The United States government has ordered civilian federal agencies to remove DeepSeek, the Chinese artificial intelligence platform, from their information technology systems, citing potential national security and data privacy risks. The order also prohibits agencies from purchasing DeepSeek products and third-party services built using its technology, marking another escalation in Washington’s scrutiny of Chinese technology companies.
Why Has the US Banned DeepSeek?
The US Department of Homeland Security (DHS) said DeepSeek’s AI models present multiple security risks. Officials warned that information entered by government employees or contractors could potentially be transferred to China, exposing sensitive government or personal data.
The department also raised concerns that the technology could generate actionable intelligence about American individuals or government agencies. Potential malware and software vulnerabilities were additional concerns cited in the order.
The restrictions apply to DeepSeek products and those developed by affiliated entities, as well as third-party products and services incorporating DeepSeek implementations. The order covers federal civilian agency IT systems and procurement. It does not represent a blanket ban on DeepSeek for every American citizen or private business.
Earlier Restrictions Had Already Been Introduced
The latest directive builds on earlier efforts to restrict DeepSeek within government organisations. Several federal agencies, including the Department of Commerce and the US Navy, had already prohibited its use on government devices. States such as New York, Tennessee and Virginia have also introduced restrictions.
The DHS order was issued under the Federal Acquisition Supply Chain Security Act of 2018, which allows the government to address security risks associated with information technology products and services used in federal systems.
The move reflects growing concerns in Washington about the security implications of using technology developed by Chinese companies, particularly in sensitive government environments.
DeepSeek’s Market Shock in 2025
DeepSeek previously attracted global attention in January 2025 after launching a low-cost AI model that challenged assumptions about the enormous computing investments required to compete with leading American AI companies.
The launch triggered a sharp sell-off in technology stocks. Nvidia alone lost approximately $593 billion in market value in a single trading session, at the time a record daily loss for a company. The wider market reaction reflected investor concerns about whether expensive AI infrastructure investments would generate the returns previously expected.
DeepSeek’s rise demonstrated that Chinese AI developers could compete aggressively on performance and cost, intensifying competition with companies such as OpenAI, Google and Anthropic.
What Happens Next?
The latest restrictions could encourage federal agencies and their technology suppliers to review AI tools embedded in their software and workflows. Companies serving government customers may also need to assess whether third-party products use DeepSeek technology.
For the wider AI industry, the decision highlights how data governance, cybersecurity and geopolitical tensions are becoming as important as model performance and pricing.
Summary
The US Department of Homeland Security has ordered federal civilian agencies to remove DeepSeek AI products and related third-party services from their IT systems, citing potential data transfers to China, intelligence risks and software vulnerabilities. The restrictions also prohibit future purchases of covered products. The action expands earlier government restrictions and underscores rising US-China competition in artificial intelligence.
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