Deep Trouble for DeepSeek—U.S. Unmasks AI Firm’s Military Web

Image Source: HPCwire

Chinese AI firm DeepSeek is in a state of extreme stress from the United States government following a string of bombshell charges that tied the firm to China's military and espionage efforts and attempts to circumvent U.S. export controls by employing Southeast Asian shell firms. The disclosures, first revealed publicly on June 23, 2025, by senior U.S. government officials, have raised issues related to national security and global AI regulation.

1. Allegations of Military Support and Data Sharing

DeepSeek has been helping China's intelligence and military establishments with AI technology, and possibly assisting surveillance, cyber operations, and battlefield decision-making, according to U.S. officials.
The firm has also been charged with passing user data to the Chinese government, which raised fears of privacy invasions and misuse of personal data.

2. Bypassing Export Controls via Shell Companies

DeepSeek allegedly attempted to circumvent American export controls by creating Southeast Asian shell companies in order to access proscribed American technology indirectly, including advanced AI chips.
These shell companies were allegedly used to mask procurement activity and conceal end-use of sensitive items.

3. Data Center Access Strategy

American intelligence reports that DeepSeek has been attempting to access Southeast Asian data centers in order to remotely control U.S.-origin chips, evading direct export controls.
This approach would allow the firm to train mass-scale AI models on cut-short hardware without shipping the chips to China physically.

4. Geopolitical and Regulator Implications

The allegations come as U.S.–China technology tensions have risen, and Washington has continued to try and limit the export of AI and semiconductor technology.

If true, the allegations could lead to sanctions, trade restrictions, or further blacklisting of DeepSeek and its subsidiaries.

Sources: Reuters