Was DeepSeek's technology 'ripped off'? This is what ace investor Vinod Khosla thinks

Billionaire businessman and venture capitalist Vinod Khosla

Chinese AI startup Deepseek has shaken the generative AI landscape with its revolutionary model touted to be made operational at just $5 million, a fraction of what it cost its US rivals.

However, even as the world talks about the Deepseek models and future of generative AI, there are voices growing around the technology used. Ace angel investor Vinod Khosla has also slammed the AI startup for not doing any original work. Instead, Khosla claims, that the Deepseek made ‘mistakes’ similar to O1 model, which according to the veteran investor showed “a strong indication the technology was ripped off.”

One of our startups found Deepseek makes the same mistakes O1 makes, a strong indication the technology was ripped off. It feels like they then they hacked some code and did some impressive optimizations on top. Most likely, not an effort from scratch https://t.co/I4601u1MUJ
Vinod Khosla (@vkhosla) January 30, 2025

Khosla is not the only one questioning the capabilities of Deepseek. Yesterday, a Bernstein report had also questioned the claims of the AI model being made at the relatively small cost of $5 million. “We believe that DeepSeek DID NOT "build OpenAI for $5M"; the models look fantastic but we don't think they are miracles; and the resulting Twitter-verse panic over the weekend seems overblown," the report said about the AI chatbot that rattled the global markets and triggering panic sell-offs.

On January 27, Nvidia’s share price fell close to 17 percent, wiping out $589 billion in the biggest share fall since 2020 after DeepSeek was revealed to the world.

The decline eclipsed the previous record — a 9 percent drop in September that erased about $279 billion in value — and was the biggest in US stock-market history.

Since then, the stock has been very volatile despite recovering some of the losses.

The latest AI model of DeepSeek, released last week, is widely seen as competitive with those of OpenAI and Meta Platforms Inc. The open-sourced product was founded by quant-fund chief Liang Wenfeng and is now at the top of Apple Inc.’s App Store rankings.

With agency inputs