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LATEST NEWS

Multiple agencies investigating DeepSeek over privacy and regulatory violations

Marijan Hassan - Tech Journalist

It's been an interesting couple of weeks for DeepSeek AI. The Chinese generative AI model which has taken the tech world by storm, is now under investigation by multiple privacy agencies over alleged data collection and regulatory violations.



DeepSeek's rapid rise

Just when you thought generative AI couldn't generate as much hype, then comes DeepSeek, and suddenly there's nothing else people can talk about.


Specifically, people can't get over how cheap it was to develop the model compared to American competitors like ChatGPT, Gemini, Llama, etc. According to reports, DeepSeek V3 only cost $6 million in training compute.


The reports have been debunked, but thanks to all the press coverage DeepSeek user base has exploded, with the model even gaining Microsoft's attention. Last week, the giant software maker made the Chinese model available on its Azure cloud computing platform and GitHub tool for developers, joining more than 1,800 models that Microsoft is offering.

DeepSeek also launched a free assistant in the US last week, and it's now the most downloaded app on Apple’s app store surpassing even ChatGPT.


DeepSeek privacy controversy

Despite this success, concerns over data privacy have cast a shadow over DeepSeek’s adoption. As we speak, authorities from Ireland, France, the Netherlands, and South Korea have all launched probes into the AI startup’s data practices.


In a statement to the press Aleid Wolfsen, chairman of Dutch privacy watchdog (AP) warned users to exercise caution while using the model.


"The AP is (issuing this) warning because of the serious concerns that there are over DeepSeek's privacy policies ... and the way in which it appears to use personal information," he said in a statement.


DeepSeek is storing its user data in China which will be a big hurdle for its European and US adoption. Italy's regulator has already blocked the app in the country.


US national security investigations

As privacy investigations intensify, the US government is reportedly launching its probe into DeepSeek, focusing on potential violations of AI chip export restrictions. American authorities are looking into whether the Chinese AI startup has used restricted U.S.-made chips, such as Nvidia’s high-performance AI processors, which are subject to strict export controls.


Sources indicate that organized AI chip smuggling to China has been tracked through intermediaries in Malaysia, Singapore, and the United Arab Emirates.


Cybersecurity breach exposed

Adding to its woes, cybersecurity firm Wiz has brought to light a potential data breach involving the Chinese company.


In a blog post published Wednesday, Wiz reported that scans of DeepSeek’s infrastructure revealed more than a million lines of unsecured data, including digital software keys and chat logs capturing user interactions with the AI assistant. Wiz’s chief technology officer confirmed that DeepSeek promptly secured the exposed data after being alerted.


Looking ahead

DeepSeek’s meteoric rise highlights the growing global influence of Chinese AI models, but the company now faces mounting scrutiny from regulators and security experts. Will the company fight back in an attempt to get the European and US markets or will it withdraw to focus on the Chinese market? That’s the big question.

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