DHS Bans DeepSeek From US Civilian Agencies Over Data Security Concerns

Reviewed byNidhi Govil

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The Department of Homeland Security has ordered all US civilian agencies to remove DeepSeek AI technology from their systems, citing risks of sensitive data transfer to China. The sweeping ban also blocks the Chinese AI company from federal contracts and prohibits third-party services using DeepSeek models.

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The Department of Homeland Security has issued a comprehensive order banning DeepSeek from all US civilian agencies, marking a significant escalation in tech tension with China. The directive, signed by Homeland Security Secretary Markwayne Mullin on July 24 and published in the Federal Register, requires immediate removal of all DeepSeek products from federal IT systems

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National Security Measure Targets Chinese AI Company

The DHS ban encompasses civilian agencies including the Department of the Treasury, Department of State, and Department of Justice, though Department of Defense agencies remain excluded

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. The order was issued under the Federal Acquisition Supply Chain Security Act of 2018 after reviewing recommendations from the Federal Acquisition Security Council

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. DHS characterized the risks as potentially resulting in the "transfer of sensitive data" of US government employees and vendors to the People's Republic of China

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Remove DeepSeek From Systems: Sweeping Scope

The order's reach extends beyond direct DeepSeek products. Federal civilian agencies must also eliminate third-party services that integrate DeepSeek's open-source AI models

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. This affects US tech companies like Snowflake, Vercel, and OpenRouter, which incorporate DeepSeek in their customer offerings

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. DHS stated that DeepSeek's models could "contain malware or other security vulnerabilities," creating "multiple threat vectors"

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Foreign AI Technologies Under Scrutiny

The timing coincides with DeepSeek's release of its latest model, V4.1-Flash-1017, which the Chinese AI company promoted as "smarter, faster, more efficient"

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. DeepSeek has disrupted the AI market with dramatically lower development costs—approximately $6 million to train its debut model compared to OpenAI's roughly $100 million for GPT-4

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. These revelations previously sent tech stocks tumbling as startups flocked to the cost-effective open-source AI models.

Federal Acquisition Supply Chain Security Implications

The ban also prohibits DeepSeek from participating in any federal government contracts, effectively excluding Hangzhou DeepSeek Artificial Intelligence Co., Ltd and affiliated entities from federal procurements

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. The government cited concerns that DeepSeek collects substantial user data that could be passed to Beijing under Chinese security laws

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Model Distillation Accusations Fuel Tensions

US officials have accused Chinese AI labs of copying American models through model distillation, a technique where one model trains on another's outputs. Anthropic alleged in a September report that DeepSeek engaged in illicit distillation without permission, logging over 12 million exchanges tied to DeepSeek's distillation activity over two weeks in July 2026

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. OpenAI similarly told US lawmakers that DeepSeek used this method to build its R1 chatbot

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Broader Pattern of Sensitive Data Exposure Concerns

Several government entities had already restricted DeepSeek before the federal order. A Pentagon IT agency blocked its chatbot in January 2025, while the Commerce Department and Navy banned it on work devices

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. States including New York, Tennessee, and Virginia implemented similar measures. White House tech lead Michael Kratsios wrote in an internal memo earlier this year about "malicious exploitation" of American AI firms, primarily by rival firms in China

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Questions regarding the order should be directed to the FASCSA Order Implementation Team in the Cybersecurity and Infrastructure Security Agency's Cybersecurity Division

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. The Chinese embassy in Washington and DeepSeek have not responded to requests for comment

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