As first reported by Reuters, a senior official from the U.S. State Department disclosed that AI company DeepSeek has played an active role in aiding China’s military and intelligence operations. The official, speaking on condition of anonymity, said DeepSeek has gone beyond open-source access and provided direct support to surveillance systems and defense institutions in China. The Hangzhou-based firm, which gained prominence after claiming its models rivaled OpenAI’s at a fraction of the cost, is now at the center of Washington’s growing concerns over national security risks tied to emerging Chinese AI players.
The official added that DeepSeek attempted to circumvent U.S. export restrictions by setting up shell companies in Southeast Asia and using remote data centers to gain access to Nvidia’s advanced H100 chips—hardware that has been off-limits to Chinese entities since 2022. These workarounds may have allowed DeepSeek to train its powerful models despite sanctions. Although Reuters could not independently verify the extent of DeepSeek’s access to the chips, three sources familiar with the matter indicated the company obtained some H100s post-ban, though fewer than the tens of thousands it previously implied.
There are also mounting concerns about user data. U.S. lawmakers and officials cite evidence that DeepSeek has transmitted American users’ information via backend systems connected to China Mobile, in line with legal obligations under Chinese law. Despite the company’s widespread international user base, it did not respond to questions about its privacy practices or its involvement in military procurement, where its name appears in over 150 related documents.
DeepSeek has not been placed on any U.S. trade blacklist to date, and there is no indication that Nvidia knowingly facilitated the firm’s military ties. However, the case is prompting further investigation across Southeast Asia, including a Singaporean fraud case and a Malaysian inquiry into possible illegal model training using Nvidia chips. Nvidia, in a statement, reiterated that it complies with export laws and has effectively exited the Chinese data center market, now dominated by domestic firms like Huawei.
The revelations surrounding DeepSeek mark another flashpoint in the escalating U.S.-China tech rivalry, as Washington seeks to close loopholes in export control enforcement. With AI increasingly viewed through a geopolitical lens, this case illustrates how advanced technologies are becoming tightly interwoven with national security concerns and global regulatory challenges.
