US Probes DeepSeek National Security Implications

The White House said US officials are investigating the national security implications of AI start-up DeepSeek after the company’s success in the US spurred a broad sell-off of technology stocks on Monday.

The National Security Council is reviewing the app’s implications, said White House press secretary Karoline Leavitt.

“This is a wake-up call to the American AI industry,” she said, echoing comments by Trump on Monday, and added that the administration is working to “ensure American AI dominance”.

Investors were spooked after DeepSeek’s inexpensively developed AI model rose to the top of Apple iPhone free download charts in the US over the weekend, driving a range of tech stocks sharply lower on Monday before they recovered somewhat on Tuesday.

Privacy concerns

The US administration’s AI and cryptocurrency lead David Sacks told Fox News it was “possible” that intellectual property theft had been involved in DeepSeek’s development.

He said US AI companies had “got a little distracted” and “maybe got a little bit complacent”.

Australia’s science minister, Ed Husic, warned that DeepSeek poses privacy concerns similar to those that have been raised around TikTok, which is also operated by a Chinese company.

He told Australia’s ABC News that the app poses unanswered questions around “data and privacy management”.

“I would be very careful about that, these type of issues need to be weighed up carefully,” he said.

Like other AI and social media apps, DeepSeek collects a range of information on users, including email addresses, phone numbers and dates of birth at sign-up, user inputs and technical data on users’ devices.

Western authorities have raised concerns that such data could be accessed by the Chinese government or that popular apps such as TikTok could be used to influence Western users.

Low-profile beginnings

The UK Information Commissioner’s Office (ICO) has urged the public to be aware of the rights around their information being used to train AI models.

“Generative AI developers and deployers need to make sure people have meaningful, concise and easily accessible information about the use of their personal data and have clear and effective processes for enabling people to exercise their information rights,” the ICO said in a statement.

“We will continue to engage with stakeholders on promoting effective transparency measures, without shying away from taking action when our regulatory expectations are ignored.”

DeepSeek was founded by 40-year-old Liang Wenfeng in 2023, who previously founded hedge fund High-Flyer Quantitative Investment Management in 2015.

High-Flyer began applying machine-learning techniques to computerised stock trading models, and for that purpose built up a stockpile of some 10,000 Nvidia A100 chips by 2022, according to a post by the company that summer on social media platform WeChat.

Those processors were banned from sale to China later that year.

In 2023, Liang told tech media outlet Waves that he was determined to push into AI and had the resources to do so, backed by some $8 billion (£6.4) in assets reportedly managed by High-Flyer, which is DeepSeek’s principal backer.

‘Driven by curiosity’

“People may think there’s some hidden business logic behind this, but it’s mainly driven by curiosity,” he said.

In another Waves interview in November 2024 he said he didn’t want Chinese AI to be in “the position of following forever”.

“We often say that there is a gap of one or two years between Chinese AI and the United States, but the real gap is the difference between originality and imitation,” he said.

“If this doesn’t change, China will always be only a follower — so some exploration is inescapable.”

DeepSeek has reportedly kept such a low profile until now that it does not have any public relations staff.

Its staff of mostly young university graduates have been taken by surprise at the worldwide interest in the platform, local media reported.