A senior U.S. official has accused Chinese artificial intelligence startup DeepSeek of supporting China's military and intelligence operations, signaling heightened concern in Washington over the global reach and methods of China's rapidly growing tech firms.
According to the official, DeepSeek is actively aiding military-linked research institutions and is allegedly leveraging shell companies in Southeast Asia to access high-end U.S. semiconductors barred from export to China.
The comments, made to Reuters under condition of anonymity, reveal a previously unreported U.S. government assessment and come amid broader scrutiny of Chinese firms and escalating technology tensions between Washington and Beijing.
From AI Breakthroughs to Controversy
Hangzhou-based DeepSeek stunned the AI community earlier this year with claims that its models — DeepSeek-V3 and DeepSeek-R1 — rival industry leaders OpenAI and Meta in reasoning capabilities, all at a fraction of typical development costs. However, those claims have now come under fresh scrutiny.
U.S. officials say the company's rapid progress may have relied heavily on unauthorized access to restricted U.S. technology. Central to those concerns is Nvidia’s H100 chip — one of the most powerful processors available for AI training — which has been subject to strict U.S. export restrictions since 2022.
Despite these restrictions, the U.S. believes DeepSeek has obtained and is using H100 chips, possibly by routing them through Southeast Asian shell companies and offshore data centers to bypass export laws.
Data Privacy and Surveillance Concerns
Further complicating DeepSeek’s position is its alleged handling of user data. U.S. lawmakers have raised concerns that the firm transmits American users' data to China through backend systems linked to state-owned telecoms operator China Mobile. While DeepSeek has not responded to these allegations, Chinese law requires domestic firms to share data with government authorities upon request.
According to the senior official, this is more than just potential compliance — the firm is "willingly" providing support to Beijing’s intelligence and surveillance operations.
Such revelations could significantly impact the perception of DeepSeek's trustworthiness, especially as its models are hosted on major U.S. cloud platforms like Amazon, Microsoft Azure, and Google Cloud — platforms widely used by enterprise and individual customers around the world.
Linked to China’s Defense Infrastructure
U.S. government reviews also suggest DeepSeek is referenced in over 150 procurement documents tied to the People’s Liberation Army (PLA) and other defense-related bodies in China. This would indicate a deeper, ongoing integration of DeepSeek’s technology into the country’s defense ecosystem — a link that, if substantiated, could trigger export bans or sanctions under U.S. trade laws.
However, Reuters has not independently verified these procurement documents, and DeepSeek has not issued any public comment on the matter.
Chip Procurement Under the Microscope
While the exact scale of DeepSeek's access to restricted Nvidia chips remains unclear, three sources told Reuters the company possesses H100 chips acquired after the U.S. ban took effect. A previous claim that the company owns 50,000 units was called into question by both officials and analysts, though even smaller-scale possession raises compliance and enforcement concerns.
An Nvidia spokesperson clarified that their review found DeepSeek used H800 products — a version with lower performance, created specifically for the Chinese market — rather than restricted H100 chips.
In Singapore, authorities are already investigating three men linked to the alleged movement of restricted Nvidia chips to DeepSeek, further reinforcing international concerns about chip smuggling and export control violations.
Broader Implications for U.S.-China Tech Rivalry
The DeepSeek case underscores the complexities of enforcing export controls in a globalized tech ecosystem where computing can be outsourced, accessed remotely, and routed through multiple jurisdictions. It also reflects growing fears in the U.S. that Chinese AI advancements are outpacing expectations — sometimes with the help of Western technology.
Despite these concerns, DeepSeek has not yet been placed on any U.S. entity list, and there is no evidence that Nvidia knowingly supplied the firm with restricted hardware. However, the mounting allegations may pressure U.S. agencies to act more decisively.
Malaysia’s trade ministry has also opened its own inquiry into whether a Chinese company operating within the country is using Nvidia-equipped servers for AI development in violation of local or international laws.
Looking Ahead: Possible Consequences
The U.S. has not yet confirmed whether it will take regulatory or punitive actions against DeepSeek, but its growing visibility in both military procurement records and global AI infrastructure may bring the firm under tighter global scrutiny.
As U.S. export policy evolves and concerns about AI and national security mount, DeepSeek’s trajectory could serve as a litmus test for how aggressively Washington and its allies will move to contain the global spread of advanced AI technology tied to geopolitical rivals.