A senior US official reveals that Chinese AI firm DeepSeek is assisting Chinese military and intelligence operations and bypassing US export controls to acquire advanced chips. These accusations are raising growing concerns about national and technological security amid US-China competition.
Article contents:
- Introduction
- US allegations
- Overview of DeepSeek
- Military connections
- Bypassing export controls
- Acquiring NVIDIA chips
- Shell companies
- Data sharing
- US cloud providers
- Conclusion
Introduction
In a dramatic development in the trade and technological war between the United States and China, a senior US official revealed to Reuters that artificial intelligence firm DeepSeek is assisting Chinese military and intelligence operations. These accusations come amid a growing conviction in Washington that the capabilities of one of China’s most prominent AI firms may be exaggerated and heavily reliant on US technology.
US allegations
DeepSeek, based in Hangzhou, sent shockwaves through the tech world in January when it stated that its reasoning artificial intelligence models were on par with or better than leading US industry models at a fraction of the cost.
A senior US State Department official told Reuters in an interview: “We understand that DeepSeek has willingly provided and will likely continue to provide support for Chinese military and intelligence operations.” The official, who spoke on condition of anonymity to discuss US government information, added: “This effort goes beyond open-source access to DeepSeek’s AI models.”
Overview of DeepSeek
The US government’s assessment of DeepSeek’s activities and ties to the Chinese government has not been previously reported and comes amid a broader trade war between the US and China. Among the accusations, the official said DeepSeek shares user information and statistics with Beijing’s surveillance apparatus.
Chinese law requires companies operating in China to turn over data to the government upon request. However, the suggestion that DeepSeek is already doing so is likely to raise privacy and other concerns for a company with tens of millions of daily users worldwide.
Military connections
The company is also mentioned more than 150 times in procurement records for the Chinese People’s Liberation Army and other entities affiliated with China’s defense industrial base, the official said, adding that DeepSeek has provided technological services to PLA research institutions.
Reuters could not independently verify the procurement records. DeepSeek did not respond to questions about its privacy practices. The company also did not respond to questions about its possession of NVIDIA chips or the alleged use of shell companies.
Bypassing export controls
The official also said the company was using methods to bypass US export controls to access advanced American chips. DeepSeek has access to “large quantities” of high-performance H100 chips from US-based NVIDIA, the official said.
Since 2022, those chips have been under US export restrictions due to Washington’s concerns that China could use them to develop its military capabilities or leap ahead in the AI race.
The official said that “DeepSeek sought to use shell companies in Southeast Asia to circumvent export controls, and DeepSeek is seeking access to data centers in Southeast Asia for remote access to US chips.” The official declined to say whether DeepSeek succeeded in bypassing export controls or to provide more details about the shell companies.
DeepSeek acquired H100 chips after the US blocked NVIDIA from selling those chips to China, three sources familiar with the matter told Reuters, adding that the number was far below the 50,000 H100s that the CEO of another AI company claimed DeepSeek owned in a January interview with CNBC.
Shell companies
In February, Singapore charged three men with fraud in a case local media linked to the movement of advanced NVIDIA chips from the city-state to DeepSeek. China is also suspected of finding ways to use advanced US chips remotely.
While importing advanced NVIDIA chips into China without a license violates US export rules, Chinese companies are still permitted to remotely access those same chips in data centers located in unrestricted countries.
Data sharing
Exceptions apply when a Chinese company is on a US trade blacklist or when the chip exporter has knowledge that the Chinese firm is using its chips to help develop weapons of mass destruction. US officials have not yet placed DeepSeek on any US trade blacklists and have not accused NVIDIA of having any knowledge of DeepSeek’s work with the Chinese military.
The Malaysian Ministry of Trade said last week that it is investigating whether an unnamed Chinese company in the country is using servers equipped with NVIDIA chips to train large language models and is examining whether any local laws or regulations were violated.
US cloud providers
The three major US cloud providers—Amazon, Microsoft, and Alphabet’s Google—offer DeepSeek to customers. Chinese law requires companies operating in China to turn over data to the government upon request.
However, the suggestion that DeepSeek is already doing so is likely to raise privacy and other concerns for a company with tens of millions of daily users worldwide. The United States also maintains restrictions on companies it believes are linked to the Chinese military-industrial complex.
Conclusion
US accusations against DeepSeek reflect escalating technological tensions between the two superpowers. This issue highlights the complex challenges of the era of technological globalization, where commercial innovations are intertwined with national security considerations. As the United States and China continue their AI race, cases like DeepSeek underscore the importance of transparency and compliance with international laws in developing these sensitive technologies. The future will determine how these accusations impact the path of global technological cooperation and competition.
