Microsoft (MSFT) and OpenAI are investigating whether a group connected to the Chinese AI startup DeepSeek accessed OpenAI’s data without permission, according to a new report.

The start-up had become a key player in the “Chinese Large-Model Technology Avengers Team” that would counter US AI dominance, said another. China’s delight, however, spelled pain for several giant US technology companies as investors questioned whether DeepSeek’s breakthrough undermined the case for their colossal spending on AI infrastructure.