US orders federal agencies to remove China’s DeepSeek AI from their systems

Federal agencies must replace DeepSeek AI products, impacting procurements and existing infrastructure.

The U.S. Department of Homeland Security has ordered all federal civilian agencies to cease purchasing services and products from Chinese AI startup DeepSeek and to remove existing DeepSeek technology from government IT systems. This directive stems from national security concerns, specifically regarding the potential for Chinese authorities to access sensitive U.S. government user data under Chinese law. The ban extends to third-party products and services that utilize DeepSeek technology, though exceptions can be requested. This action intensifies the ongoing AI technology competition between the U.S. and China. China's Foreign Ministry spokesperson criticized the move, calling it an overreach of national security and politicization of technology. The U.S. had previously restricted DeepSeek's use in intelligence systems via a December 2025 law, and this new order broadens the scope to all federal civilian agencies.

This directive signifies a significant escalation in U.S. efforts to counter perceived national security risks associated with Chinese AI development, particularly concerning data privacy and potential state access. By extending the ban to third-party products, the U.S. government is signaling a broad approach to mitigating these risks, even if it creates operational challenges for agencies. The inclusion of an exception process suggests a pragmatic approach, allowing for critical functionalities to remain while demanding transparency and risk mitigation from vendors. This move could also influence other countries and organizations to review their own use of AI technologies developed in China. The broader implications for the AI market include increased geopolitical friction and a potential bifurcation of AI ecosystems along national lines. DeepSeek's challenge to established Western AI players with low-cost open-weight models now faces direct governmental headwinds in a key market. This may force DeepSeek and other Chinese AI firms to re-evaluate their go-to-market strategies in Western economies and could spur further investment in domestic AI development within the U.S. and its allies to ensure technological sovereignty.