US officials probe China’s DeepSeek AI amid security and privacy scrutiny

Market reactions and competitive pressure

The emergence of DeepSeek has already rattled the tech industry. On Monday, global investors dumped shares of major US AI companies, fearing the rise of a low-cost Chinese competitor. DeepSeek, which presents itself as a budget-friendly alternative to AI models like OpenAI’s ChatGPT, has quickly gained traction — briefly overtaking ChatGPT as the top AI assistant on Apple’s App Store in the US.

“More pressing for companies, however, is that, due to its cost-effectiveness, we are likely to see various products and companies adopt DeepSeek, which potentially carries significant privacy risks,” Wisniewski added. “As with any other AI model, it will be critical for companies to make a thorough risk assessment, which extends to any products and suppliers that may incorporate DeepSeek or any future LLM. They also need to be certain they have the right expertise to make an informed decision.”

Despite the concerns, Trump framed the development as an opportunity for American firms to step-up their innovation efforts. “The release of DeepSeek AI from a Chinese company should be a wake-up call for our industries,” Trump told House Republicans at their annual policy retreat. “We need to be laser-focused on competing to win.”