DeepSeek faces potential US ban as officials cite national security risks

The Donald Trump administration is expected to ban the Chinese artificial intelligence (AI) chatbot mobile app DeepSeek from all US government devices due to “national security concerns.”

According to a report by the Wall Street Journal, US federal officials have raised alarms over DeepSeek’s handling of user data, which the AI company claims is stored on servers in China, per Caliber.Az.

The Wall Street Journal report also stated that US officials were considering additional restrictions, including removing the chatbot from app stores and limiting how US-based cloud service providers could offer DeepSeek's AI models to their customers. However, the discussions remain in the early stages.

Meanwhile, a group of 21 state attorneys general urged Congress on March 6 to pass a bill to prohibit the use of DeepSeek artificial intelligence software on government devices. The Wall Street Journal quoted the officials as saying the ban is necessary to prevent “foreign adversaries from exploiting AI technology to collect sensitive data from US users.”

DeepSeek’s rapid rise has already impacted global markets. The Wall Street Journal noted that the company’s low-cost AI models triggered a major sell-off in equity markets in January, as investors grew concerned that its emergence could challenge dominant AI firms.

Amidst these developments, Bloomberg reported that shares of Alibaba Group Holdings surged seven per cent earlier this week after the company unveiled an AI model it claims can perform as well as DeepSeek’s but with significantly lower data requirements.

Alibaba stated that its QwQ-32B model, launched in 2025, “outperforms the previous version with only five per cent of the parameters used by DeepSeek’s R1 model.” Following this announcement, Alibaba shares jumped as much as 7.5 per cent in Hong Kong trading, marking the company’s largest intra-day gain in nearly two weeks.

The company has seen a strong recovery this year, adding $135 billion to its market capitalization. “Alibaba is bouncing back after a prolonged regulatory crackdown,” Bloomberg reported.

DeepSeek was founded in 2023 by Liang Wenfeng, who also leads the Chinese quant hedge fund High-Flyer. The company gained prominence after various benchmarks demonstrated that its V3 large language model outperformed AI models from major US tech firms while maintaining lower development costs.

DeepSeek's R1 language model, designed to mimic aspects of human reasoning, also “matched and outperformed OpenAI’s latest O1 model in multiple benchmarks,” according to the Wall Street Journal.

By Tamilla Hasanova