The United States has ordered federal private agencies to stop purchasing services and products developed by Chinese AI startup DeepSeek and remove them from government IT systems, citing national security concerns associated with the company’s operations in China, according to the Department of Homeland Security. The order goes beyond banning DeepSeek’s own products and also covers third-party products and services built using DeepSeek technology, although distributors can request exceptions.
According to the order, DHS expressed concerns about DeepSeek’s handling of user data and warned that sensitive information from U.S. government users may be accessible to Chinese authorities under Chinese law.
The move comes as technology competition in the AI field intensifies between the United States and China. Chinese AI models are challenging U.S. rivals like OpenAI and Meta with low-cost open-weight models.
China objected to the US move. Foreign Ministry spokesperson Mao Ning said Tuesday that the Chinese government opposes “overextending the concept of national security and politicizing technology and trade issues,” according to an official briefing. “We will resolutely protect the legitimate rights and interests of Chinese companies,” the spokesperson added.
The United States has already taken steps to limit the use of deep seeking within the government. The law, passed in December 2025, targets intelligence agencies’ use in national security systems. The latest order extends the restrictions to federal civilian agencies and covers both new purchases and existing IT systems.
Meanwhile, Bloomberg reported last week that China is considering export restrictions on 23 AI-related technologies, including chip designs and certain advanced AI models, to address security and abuse risks.
Ever since the R1 inference model shocked the AI industry and caused NVIDIA stock to plummet in January 2025, China’s AI research institutes have been under intense scrutiny from governments and regulators around the world.
According to a September report, the U.S. accused DeepSeek and five other Chinese AI companies, including Alibaba and Moonshot AI, of using large-scale model distillation to extract information from U.S. AI systems.
Additionally, OpenAI and Anthropic each raised concerns about DeepSeek’s alleged use of model distillation, a technique that uses the output of one AI model to train another. Earlier this year, OpenAI told U.S. lawmakers that it had observed suspicious attempts by DeepSeek to extract models, while Anthropic said it had identified fraudulent attempts by DeepSeek and other Chinese AI labs to collect output from Claude.
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