Trouble continues for Chinese AI start-up DeepSeek, after a senior US official reportedly levelled fresh accusations against it.

Reuters reported the unnamed US official as saying that DeepSeek is aiding China’s military and intelligence operations, and it has sought to use Southeast Asian shell companies in order to access high-end semiconductors that cannot be shipped to China under US export regulations.

It should be remembered that Hangzhou-based DeepSeek gained popularity and publicity earlier this year when in late January it launched open-source AI models that perform on par with rival AI models from the US, but which it said were developed for a fraction of the cost.

Privacy concerns

But privacy issues soon surfaced, amid concerns about the data it collects.

In February, Feroot Security, an Ontario-based cybersecurity firm said it had uncovered “concerning code” within the DeepSeek platform that enables direct data transmission from DeepSeek to China Mobile servers.

That same month South Korea’s data agency temporarily suspended DeepSeek from the country’s app stores, with regulators citing privacy concerns.

Then in April South Korea’s data protection authority warned that DeepSeek had transferred user information and prompts without permission to companies in China and the US.

Then in June it was revealed that DeepSeek had begun hiring interns to process medical data as hospitals have begun adopting the company’s open-source models for use in clinical settings.

Last week Italy’s antitrust and consumer rights regulator opened a probe into DeepSeek for allegedly failing to warn users with sufficient clarity about the danger of false information arising from so-called “hallucinations” in its chatbot.

DeepSeek has also been banned on government devices in a number of countries over national security concerns, including South Korea, Italy, Taiwan, Australia, India and the United States.

And a host of other countries are said to be also probing the national security angle of DeepSeek, including, the UK, Belgium, France, Ireland and the Netherlands.

Chinese military

But now Reuters has reportedly been told by a senior US official that DeepSeek is helping China’s military and intelligence operations, and may have even used shell companies to help procure Nvidia chips that are otherwise covered by US export restrictions that prevent their sale to China,

“We understand that DeepSeek has willingly provided and will likely continue to provide support to China’s military and intelligence operations,” a senior State Department official told Reuters, reportedly adding the effort goes “above and beyond” open-source access to DeepSeek’s AI models.

According to the report, the US official alleged DeepSeek is using workarounds to get access to advanced Nvidia chips, evading export controls, and it has access to “large volumes” of Nvidia’s H100 chip, which has been covered by Washington export restrictions since 2022.

The US official also alleged that besides using Southeast Asia shell companies to get around the US export restrictions, DeepSeek also allegedly was trying to access data centres in Southeast Asia to remotely access US chips.