Chinese AI startup DeepSeek is under intense scrutiny. U.S. officials are investigating whether it acquired advanced Nvidia chips through backdoor channels, potentially dodging U.S. sanctions.
Although DeepSeek asserts that its ground-breaking AI model, R1, was created on older, lawfully acquired A100 processors, its performance has drawn scrutiny. According to a Bloomberg report, some experts and lawmakers suspect the company used more powerful, restricted Nvidia chips to achieve its rapid success.
DeepSeek's AI assistant recently became the most downloaded free app on Apple's App Store, overtaking ChatGPT. The model's efficiency and low cost have sparked concerns over whether the startup had access to advanced Western technology despite U.S. export restrictions designed to limit China's AI advancements.
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U.S. Lawmakers Push for Action
Leading the House Select Committee on China, Republicans John Moolenaar and Raja Krishnamoorthi have called on National Security Advisor Michael Waltz to strengthen export restrictions on Nvidia’s H20 chips, which DeepSeek is suspected of using. They argue that China's rapid AI advancements pose a national security risk, calling for stricter measures to prevent access to cutting-edge U.S. technology.
According to Axios, the U.S. House of Representatives has cautioned legislative offices against using DeepSeek, indicating growing concerns about data security and possible abuse of AI-powered applications.
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Kevin O'Leary: “Wake Up, America”
Shark Tank and potential TikTok investor Kevin O'Leary has been vocal about his skepticism toward DeepSeek. He called it a “state-sponsored power play” that uses illegal Nvidia chips and warned on social media that the United States and China are engaged in an economic war. He likened it to other Chinese apps, such as Lemon8 and “Mao's Little Red Book,” which he claims are Trojan horses for mass data collection.
During a CNN interview with Erin Burnett, O'Leary doubled down, outright rejecting DeepSeek's claim that it built its AI model with just $6 million and outdated hardware.
“I call BS on that,” O’Leary said. “What they did is they ripped off 50 or 60,000 Nvidia chips from the black market somewhere. This is a state-sponsored enterprise.”
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He further alleged that DeepSeek's free AI assistant is designed to scrape user data, making it a surveillance tool disguised as a chatbot. O'Leary compared it to TikTok, suggesting that if China anticipates losing access to American data through TikTok, it will push alternative platforms like DeepSeek and other Chinese-owned apps.
Microsoft is also investigating whether DeepSeek improperly accessed OpenAI data, which has heightened the controversy even further. DeepSeek’s abrupt growth has already had a major financial impact. Nvidia’s market value dropped by around $600 billion as investors questioned whether investing in AI infrastructure was warranted, given that DeepSeek's AI is much cheaper and just as good.
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