The U.S. Department of Homeland Security has ordered federal civilian agencies to stop purchasing products and services from Chinese AI startup DeepSeek and remove them from government IT systems, citing national security concerns tied to DeepSeek‘s operations in China. The order also covers third-party products and services built using DeepSeek technology, though agencies can request exceptions. The DHS warned that sensitive information from U.S. government users could potentially be accessible to Chinese authorities under Chinese law. The move extends earlier restrictions: a law passed in December 2025 already targeted DeepSeek‘s use in intelligence national security systems, and the latest order broadens the ban to federal civilian agencies, covering both new purchases and existing IT systems.

China’s Foreign Ministry spokesperson Mao Ning said Tuesday that Beijing opposes “overstretching the concept of national security and politicizing technology and trade issues,” and vowed to safeguard the legitimate rights and interests of Chinese enterprises. The order comes amid intensifying U.S.-China competition in AI, where DeepSeek‘s low-cost open-weight models have challenged rivals including OpenAI and Meta. Separately, China is reportedly considering export restrictions on 23 AI-related technologies, including chip designs and certain advanced AI models, according to a Bloomberg report last week.

DeepSeek has faced regulatory scrutiny globally since its R1 reasoning model shook the AI industry in January 2025, triggering a sharp sell-off in Nvidia shares. In September, the U.S. accused DeepSeek and five other Chinese AI companies, including Alibaba and Moonshot AI, of using large-scale model distillation to extract information from American AI systems. OpenAI and Anthropic have also separately raised concerns about DeepSeek‘s alleged use of model distillation. OpenAI told U.S. lawmakers that it had observed suspected attempts by DeepSeek to distill its models, while Anthropic said it had identified unauthorized attempts by DeepSeek and other Chinese AI labs to collect outputs from Claude.