Artificial Intelligence enterprise, DeepSeek, is reportedly assisting in the activities of the Chinese military and espionage structures, according to a high-ranking official in the U.S. The same official informed Reuters the Chinese tech startup was using intermediary firms in Southeast Asia as a means to obtain top-tier semiconductors that current U.S. regulations restrict from being exported to China.
Based in Hangzhou, DeepSeek stoked unrest among the global tech community when it announced in January that its AI reasoning models either matched or supersede leading U.S. models in proficiency, and all of this at just a fraction of the operating cost.
This assessment of DeepSeek’s undertakings and its alleged ties to the Chinese government by U.S. officials was not previously disclosed. The revelations come at a time when the U.S. and China are embroiled in a widespread trade dispute. The U.S. official suggested that DeepSeek was conveying user data and analytics to Beijing’s surveillance infrastructure.
Legislation in China mandates that companies operating within its borders must surrender data to the government upon demand. Concurrently, the U.S. applies limitations on firms it suspects are connected to China’s military-industrial nexus. DeepSeek remained silent when questioned about its data privacy norms.
The U.S. official stated that DeepSeek was in possession of ‘large quantities’ of state-of-the-art H100 chips made by U.S. company Nvidia. From 2022 onwards, these chips have been subject to export rules instigated by the U.S. The regulations stem from fears that China might leverage them to bolster its military strength or secure a prominent position in the global AI race.
Further inquiries on DeepSeek’s possession of Nvidia chips and supposed employment of shell entities for acquisitions met with no response. Probed about the possibility of introducing heightened export controls or levying additional sanctions against DeepSeek, the U.S. official revealed the department had ‘no news to share at the moment.’
Attempts to contact China’s Foreign Affairs and Commerce Ministries were met with silence. DeepSeek asserts that two of its AI configurations, hailed by Silicon Valley chiefs and engineers at U.S. tech firms as exceptional – DeepSeek-V3 and DeepSeek-R1, match the performance levels of OpenAI’s and Meta’s most sophisticated models.
However, the claims have been met with reservations by AI cognoscenti, who argue that the real costs of conditioning these models are presumably far more than the $5.58 million the startup alleges was expended on computational power.
Ostensibly, DeepSeek has managed to source H100 chips post the U.S.’s prohibition on Nvidia from retailing said chips to China. This detail was disclosed by three informants acquainted with the backdrop. However, they stressed that the number of H100s procured was significantly lesser than the 50,000 H100 chips that a CEO of a different AI startup alleged DeepSeek acquired.
To date, U.S. officials haven’t placed DeepSeek on their trade blacklist, nor have they claimed that Nvidia was aware of DeepSeek’s activities in alliance with China’s armed forces.