DeepSeek’s remarkable growth and the capability to compete with Western rivals in the artificial intelligence sector while keeping costs significantly lower has generated a buzz in the industry.
The speed at which the company has climbed to the top has sparked inquiries into how a startup managed to achieve market leadership so swiftly, seemingly bypassing restrictions that forbid Chinese companies from utilizing cutting-edge microchips available to US tech firms.
According to the Chinese company, they were able to develop an AI model in just two months, using Nvidia’s older chips and costing less than $6 million. They recently launched their iPhone application in the United States.
The chatbot has since become the most downloaded free app in the country – with its skyrocketing popularity seeing the value of its rival AI firms tumble and sending shockwaves through Wall Street.
China hawks have labelled it ‘Communist AI’, with a major concern among Western officials being the fact that the chatbot feeds users Chinese propaganda and disinformation. This includes on Taiwan, a potential flashpoint for future world wars, which it declares ‘an inalienable part of China’.
DeepSeek’s CEO and founder Liang Wenfeng has been held up as a national hero in China due to his defiance of American attempts to limit the country’s high-tech ambitions with the microchip ban.
On the day his app was launched in the US, Liang met with China’s prime minister Li Qiang at a gathering of business leaders to share his insights on the AI sector, according to state media.
China’s track record of utilising ostensibly private firms for spying, combined with the rapid rate US citizens have been downloading DeepSeek, has fuelled fears about Beijing’s ability to use China-based firms to access peoples’ private information.
The company will be able to collect information on users’ devices, typing patterns, IP address and more, experts have warned, and would have to hand this over to the Chinese government if instructed to do so.
Experts have now suggested that the company could have had Beijing’s help in sourcing powerful chips as part of the Chinese government’s drive to get ahead in its battle with the West for technological supremacy and harvest information on its enemies.
China’s answer to ChatGPT, DeepSeek, has rattled US tech giants with its impressive performance and tiny budget. But the app refuses to answer politically sensitive questions that violate China’s censorship rule
Pictured is Liang Wenfeng, the founder of Chinese AI startup DeepSeek, speaking at the symposium presided by Chinese Premier Li Qiang on January 20, 2025
Luke de Pulford, director of the Inter-Parliamentary Alliance on China, told MailOnline that the UK and US governments should be worried about the power that could give DeepSeek – and by extension the Chinese government.
‘As with TikTok, DeepSeek has the ability to collect masses of sensitive data, all of which is vulnerable to state interference,’ he said.
‘Aside from violations of data protection, this hands the Communist Party a strategic advantage – they can crunch and analyse intimate information on hundreds of millions of foreign nationals.’
He added that under the Chinese Communist Party’s doctrine of Military-Civil Fusion ‘the line between the private sector and state is increasingly blurred.’
Kayla Blomquist, a researcher at the Oxford Internet Institute and director of the Oxford China Policy Lab, agreed that the collection of people’s data on a mass scale is a possibility.
‘It’s very difficult, if not impossible, to know for sure that there are not backdoors built into a system, that there are not other methods of data exfiltration back to mainland China for strategic purposes on the government’s behalf,’ Blomquist told the BBC.
Shadow Security Minister Alicia Kearns said of DeepSeek: ‘There’s no such thing as low cost, because the security and privacy costs are extremely high – let alone the perverted prism through which many answers will be presented.
Compared to DeepSeek’s rival ChatGPT, the Chinese app produces responses that are closely aligned with Chinese Communist Party propaganda
‘AI may be the space race of our time, but this time every member of our community has a role to play.
‘If your data is going into the hands of the Chinese Communist Party, you’re helping them on this race as they suck every bit of detail about you that they can – even your keystrokes.’
Previously at the helm of one of China’s top hedge funds, High-Flyer, which focuses on AI-driven quantitative trading, the ‘nerdy’ Liang reportedly told colleagues of his plans to talking about build a 10,000-chip cluster to train his own models.
By 2022, his fund amassed a cluster of 10,000 of California-based Nvidia’s high-performance A100 processor chips that are used to build and run AI systems, according to a post that summer on Chinese social media platform WeChat .
Soon after, US officials announced they would ban the export of Nvidia’s chips to China, saying they needed to do so in order limit the spread of technology that could be used to make weapons.
Despite the ban, DeepSeek set up in 2023. The company now claims to have developed its open-source R1 model using around 2,000 Nvidia chips, just a fraction of the computing power generally thought necessary to train similar programmes.
When asked about Taiwan, DeepSeek states that the island is part of China and adds that ‘compatriots on both sides of the Taiwan Strait are connected by blood’
DeepSeek has said its recent models were built with Nvidia’s lower-performing H800 chips, which are not banned in China, sending a message that the fanciest hardware might not be needed for cutting-edge AI research.
Trump has since signed an order on his first day in office last week that said his administration would ‘identify and eliminate loopholes in existing export controls,’ signaling that he is likely to continue and the harden Biden administration’s approach.
Speaking Monday, Trump called the development ‘positive’ if true because ‘you won’t be spending as much and you’ll get the same result.’ He called the development a ‘wakeup call for our industries that we need to be laser focused on competing to win.’
Lennart Heim, a researcher at Rand Corp, said that ‘it’s the first time that we see a Chinese company being that close within a relatively short time period. I think that´s why a lot of people pay attention to it.’
The attention on DeepSeek also threatens to undermine a key strategy of US foreign policy in recent years to restrict the sale of American-designed AI semiconductors to China. Some experts on US-China relations don’t think that is an accident.
‘The technology innovation is real, but the timing of the release is political in nature,’ said Gregory Allen, director of the Wadhwani AI Center at the Center for Strategic and International Studies
The app refuses to answer any questions related to the Tiananmen Square massacre, ‘Tank Man’ (pictured), or the date of the massacre June 4, 1989
He added that with it, the Chinese are ‘trying to show that the export controls are futile or counterproductive is a really important goal of Chinese foreign policy right now.’
Another major concern about the growing popularity of DeepSeek is the information that it provides users with, which is heavily censored under Chinese law.
The chatbot says it is ‘programmed’ to provide answers that toe the Chinese government line, for example refusing to answer questions about Beijing’s crackdown on the 1989 Tiananmen Square protests and declaring that ‘Taiwan is an inalienable part of China’.
Leading Tory China hawk Bob Seely, a former member of Parliament’s Foreign Affairs Select Committee, said: ‘It is quite clear there is a battle for dominance in AI, the consequences of which will be profound for the world. China is clearly playing catch-up.
‘Its AI is also seeking to influence minds because it has been programmed not to provide answers or process topics that China’s Communist Party doesn’t want raised. Communist AI will, I suspect, be an increasing threat to freedom.’
