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David Sacks, AI and crypto czar. Source: Reuters.

Trump’s AI and crypto czar David Sacks said in an interview with Fox news on Tuesday that there is “substantial evidence” suggesting Chinese AI company DeepSeek used knowledge and learnings from OpenAI’s AI models.

“There’s substantial evidence that what DeepSeek did here is they distilled knowledge out of OpenAI models, and I don’t think OpenAI is very happy about this,” Sacks said. Though he did not provide any evidence to support his argument.

Sacks described a technique called distillation, whereby one AI model uses the outputs of another for training purposes to develop similar capabilities.

Sacks emphasised that the developers of DeepSeek used the distillation process to train their chatbot. Distillation is a process where one AI model uses the outputs of another for training purposes to develop similar capabilities.

In December 2024, President Donald Trump appointed Sacks as the White House AI and crypto czar. Trump tasked him with advising on policies related to artificial intelligence and cryptocurrencies.

Last week, Chinese artificial intelligence developer DeepSeek released an open-source AI model called R1. The new AI model is designed to mimic human reasoning. The company claimed that R1 matches or surpasses top US AI models on key benchmarks while being developed at a much lower cost.

DeepSeek became the most downloaded app on the Apple Store after its launch, gaining popularity among Americans.

There are claims that the new AI model showed better results at a fraction of the cost.

However, many in the tech industry are skeptical and questioning how DeepSeek built its technology.

DeepSeek’s launch caused a panic in the US markets. Nvidia’s stock experienced significant volatility on Monday following the release of a cost-effective AI model by the Chinese counterpart. However, the stock showed some recovery on Tuesday.

It also raised concerns about competition in the AI sector.