A new U.S. House report on DeepSeek highlights how one Chinese AI model may be quietly reshaping global AI strategy — and risking American data privacy.
The House Select Committee on the CCP has released findings on DeepSeek’s R1 model, revealing:
- $420M in funding from High-Flyer Quant, a Chinese trading firm
- Access to 10,000+ NVIDIA A100 chips via the Firefly supercomputing infrastructure
- Ties to China's surveillance ecosystem, including China Mobile
- Allegations of illegal training data use and export control circumvention
- App behavior that mimics spyware: collecting device IDs, typing cadence, and chat history
Lawmakers warn that DeepSeek:
- Functions as an open-source intelligence asset for China
- Circumvented guardrails from U.S. AI companies to accelerate its own development
- Operates under a tightly controlled tech ecosystem with deep state-linked partnerships
An OpenAI exec told the committee that DeepSeek “circumvented guardrails to extract reasoning outputs,” accelerating their model using techniques like distillation — potentially copying U.S. tech at lower cost.
Even more concerning:
- User data is routed via infrastructure tied to China Mobile
- DeepSeek does not encrypt much of its traffic
- It censors content critical of the Chinese government
What this means:
- Export controls alone aren’t enough — the U.S. must improve early threat tracking
- Agencies should restrict procurement and usage of Chinese AI models
- More visibility and scrutiny are needed around AI supply chains and infrastructure
At Efani, we believe real AI security starts with understanding who’s behind the tools we use — and where our data ends up. This report is a wake-up call for all of us building or relying on AI systems today.
