The world of artificial intelligence is not just about breakthroughs in technology. It’s also a complex arena of national security and trade dynamics. A new report, citing a senior US State Department official, brings these complexities to light with serious allegations against Chinese AI firm DeepSeek. According to the official, DeepSeek is actively supporting China’s military and intelligence operations and has attempted to evade US export controls to access advanced semiconductors.

Hangzhou-based DeepSeek starred in many headlines earlier this year. The company claimed its AI reasoning models, particularly DeepSeek-V3 and DeepSeek-R1, were on par with or even superior to leading US models, all at a surprisingly low training cost. However, the US conclusions, as told to Reuters, suggest that DeepSeek’s capabilities might have been overstated and heavily reliant on US technology.

DeepSeek AI may have helped China evade export controls for US tech

The core of the US concern is DeepSeek’s potential willingness to provide “support to China’s military and intelligence operations.” This would be going beyond mere open-source access to their AI models. The official also stated that DeepSeek is reportedly sharing user information and statistics with Beijing’s surveillance apparatus. This raises significant privacy questions for the firm’s tens of millions of daily global users. It is especially important considering Chinese laws that can compel companies to provide data to the government. Previous concerns from US lawmakers have also pointed to the transmission of American user data to China through infrastructure linked to China Mobile, a state-owned telecom giant.

Beyond data sharing, the official detailed DeepSeek’s alleged efforts to circumvent US export restrictions designed to prevent China from using advanced chips to boost its military or AI capabilities. DeepSeek is accused of seeking to use “shell companies in Southeast Asia to evade export controls.” The US also accuses the company of trying to access US chips remotely via data centers in the region. They claim that the firm possesses “large volumes” of NVIDIA’s high-end H100 chips, subject to US export restrictions since 2022. Regarding this, NVIDIA stated their review indicates DeepSeek used legally acquired H800 chips, not H100s. However, the official’s comments underscore ongoing concerns.

Furthermore, DeepSeek appears over 150 times in procurement records tied to China’s People’s Liberation Army and other defense-affiliated entities, having reportedly provided technology services to PLA research institutions.

No direct sanctions against DeepSeek yet

Currently, there are no US trade blacklists or sanctions against DeepSeek. NVIDIA has also stated its strict adherence to SU export controls. However, these allegations highlight the intense scrutiny of AI development and technology transfers between nations. The ongoing investigation by Malaysia’s trade ministry into an unnamed Chinese company using NVIDIA chips for large language model training also points to broader efforts to monitor compliance with global trade regulations in the rapidly advancing field of AI.

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