US Bans Use of Chinese AI Startup DeepSeek Over Data Security Concerns

The United States Department of Homeland Security has ordered government agencies to stop using artificial intelligence tools from the Chinese startup DeepSeek. This decision comes amid concerns about data being sent to China.

DeepSeek was founded in 2023 by Liang Wenfeng in Hangzhou, a major tech city in China. The company gained attention in January 2025 with its R1 deep-reasoning language model, which performed similarly to popular US chatbots like ChatGPT. Venture capitalist Marc Andreessen described its success as a “Sputnik moment,” referencing the Soviet Union’s launch of the first artificial satellite.

DeepSeek’s AI tools avoid discussing sensitive topics that are often censored in China, such as the 1989 Tiananmen Square protests. This has led to restrictions on its use in several countries, including the US, Australia, and South Korea. The US government’s recent ban specifically prohibits civilian agencies from using DeepSeek’s products.

Despite these challenges, DeepSeek has gained popularity in developing countries due to its low cost and ease of use. The company holds about four percent of the global chatbot market, while ChatGPT leads with 68 percent.

DeepSeek’s systems are open-source, allowing programmers to modify the software. This is in contrast to the closed models offered by Western companies like OpenAI. The Chinese government has highlighted its advancements in open-source AI technology as a driver of innovation.

DeepSeek’s success has also boosted China’s AI industry, with other startups seeing increased interest from investors. In June, DeepSeek was valued at over $50 billion during its first funding round.

However, DeepSeek’s rise has not been without controversy. Reports suggest the company may have circumvented US export bans on high-end chips to develop its latest AI model. DeepSeek has not commented on these allegations, while Nvidia, a major chip supplier, stated that they have not seen evidence of such actions.