Federal civilian agencies ordered to stop buying and remove Chinese AI startup DeepSeek's products, DHS says

What happened

The federal government has told civilian agencies to stop purchasing products and services from Chinese AI startup DeepSeek and to remove them from government IT systems, TechCrunch reported on October 20, 2026. According to the Department of Homeland Security, the order is based on national security concerns tied to the company's operations in China.

The directive applies to new purchases and to technology already running on agency systems. It is one of several recent federal moves on artificial intelligence covered in our AI and tech section.

What the order covers

More than DeepSeek's own app

TechCrunch reported that the order reaches beyond DeepSeek's own product. It also covers third-party products and services built using DeepSeek technology. Agencies can ask for exceptions, according to the report.

The security concerns cited

According to the order, DHS raised concerns about how DeepSeek handles user data. It warned that sensitive information from U.S. government users could potentially be accessible to Chinese authorities under Chinese law, TechCrunch reported.

How it builds on earlier limits

This is not the first federal restriction on the company. TechCrunch noted that a law passed in December 2025 targeted DeepSeek's use in intelligence national security systems. The new order extends restrictions to federal civilian agencies.

China's response

Beijing objected to the move. Foreign Ministry spokesperson Mao Ning said Tuesday that China opposes "overstretching the concept of national security and politicizing technology and trade issues," according to an official briefing cited by TechCrunch.

Mao also said, "We will resolutely safeguard the legitimate rights and interests of Chinese enterprises," TechCrunch reported. Separately, Bloomberg reported last week that China is considering export restrictions on 23 AI-related technologies, including chip designs and certain advanced AI models, to address security and misuse risks.

Background on DeepSeek

A low-cost rival to U.S. AI firms

TechCrunch described the order as part of growing AI competition between the U.S. and China. DeepSeek challenges U.S. rivals such as OpenAI and Meta with low-cost open-weight models. The company has faced scrutiny from governments and regulators around the world since its R1 reasoning model shook the AI industry in January 2025 and triggered a sharp sell-off of Nvidia shares.

Distillation accusations

The U.S. accused DeepSeek and five other Chinese AI companies, including Alibaba and Moonshot AI, of using large-scale model distillation to extract information from American AI systems, according to a September report cited by TechCrunch. Distillation is a technique that uses the outputs of one AI model to train another.

OpenAI and Anthropic have separately raised similar concerns. Earlier this year, OpenAI told U.S. lawmakers it had seen suspected attempts by DeepSeek to distill its models, while Anthropic said it had identified unauthorized attempts by DeepSeek and other Chinese AI labs to collect outputs from its Claude model, TechCrunch reported. More federal policy coverage is available in our national news section.

What to watch next

• Whether agencies request exceptions to the order, which TechCrunch reported is allowed.
• How agencies remove DeepSeek products and DeepSeek-based third-party tools from existing government IT systems.
• Whether China moves forward with export restrictions on 23 AI-related technologies, which Bloomberg reported it is considering.
• What steps Beijing takes after saying it will safeguard the interests of Chinese companies.