DeepSeek: China’s “National Treasure” Faces Global Regulatory Divisions

Introduction

DeepSeek, a Chinese artificial intelligence company, has emerged as a significant player in the global AI landscape, receiving dramatically different treatment across regions. While China has elevated it to “national treasure” status, Western nations have implemented various restrictions.

This stark contrast highlights the geopolitical dimensions of AI development and deployment, with different continents adopting varied approaches based on technological capabilities, economic priorities, and security concerns.

China’s National Treasure: Why DeepSeek Earned Special Status

Strategic Importance in China’s AI Ambitions

The Chinese government has officially designated DeepSeek as a “national treasure,” highlighting its strategic importance in China’s technological ecosystem.

This designation reflects China’s determination to establish leadership in artificial intelligence and reduce dependence on Western technology. DeepSeek represents a significant achievement for China’s technological self-sufficiency efforts, mainly as it has developed sophisticated AI models despite facing export controls on advanced chips from the United States.

Technological Breakthrough with Limited Resources

DeepSeek’s R1 model has garnered international acclaim for demonstrating capabilities comparable to Western alternatives while requiring significantly fewer resources.

The company claims to have trained its model for less than $6 million, a fraction of the estimated $100 million OpenAI spent developing GPT-4. This efficiency breakthrough challenges the conventional wisdom that cutting-edge AI development necessitates massive investments and access to the most advanced hardware.

The cost efficiency and performance of DeepSeek’s technology represent a “silver lining of financial and technological scarcity,” allowing it to operate “at a much lower cost and consume much less energy than its American peers.”

This achievement demonstrates that “with the right talent, a much smaller financial investment can obtain similar results,” undermining American assumptions about maintaining AI dominance through resource advantages.

Extraordinary Protection Measures

China’s designation of DeepSeek as a national treasure has led to unprecedented protective measures. Recent reports indicate that “DeepSeek engineers have handed in their China passports,” with the company taking possession of the passports of key employees, particularly those in research and development.

This travel restriction aims to prevent the disclosure of “confidential information that could constitute trade secrets or even state secrets.”

These protective measures come after the Chinese government issued broader directives “prohibiting AI experts and researchers from visiting the United States due to concerns of trade secret loss.”

The government has also increased its influence over DeepSeek’s operations, including having “a say in who is allowed to invest in DeepSeek,” indicating its determination to maintain control over what it considers a strategic national asset.

Western Restrictions: Security Concerns and Regulatory Challenges

Government-Level Bans in the United States

DeepSeek faces growing restrictions in the United States, particularly at the government level. Several US Commerce Department bureaus have prohibited using the Chinese AI model on government-issued devices, instructing employees to refrain from “downloading, viewing, or accessing any applications, desktop apps, or websites associated with DeepSeek.”

In February, Representatives Josh Gottheimer and Darin LaHood introduced legislation to ban DeepSeek on government devices, cautioning that using DeepSeek could “inadvertently share highly sensitive and proprietary information with the Chinese Communist Party, including contracts, documents, and financial records.” Several states, including Virginia, Texas, and New York, have already implemented their bans.

The US Navy has issued a directive specifically “banning DeepSeek’s AI from being used in any capacity, citing ‘potential security and data concerns’.” These measures reflect growing apprehension about data privacy and the potential exposure of sensitive government information.

European Union Scrutiny and Regulatory Actions

European Union regulators have also taken action against DeepSeek over data privacy concerns. Italy became “one of the first countries to ban DeepSeek’s AI” after its privacy watchdog sought information on how the company handles user data.

The Italian Data Protection Agency ordered “the restriction of the processing of data of Italian users” after receiving what it deemed “completely insufficient” answers to its questions.

EU data protection authorities scrutinize DeepSeek for potential General Data Protection Regulation (GDPR) violations.

While “DeepSeek has claimed that EU data privacy laws like the GDPR do not apply to the company, which is based in China,” regulators argue that “DeepSeek’s operations involve the processing of personal data of EU residents, thus making the GDPR and its extraterritorial scope applicable.”

Core Concerns Driving Restrictions

The primary concerns driving Western restrictions on DeepSeek revolve around data security and privacy. DeepSeek’s privacy policy explicitly states, “We store the information we collect in secure servers located in the People’s Republic of China.”

This has raised fears that “user data could be shared with the government in China, which has laws that require companies to share data with local intelligence agencies upon their request.”

These concerns draw parallels to previous restrictions on other Chinese technology platforms. The “data privacy and security concerns raised over DeepSeek use and the ban that followed in South Korea and other countries echoes the fate that TikTok, another Chinese app, met in several countries.”

Some observers ask if “DeepSeek is next in line for a TikTok-like US ban.”

DeepSeek’s Reception in the Global South

African Enthusiasm and Expectations

DeepSeek has received considerable enthusiasm in Africa, particularly for its potential to democratize access to AI technology.

The emergence of a cheaper AI model “raises hopes that Africa may be able to use the tech to solve social and economic issues.” South Africa has reportedly “embraced DeepSeek with open arms,” setting a potential precedent for other African nations.

African technology experts see DeepSeek as a way to overcome longstanding barriers to AI adoption. Kennedy Chengeta, an AI-focused entrepreneur based in Pretoria, observed that “cost has been one of the most significant barriers to AI adoption in Africa.”

