The Chinese app DeepSeek, which led to a massive $1 trillion drop in the U.S. stock market this week, is storing its rapidly expanding collection of American user data in China, presenting similar national security concerns that led to the crackdown on TikTok in Congress.
The AI-driven chatbot rose to the top of both the Apple App Store and Google Play Store charts on Tuesday. Since its launch on January 15, DeepSeek has been downloaded over 2 million times, with the majority of downloads occurring in just the past three days, as reported by AppMagic.
While other AI chatbots, like ChatGPT, gather large amounts of user data, experts have pointed out that DeepSeek’s use of Chinese-based servers — developed by Liang Wenfeng, a hedge fund investor with a background in mathematics — is a significant and concerning privacy issue for Americans.
Angela Zhang, a law professor at the University of Southern California who specializes in Chinese tech regulations, explained, “What sets this context apart is that DeepSeek is a Chinese company based in China.”
She continued, “This raises the question of whether the collection of data such as IP addresses and keystroke patterns could pose a national security threat.”
DeepSeek’s terms of service clearly state that user data is stored “in secure servers located in the People’s Republic of China.” The app also mentions that it automatically collects personal information, including “device model, operating system, keystroke patterns or rhythms, IP address, and system language.”
All companies operating in China are required to comply with the Chinese Communist Party’s cybersecurity laws, which mandate that they share data with the government when requested.
The concerns about DeepSeek’s connection to the Chinese government prompted the U.S. Navy to instruct its members to avoid using the app, CNBC reported on Tuesday.
A Navy spokesperson confirmed that an email was sent to “shipmates,” referencing the Department of the Navy’s Chief Information Officer’s generative AI policy, according to the report.
DeepSeek has also been found to exhibit signs of censorship and bias, including refusing to respond to questions about China’s President Xi Jinping, the 1989 Tiananmen Square massacre, the status of Taiwan, and human rights abuses against Uighurs in Xinjiang.
At times, the app starts to generate an answer but stops abruptly, stating that the prompt is “beyond [its] current scope.”
Concerns about data storage in China were central to the decision to pursue a ban of TikTok in the U.S., which was enforced this month after its parent company, ByteDance, failed to meet a January 19 deadline to divest its stake. Former President Trump had issued an executive order delaying the enforcement of the ban.
The bipartisan select committee on China in the House of Representatives, which led the efforts to ban TikTok, this week retweeted an image labeling DeepSeek as a “trojan horse.”
Rep. John Moolenaar (R-Mich.), chairman of the committee, stated that Congress should “work to swiftly place stronger export controls on technologies critical to DeepSeek’s AI infrastructure.”
“The US cannot allow CCP models such as DeepSeek to risk our national security and leverage our technology to advance their AI ambitions,” Moolenaar added in a statement.
Josh Kushner, whose venture firm Thrive Capital is a significant investor in OpenAI, criticized fellow technologists who were promoting DeepSeek, accusing it of being built with U.S. technology.
“’Pro America’ technologists openly supporting a Chinese model that was trained off of leading US frontier models, with chips that likely violate export controls, and – according to their own terms of service – take US customer data back to China,” Kushner wrote on X on Monday.
A day prior, Elon Musk tweeted that DeepSeek “obviously” had access to advanced Nvidia chips. Alexandr Wang of ScaleAI told CNBC that his company holds 50,000 advanced chips that it can’t publicly acknowledge due to export restrictions.
Wedbush analyst Dan Ives questioned claims that DeepSeek’s model was created with just $6 million in investment, without the next generation of Nvidia hardware, calling it “likely a fictional story.”
DeepSeek did not respond to The Post’s request for comment, and the company does not appear to have a dedicated public relations team yet.
“DeepSeek’s privacy policy, which can be found in English, makes it clear: user data, including conversations and generated responses, is stored on servers in China,” said Adrianus Warmenhoven, a cybersecurity expert at NordVPN.
“Users should consider whether their interactions or uploaded data might inadvertently contribute to machine learning processes, potentially leading to data misuse or the development of tools that could be exploited maliciously,” Warmenhoven added.
Sam Altman from OpenAI acknowledged that DeepSeek was “an impressive model” but promised that his company would “obviously” surpass it with future releases.
For context, OpenAI’s GPT-4 required over $100 million to develop, while Dario Amodei of Anthropic suggested that future models might cost $1 billion or more.
The revelations surrounding DeepSeek led to a sharp drop in U.S. market value, wiping out over $1 trillion as investors reevaluated the potential for Nvidia’s hardware to power AI models, now potentially less critical than previously believed.
The incident also sparked concerns about whether the U.S. has lost its perceived edge in the AI race to China.
Tech mogul Marc Andreessen remarked that DeepSeek’s emergence marked “AI’s Sputnik moment,” drawing a parallel to the Soviet Union’s 1957 launch of its satellite, which caught the U.S. off guard and spurred the space race.
{Matzav.com}
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