasoning model—something that would breach OpenAI’s terms of service.

An OpenAI spokesperson told Fortune that it was aware that China-based companies and others were “constantly trying to distill the models of leading U.S. AI companies.”

“As the leading builder of AI, we engage in countermeasures to protect our IP, including a careful process for which frontier capabilities to include in released models, and believe as we go forward that it is critically important that we are working closely with the U.S. government to best protect the most capable models from efforts by adversaries and competitors to take U.S. technology,” the spokesperson said.

OpenAI said it has technical measures in place to prevent and detect these sorts of attempts and has worked with Microsoft to jointly identify attempts to distill models, revoking access to accounts attempting to do so.

Microsoft representatives did not immediately respond to Fortune’s request for comment. OpenAI declined to provide details when asked about evidence of distillation by DeepSeek.

DeepSeek R1 causes shock waves across AI industry

Rumors that DeepSeek had used distillation to build its models have been circulating since the company released its powerful large language model, V3, in December.

Those rumors only intensified in the wake of DeepSeek’s release of its R1 model last week.

R1, an enhanced version of V3, uses reinforcement learning to improve performance on math, logic, and reasoning questions. It takes longer to respond, employing a step-by-step “chain of thought” process to evaluate different strategies before producing an answer.

Before DeepSeek released R1, very few models had been released that could perform this kind of reasoning.

The best-known and most capable of these reasoning models is OpenAI’s o1 model, which debuted a preview version in September and a more capable, full version in December. DeepSeek may have used examples of questions and answers from o1 to help train its own R1 model.

While OpenAI hid the actual chain of thought reasoning from users in its o1 model, the step-by-step nature of the o1 responses could be enough to help train a rival reasoning model.

OpenAI could try various ways to gather evidence of distillation, but it could be difficult for the AI lab to prove exactly what DeepSeek has done without access to internal company data.