DeepSeek’s more affordable approach could enable applications that “improve access to healthcare in rural areas, drive up financial inclusion… and help farmers identify diseases on crops”.

Some African technology leaders view DeepSeek as making “AI made in Africa” more achievable, with one expert expressing gratitude to “the Chinese people” for making African AI development “at arm’s length.”

The sentiment that “Deepseek is proving that open-source LLMs are leading the race” reflects optimism that more accessible AI models could enable African developers to focus on building valuable applications rather than struggling with the prohibitive costs of developing foundational models.

Latin America’s Cautious Opportunity

Latin American nations view DeepSeek as both an opportunity and a challenge. The Chinese AI chatbot is “transforming Latin America’s AI future” by offering a more accessible alternative to expensive Western AI systems.

For “lower-middle-income countries that often face budget constraints and barriers to accessing advanced technology,” DeepSeek “represents an unprecedented opportunity to enhance AI capabilities.”

However, Latin American experts recognize that this opportunity “comes with risk” and suggest that to “seize it safely and win AI independence, Latin America needs to start investing today in its capabilities”.

The region faces a critical decision point“DeepSeek could be a powerful tool for self-reliance, or a gateway to a new kind of digital dependence”.

India’s Middle Path Approach

India has crafted a distinctive approach to DeepSeek that attempts to balance the benefits of access with security concerns. “In a rare move, India has announced plans to host DeepSeek’s AI models on local servers to address privacy issues”.

This strategy leverages the open-source nature of some DeepSeek models while maintaining data sovereignty.

India’s Electronics and Information Technology Minister Ashwini Vaishnaw explicitly stated that “Data privacy issues regarding DeepSeek can be addressed by hosting open source models on Indian servers”.

This approach recognizes that while the application layer of DeepSeek might raise data security concerns, “running some of its AI models locally reportedly ensures that the company does not get its hands on sensitive user data”.

Global Impact and Future Implications

A “Sputnik Moment” for AI Development

Some observers have characterized DeepSeek’s emergence as a “Sputnik moment” in AI development, suggesting it represents a technological turning point similar to the Soviet Union’s launch of the first satellite in 1957.

This comparison highlights how DeepSeek has challenged assumptions about the resources required for cutting-edge AI development and potentially shifted the global technological balance.

DeepSeek’s approach might fundamentally change AI accessibility worldwide. Its model “suggests that the future of AI may not be a winner-takes-all contest but rather a delicate equilibrium between multiple, coexisting AI models and standards”.

By demonstrating that powerful AI can be developed with fewer resources, DeepSeek could “accelerate the shift toward a more decentralized AI ecosystem where developing economies could shape their own technological futures”.

Realigning Global AI Competition

DeepSeek has already had measurable impacts on global markets and corporate valuations. Its success “has driven a massive correction in what were stratospherically high valuations of US tech giants exposed to AI”.

Fears that major US tech firms could be undercut by DeepSeek’s approach led to market turbulence, with “the American chipmaking giant Nvidia shedding almost $600bn in market value during trading on the Nasdaq on Monday, the biggest single-day loss in US history”.

This market response reflects deeper concerns about “US hegemony in AI,” which “is no longer guaranteed”.

DeepSeek has demonstrated that “America’s reliance on export controls to contain China’s technology sector does not seem to be working”, potentially forcing a reconsideration of strategies for maintaining technological leadership.

Presidential Politics and Regulatory Evolution

Interestingly, there are divisions within the United States regarding how to respond to DeepSeek.

When asked if he sees DeepSeek as a national security threat, President Donald Trump reportedly said, “No,” adding that AI “will be a lot less expensive than people originally thought. That’s a good thing. I view that as a very good development, not a bad development”.

This stance appears to contrast with the actions of various government agencies and lawmakers who have moved to restrict DeepSeek. It also parallels Trump’s approach to TikTok, where he “paused the sell-or-ban law passed under the previous administration and gave the viral short video app an extra 75 days to find a solution”.

However, analysts suggest that “overwhelmingly his advisors… are for further restriction on DeepSeek,” indicating potential for policy shifts.

Conclusion

DeepSeek’s contrasting reception worldwide illustrates how artificial intelligence has become a focal point for geopolitical competition and national security concerns.

China’s designation of DeepSeek as a “national treasure” highlights the strategic value it places on AI development, particularly models that can compete globally despite resource constraints and export controls.

The response from Western nations, particularly the United States and European Union, demonstrates growing concerns about data privacy, national security, and the potential risks of AI systems connected to foreign governments.

These concerns have translated into various restrictions and bans, especially for government use.

Meanwhile, the Global South views DeepSeek through a different lens—as a potential democratizing force that could make advanced AI technology more accessible to regions with limited resources. Countries like India are pioneering middle-path approaches that attempt to capture benefits while mitigating risks.

As of March 2025, DeepSeek continues to reshape global perceptions of AI development and deployment. Its ultimate fate across different continents will likely depend on how individual nations balance technological opportunities against security concerns, and how DeepSeek itself addresses the regulatory challenges it faces in various jurisdictions.

What is clear is that AI technology has become inseparable from broader questions of national sovereignty, economic competition, and geopolitical power.