Chinese AI startup DeepSeek's model led to increased scrutiny on Microsoft's AI spending.

Days after Chinese upstart DeepSeek revealed a breakthrough in cheap AI computing that shook the U.S. technology industry, the chief executives of Microsoft and Meta defended massive spending that they said was key to staying competitive in the new field.

Microsoft CEO Satya Nadella believes that DeepSeek will inevitably help the American AI industry rather than hurt it. Microsoft chief executive Satya Nadella isn’t pressed about Chinese AI startup DeepSeek’s recent success.

Just a few hours after David Sacks claimed DeepSeek used OpenAI’s models to train its own models, Bloomberg Law reports that Microsoft is investigating

OpenAI has alleged that DeepSeek stole data from the company to train its R1 AI model and used a special technique to mask its tracks.

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.