The Artificial Intelligence industry is moving ahead with full vigor with the introduction of Generative AI in the scene. The tech has taken the internet by storm by helping users from understanding technical topics, generating cool and creative images, helping creators create songs and full fledged movies, and what not. Industry leaders like OpenAI, Google, Microsoft, etc. are rigorously working on their Generative AI tools and technologies for the world to ride and surf this AI wave.
Lately, many new players like DeepSeek have emerged out of nowhere and have already disrupted industry with their technology. As a collective effort to improve the quality of the technology and the AI industry, industry giants like OpenAI have made their technologies Open-Source for other developers to use and develop their own products and take the AI industry forward. However, the emergence of players like DeepSeek , out of nowhere have shook the giants and made them to re-evaluate their Open-Source strategies.
In this article, we will discuss how the introduction of players like DeepSeek has taken the Generative AI industry by storm and how it might lead us into a new era where companies might reconsider their Open-Source Strategies and may lead to potential patent lawsuits in the future making the Generative AI market more competitive than ever.
Understanding Generative AI, Chatbots, LLMs and their patent landscape
First, let us understand what Generative AI, Chatbots and Large Language Models are. According to IBM Research, Generative AI refers to deep-learning models that can generate high-quality text, images, and other content based on the data they were trained on.
For Chatbots, as per Oracle, they are computer programs that simulate and process human conversation allowing humans to interact with digital devices as if they were communicating with a real person. And Microsoft Azure defines LLMs or Large Language Models as advanced AI systems that understand and generate natural language, or human-like text, using the data they have been trained on through machine learning techniques.
OpenAI’s ChatGPT, Google’s Gemini (formally known as Bard) are some of the leading Generative AI tools in the market. Additionally, if we see the patent landscape around Generative A, WIPO (World Intellectual Property Organization) suggests that the number of patent families in Generative AI has grows significantly from only 733 in 2014 to more than 14,000 in 2023.
WIPO further suggests that China is not only the most favored jurisdiction for inventors to file for Generative AI related patents, but also the top country in terms of patent filings, as more than 40,000 Generative AI patent families have been filed in China between 2014 and 2023.
If we talk about top AI companies specifically, sources suggest OpenAI, for instance, has just 9 active granted public patents. The reason for this is that OpenAI had open-sourced their technology as they want to promote innovation in the Generative AI field and allow other developers to develop and contribute to the sector. However, recently OpenAI has shifted more towards closed-source citing safety issues and misuse prevention.
DeepSeek’s Introduction disrupting the market
Amid all this, a new player from China, named DeepSeek has entered the market recently and has shook the entire industry. As per an article published by the BBC, DeepSeek is a free AI-powered chatbot. The reason why it has created waves in the tech market in the U.S. and around the world is because it claims that it is developed using only around $5.5 million and very limited technology resources, as compared to its biggest competitor, OpenAI’s ChatGPT which reported took around $540 million to develop.
The Chinese AI chatbot shook the U.S. market so bad that reports suggest, the Nasdaq Composite Index fell by approximately 3.1%. Nvidia, a leading AI chipmaker, experienced a decline of around 17% in it’s stock price. This resulted in a market capitalization loss of around $593 billion for the chipmaker giant, the largest single-day loss for any company on the Wall Street till date.
Other giants were also subjected to the shock waves, as Broadcom Inc. saw a 17.4% decrease in their share price, Microsoft fell by 2.1% and Alphabet (Google’s parent company) declined by 4.2%. Together, around $1 trillion from the U.S. tech index where wiped out with the release of the Chinese AI-chatbot.
OpenAI vs. DeepSeek Controversy and the Aftermath
However, OpenAI has accused the Chinese counterpart of obtaining the technology in an unauthorized manner through a technique known as “distillation”, reports suggest. The magnitude of the impact created by DeepSeek’s introduction in the Generative AI market can be seen by the fact that Sam Altman, the CEO of OpenAI has already released a statement that they might reconsider their open-source strategy, presumably to counter the competition that has emerged. This could also trigger an industry wide shift from Open-Source to Close-Source and gain a competitive advantage rather than collaborating with each other.
A future full of Generative AI patent lawsuits?
As multiple reports from WIPO have already disclosed that China is the most favoured jurisdiction for inventors to file Generative AI related patents, and the how the Asian Superpower is aggressively moving ahead in the AI game with players like DeepSeek and Alibaba’s Qwen 2.5, inventors might want to leverage this situation and will want to monetize their patents through various means.
Additionally, with the latest changes made by the Chinese government in the patent laws related to damages, increasing it to around 5 times than earlier might unlock the potential for much more patent infringement lawsuits in the Generative AI domain in China.
