The probe, led by the U.S. National Security Council, comes amid growing concerns over data sovereignty and potential risks posed by the app’s rapid adoption.

DeepSeek R1, developed by a Chinese AI company, has upended the U.S. tech landscape by surpassing OpenAI’s ChatGPT in downloads on Apple’s App Store within days of its launch. Its success has sent shockwaves through the stock prices of major AI players, including chip manufacturers and rival chatbot providers.

U.S. government press secretary Karoline Leavitt confirmed the investigation, acknowledging that DeepSeek’s success had caught domestic AI developers off guard. “While we recognize the advancements in AI technology, our primary concern is ensuring national security and protecting sensitive data,” Leavitt stated. She reiterated President Donald Trump’s longstanding ambition for the U.S. to dominate the global AI sector, emphasizing the need to safeguard American interests.

The U.S. Navy has already taken preemptive action, banning the use of DeepSeek R1 across its operations. A Navy representative told CNBC that the policy aligns with broader restrictions on generative AI tools, citing concerns over data security and potential vulnerabilities.

DeepSeek’s rapid ascent has reignited debates over data sovereignty, reminiscent of the ongoing scrutiny surrounding TikTok, the ByteDance-owned social media platform. Unlike TikTok, however, DeepSeek has been transparent about its data practices, openly stating that its data centers are based in China.

According to Forbes contributor Zak Doffman, DeepSeek collects a vast array of user data, including sign-up information, search queries, chat histories, uploaded files, IP addresses, unique device identifiers, and cookies. Doffman argues that the breadth of data collected by DeepSeek is “much more powerful” than that gathered by TikTok, raising questions about the necessity and potential misuse of such information.

“The sheer volume of data DeepSeek collects goes beyond what is needed to operate the chatbot,” Doffman wrote in an editorial. “This raises significant concerns about how this data could be used, particularly given its storage and processing in China.”

DeepSeek’s success is not just a technological triumph but also a financial one. The company revealed that it developed its large language model in just two months at a cost of less than $6 million—a fraction of the billions spent by competitors like OpenAI and Google. This cost efficiency has allowed DeepSeek to undercut rivals while delivering a competitive product, further intensifying concerns about its impact on the U.S. tech industry.

The chatbot’s rapid adoption has also highlighted the vulnerabilities of American AI firms, which have struggled to keep pace with DeepSeek’s innovation and market penetration. Analysts warn that the U.S. risks falling behind in the global AI race if it fails to address these challenges.

As the national security probe unfolds, the U.S. government faces a delicate balancing act: addressing legitimate security concerns without stifling innovation or alienating international partners. The investigation could lead to stricter regulations on foreign AI technologies, mirroring the measures imposed on TikTok.

For now, DeepSeek’s future in the U.S. remains uncertain. While its technological prowess has earned it a loyal user base, its ties to China and data collection practices have made it a lightning rod for controversy. As the debate over data sovereignty and AI dominance intensifies, DeepSeek R1 has become a symbol of the broader geopolitical tensions shaping the tech landscape.

The DeepSeek saga underscores the high stakes of the global AI race, where technological innovation intersects with national security and economic competition. For the U.S., the challenge is clear: to maintain its leadership in AI while safeguarding its citizens and interests. As the investigation progresses, the world will be watching to see how the U.S. navigates this complex and rapidly evolving landscape.