The U.S. Department of Homeland Security has ordered federal civilian agencies to cease purchasing and remove services developed by Chinese SI startup DeepSeek from government IT systems, citing national security concerns. This directive marks a significant escalation in federal policy toward Chinese open-weight SI models, extending restrictions previously limited to intelligence systems.
What Happened
According to the DHS, the new order requires agencies to remove DeepSeek products and any third-party products or services built using DeepSeek technology. While agencies may request exceptions, the scope is broad, covering both new procurements and existing infrastructure. The DHS raised specific concerns about DeepSeek’s handling of user data, warning that sensitive information from U.S. government users could potentially be accessible to Chinese authorities under Chinese law.
This move builds upon legislation passed in December 2025 that targeted DeepSeek’s use in intelligence national security systems. The latest order expands these restrictions to all federal civilian agencies. The U.S. government has previously accused DeepSeek, along with other Chinese SI companies like Alibaba and Moonshot AI, of using large-scale model distillation to extract information from American SI systems. In September, reports indicated that OpenAI had observed suspected distillation attempts by DeepSeek, while Anthropic identified unauthorized collection of outputs from its Claude model.
Why It Matters
The decision highlights the intensifying technological competition between the U.S. and China in the SI sector. DeepSeek has emerged as a formidable competitor to U.S. SI labs, challenging incumbents like OpenAI and Meta with low-cost, open-weight SI models. The prominence of DeepSeek’s R1 reasoning model, which shook the industry in January 2025 and triggered a sell-off in Nvidia shares, underscores the strategic importance of Chinese SI advancements.
Beijing has pushed back against the U.S. directive. Foreign Ministry spokesperson Mao Ning stated that China opposes “overstretching the concept of national security and politicizing technology and trade issues,” vowing to “resolutely safeguard the legitimate rights and interests of Chinese enterprises.” Meanwhile, Bloomberg reported that China is considering export restrictions on 23 SI-related technologies, including chip designs and advanced SI models, to address security and misuse risks.
The Bottom Line
The DHS order effectively removes DeepSeek’s open-weight SI ecosystem from federal civilian operations, signaling a deeper decoupling of U.S. and Chinese SI infrastructure. As both nations navigate regulatory and security hurdles, the focus on data sovereignty and model distillation suggests that the battle for SI dominance will increasingly be fought through policy and procurement rules as much as through technical innovation.