DeepSeek Caught Feeding China’s War Machine, U.S. Says - TipRanks.com

Jun 27, 2025

Chinese AI firm DeepSeek is under fire. A senior U.S. State Department official told Reuters the company is actively aiding China’s military and intelligence operations, while working around U.S. export controls to access restricted high-end AI chips.

DeepSeek made the news in January after claiming its AI reasoning models rivaled or even outperformed U.S. industry leaders—at a fraction of the cost. But behind the public fanfare, U.S. officials say a different story was unfolding.

“We understand that DeepSeek has willingly provided, and is likely to continue providing, support to China’s military and intelligence operations,” a senior U.S. official told Reuters, speaking on condition of anonymity. The activities go well beyond open-source access to DeepSeek’s models, the official added.

The U.S. government’s internal assessment has not been previously reported. The claims arrive amid a high-stakes U.S.-China tech war, where AI capabilities are viewed as a pillar of geopolitical dominance.

Among the key allegations: DeepSeek is reportedly sharing user data and analytics directly with Chinese surveillance agencies. Under Chinese law, companies are required to hand over data when asked—but U.S. officials say DeepSeek has already taken that step proactively.

With tens of millions of global users, many of them outside China, the privacy implications are severe. U.S. lawmakers have previously accused DeepSeek of transmitting American user data through backend systems linked to China Mobile, a Chinese state-owned telecom giant.

The company declined to respond to questions about its data practices.

The firm has also appeared over 150 times in Chinese military procurement records, according to the same U.S. official. DeepSeek, the official says, has supplied technology to institutions tied to the People’s Liberation Army and China’s defense industrial base.

Reuters could not independently verify the procurement documents. DeepSeek has not commented on the claims.

The most serious accusation may be how DeepSeek is allegedly working to evade U.S. export controls. Since 2022, Washington has restricted the sale of Nvidia’s (NVDA) high-end H100 chips to China over fears they would fuel military AI projects.

But according to the U.S. official, DeepSeek has accessed “large volumes” of those chips—by attempting to route purchases through shell companies in Southeast Asia and remotely access U.S. data centers.

“DeepSeek sought to use shell companies in Southeast Asia to evade export controls,” the official said. “They’re also seeking to access data centers in the region to tap into U.S. chips remotely.”

When asked if DeepSeek had succeeded in bypassing restrictions, the official declined to comment.

So far, the U.S. has not taken public action against DeepSeek, but that may change. When pressed, the State Department told Reuters it had “nothing to announce at this time” regarding further sanctions or new export rules targeting the company.

The growing scrutiny reflects Washington’s deeper concern: that China’s rapid AI progress, touted by startups like DeepSeek, may be less homegrown than it appears, and heavily dependent on U.S. technology.

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