DeepSek Accused Of Helping China's Military And Smuggling US Chips

JAKARTA An artificial intelligence (AI) company from China, DeepSek, is accused of helping China's military and intelligence operations and trying to gain access to a US-made AI chip through a shell company in Southeast Asia. This was revealed by a senior US government official to Reuters.

Hangzhou-based DeepSek shocked the world of technology in January 2025 after claiming that their AI reasoning model was comparable and even superior to leading US models, at a much lower cost.

But now, DeepSee is accused:

Providing user data to the Chinese government,

Looking for loopholes to get US-made AI chips subject to export bans,

Having large amounts of access to Nvidia's advanced chips,

Involved in cooperation with the Chinese military and defense agencies.

"We understand that DeepSek has voluntarily provided and will most likely continue to provide support to China's military and intelligence operations," said an anonymous US State Department official.

He added that DeepSek's actions go beyond simply providing open access to its AI models, including sharing user data and statistics with Beijing's surveillance system.

The law in China does require all companies to submit data to the government if requested. However, the allegation that DeepSek has done so actively raises great concerns about the privacy of its tens of millions of users worldwide.

The US official also mentioned that DeepSek's name appeared more than 150 times in procurement documents belonging to the Chinese military and defense industry-related institutions, including providing technology services to research institutions belonging to the People's Liberation Army (PLA).

DeepSek has not yet responded to a request for comment regarding the allegation.

DeepSek is also suspected of using shell companies in Southeast Asia to circumvent US export bans and seek access to data centers that have advanced Nvidia chips, such as H100, remotely. The chip has been banned for sale to China since 2022 due to concerns that the chip could enhance the country's military capabilities or accelerate the advancement of its AI.

DeepSeek tried to access the chips through data centers in Southeast Asia and used fake companies to cover up their tracks, the official said, but declined to explain whether the effort was successful.

Nvidia stated that it does not support any entity that violates US export regulations. They also said that with current export restrictions, they have basically left the Chinese data center market, which is now dominated by Huawei and other companies.

There has been no announcement from the US government regarding possible additional sanctions against DeepSek.

Previously, US officials were investigating whether DeepSeek had illegal access to Nvidia chips. Although the CEO of one of the AI startups claims DeepSeek has up to 50,000 H100 chips, three sources say the true number is much smaller.

"We reviewed and found that DeepSeek only uses H800 products obtained legally, not H100," said an Nvidia spokesperson.

In February 2025, three men in Singapore were charged in a case of alleged fraud related to the shipment of the Nvidia chip, which is said to be local media linked to DeepSek.

Although state-of-the-art chips should not be exported directly to China, Chinese companies can still remotely access the chip through data centers in countries that are not included in the list of restrictions.

However, this exception does not apply if the Chinese company is blacklisted on US trade or if chipmakers find out that their chips are being used to develop weapons of mass destruction.

To date, DeepSek has not been blacklisted in US trade, and there is no indication that Nvidia is aware of DeepSek's involvement in military projects.

Meanwhile, Malaysia's Commerce Ministry last week said it was investigating a Chinese company suspected of using servers with Nvidia chips for a large language model training in the country, to ascertain if any local law violations occurred.