Chinese AI Startup DeepSeek Sparks Selloff in Global Markets with New Model Taking Aim at Tech Giants

China's AI chatbot, DeepSeek, has quickly risen to global prominence, surpassing ChatGPT as the most popular AI app on Apple’s App Store. Offered at a significantly lower cost than its competitors, DeepSeek reportedly operates on just $5.6 million for its R1 reasoning model, whereas OpenAI’s GPT-4 requires over $100 million. However, concerns regarding censorship and data privacy have cast a shadow over its success, drawing scrutiny from global regulators.

Censorship Concerns

DeepSeek has been criticized for blocking responses on politically sensitive topics, particularly those related to the Chinese government. Reports indicate that when questioned about the zero-COVID policy, DeepSeek initially provided a response but then erased it, replacing it with:

"Sorry, that's beyond my current scope. Let's talk about something else."

When asked the same question in Chinese, the AI simply responded:

"Sorry, I have not yet learned how to think about this type of question."

Other sensitive topics, such as the Indo-China war, human rights concerns in Xinjiang, and the Tiananmen Square protests, elicited similar evasive responses. When prompted for historical accounts of Arunachal Pradesh and Kashmir, DeepSeek refused to engage, stating that the subjects were "beyond its scope."

Interestingly, when asked about Russia’s invasion of Ukraine, DeepSeek acknowledged in English that the conflict was driven by "historical, geopolitical, and ideological" factors. This response contradicts China’s official stance, which avoids calling it an invasion and instead aligns with Russia’s terminology—“special military operation.”

Data Privacy Issues

DeepSeek’s privacy policies have raised significant alarm among cybersecurity experts and governments worldwide. The AI collects vast amounts of personal data and stores it on China-based servers, sparking concerns about user privacy and potential misuse of data.

Data Collected by DeepSeek

According to its privacy policy, DeepSeek gathers:

• Personal details: Name, email, phone number, date of birth
• User input: Text, voice commands, uploaded files, and chat history
• Device information: Phone model, operating system, IP address, and keystroke patterns

These extensive data collection practices suggest that DeepSeek could be tracking users beyond their chatbot interactions. Lauren Hendry Parsons, a digital privacy expert at ExpressVPN, has described the company’s policy of monitoring users’ actions outside the platform as "super scary."

International Reactions

Several countries have expressed concerns over DeepSeek’s privacy policies and potential national security risks.

• Italy has initiated an investigation into DeepSeek due to potential risks to the data of millions of users.
• Australia’s Science Minister, Ed Husic, has advised users to "weigh privacy risks carefully" before using the app.
• India is closely monitoring DeepSeek, fearing that Indian users’ data may be compromised. Given DeepSeek’s ties to China, officials worry about possible data misuse. India has already banned TikTok, WeChat, and several other Chinese apps in 2020 over national security concerns, and DeepSeek could face similar action if privacy risks persist.

Is DeepSeek Safe to Use?

Former U.S. President Donald Trump described DeepSeek as a "wake-up call" for the AI industry, acknowledging its cost-effectiveness but stopping short of labeling it a national security threat. However, experts remain deeply concerned about its data retention policy. DeepSeek states that user data is stored "as long as necessary" but fails to specify the exact duration or whether the data will ever be permanently deleted.

Further fueling concerns, DeepSeek suffered a large-scale cyberattack shortly after its launch on January 20, forcing the company to limit new registrations. This security breach has intensified doubts regarding the app’s ability to protect user data.

Final Thoughts

While DeepSeek presents an affordable alternative to ChatGPT and Google’s Gemini, its censorship practices and extensive data collection policies have raised serious concerns worldwide. As more governments and cybersecurity experts scrutinize the platform, users are advised to exercise caution when sharing personal information online.