Palmer Luckey Accuses DeepSeek Of Lying About AI Model Costs: 'The $5M Number Is Bogus'

Palmer Luckey, the 32-year-old American tech entrepreneur, has cast doubt on the bold claims made by Chinese AI startup DeepSeek, and also accused the US media of blindly reporting the company's statements without doing much research.

In an exclusive interview on FOX Business' The Claman Countdown on 28th January, Palmer Luckey questioned reports suggesting that DeepSeek had trained an AI model for just £4.01 million ($5 million)—a fraction of the billions spent on comparable American models. His scepticism adds to growing concerns that DeepSeek's claims may be exaggerated, with some critics fearing the company's messaging could be influenced by Chinese Communist Party (CCP) propaganda.

Tech Entrepreneur Raises Concerns Over DeepSeek Hype

Luckey, who sold Oculus to Facebook for billions and founded the defence firm Anduril, pointed out that DeepSeek hasn't disclosed the full costs of both its AI models. He criticised the media for overlooking the fact that a substantial portion of the startup's infrastructure costs remain undisclosed.

'I think the problem is they put out that number specifically to harm US companies. You had a lot of useful idiots in US media kind of just mindlessly reporting that that's the case, and neither China nor the media nor DeepSeek has any kind of incentive to correct the record as a lot of US companies like Nvidia crashed to the tunes of hundreds of billions of dollars,' Luckey said.

Chinese Startup Shakes Up The AI World

DeepSeek's model rivals the power of chatbots like OpenAI's ChatGPT and Meta's Llama, yet it reportedly costs a fraction to develop. It also topped the Apple App Store over the weekend and can run on less powerful Nvidia chips.

These revelations sent shockwaves through the US tech sector on 27th January. While acknowledging DeepSeek's impressive strides and innovations in AI, Luckey cautioned against overhyping the company's claims.

'I don't think that people should take what they're saying at face value, and they should realise that there are a lot of people cheering for the United States to fail,' he said. 'There's people who are clearly cheering for our tech companies to fail and, obviously, President Trump to fail. It's a shame that so many of them are in the United States.'

'There's a reason they put out the news that way, and if the stock market is any indication, it's accomplishing exactly what they hoped to,' he added. 'So, look, we can recognise that Chinese AI is a real competitive threat without losing our minds over it and falling for CCP (Chinese Communist Party) propaganda.'

Microsoft Investigates DeepSeek Data Breach

Beyond the technical debate, Microsoft is now investigating whether a group linked to DeepSeek improperly accessed sensitive data from OpenAI. This move adds another layer of complexity to this unfolding story.

Bloomberg News reported Tuesday that Microsoft and OpenAI are investigating whether a group connected to DeepSeek, a Chinese AI startup, improperly accessed data generated by OpenAI's technology.

Microsoft security researchers discovered, according to the report, that individuals they suspect have ties to DeepSeek may have illegally accessed a significant amount of data through OpenAI's API last fall.

OpenAI's API is the primary way software developers and businesses access OpenAI's services. Microsoft, a major investor in OpenAI, alerted the company to the suspicious activity.

The AI Arms Race

The investigation into DeepSeek's activities adds another layer of complexity to the already heated debate surrounding the rapid advancement of AI. As the US and China vie for dominance in this critical technology, concerns are mounting about potential misuse, data security, and the ethical implications of AI development.