The United States has ordered federal civilian agencies to stop purchasing products and services developed by Chinese AI startup DeepSeek and remove its technology from government IT systems. The Department of Homeland Security (DHS) cited national security concerns, including the possibility that sensitive government information could become accessible to Chinese authorities under the country’s laws.
The order published on October 20 extends beyond DeepSeek’s own applications to cover third-party products and services developed using its technology. Federal agencies may request exceptions, but the restrictions apply to both future purchases and existing government systems.
US Extends DeepSeek Restrictions to Civilian Agencies
DHS issued the order under the Federal Acquisition Supply Chain Security Act of 2018, following a recommendation from the Federal Acquisition Security Council. The department identified potential security risks associated with DeepSeek’s operations and data infrastructure in China.
According to the department, sensitive information processed through DeepSeek’s systems could potentially be accessed by Chinese authorities. The concern stems from Chinese laws governing company operations and government access to data, although the order does not establish that such information has been accessed.
The latest restrictions expand measures introduced in December 2025 that targeted DeepSeek’s use in intelligence and national security systems. Federal civilian agencies must now address both direct use of DeepSeek products and third-party applications incorporating its technology.
China Criticizes US Restrictions on DeepSeek
China rejected the US decision, accusing American authorities of using national security concerns to restrict Chinese technology companies. Foreign Ministry spokesperson Mao Ning addressed the order during an official briefing on October 20.
Mao said China opposes expanding the definition of national security and politicizing technology and trade matters. She added that Beijing would defend the legitimate rights and interests of Chinese businesses.
The dispute follows reports that China is considering export restrictions on 23 AI-related technologies, including semiconductor designs and advanced AI models. According to Bloomberg, the proposed controls are intended to address concerns about security and potential misuse.
DeepSeek Faces Scrutiny Over Data Security and AI Training
DeepSeek attracted international attention in January 2025 after releasing its R1 reasoning model, which offered competitive AI capabilities at relatively low costs. Its launch also contributed to a sharp decline in Nvidia’s market value as investors reassessed demand for AI computing hardware.
The Chinese company has since faced regulatory scrutiny in several countries, particularly over data privacy and government access to information. US authorities have also accused DeepSeek and five other Chinese AI companies, including Alibaba and Moonshot AI, of using large-scale model distillation to obtain information from American AI systems.
Model distillation involves using outputs from one AI model to train another, potentially allowing developers to reproduce certain capabilities without conducting the original training process. US AI developers have raised concerns about unauthorized use of this technique.
Earlier this year, OpenAI told US lawmakers that it had detected suspected attempts by DeepSeek to distill its models. Separately, Anthropic reported identifying unauthorized attempts by DeepSeek and other Chinese AI laboratories to collect outputs from its Claude models.
Featured image credits: Wikimedia Commons
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