The semiconductors cannot be shipped to China under US rules. Hangzhou-based DeepSeek sent shockwaves through the technology world in January, claiming its artificial intelligence reasoning models were on par with or better than US industry-leading models at a fraction of the cost.

"We understand that DeepSeek has willingly provided and will likely continue to provide support to China's military and intelligence operations," a Senior State Department official told Reuters in an interview.

"This effort goes above and beyond open-source access to DeepSeek's AI models," the official said, speaking on condition of anonymity in order to speak about US government information. The US government's assessment of DeepSeek's activities and links to the Chinese government have not been previously reported and come amid a wide-scale US-China trade war.

Among the allegations, the official said DeepSeek is sharing user information and statistics with Beijing's surveillance apparatus.
Chinese law requires companies operating in China to provide data to the government when requested. But the suggestion that DeepSeek is already doing so is likely to raise privacy and other concerns for the firm's tens of millions of daily global users. The US also maintains restrictions on companies it believes are linked to China's military-industrial complex
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US lawmakers have previously said that DeepSeek, based on its privacy disclosure statements, transmits American users' data to China through "backend infrastructure" connected to China Mobile, a Chinese state-owned telecommunications giant.
DeepSeek did not respond to questions about its privacy practices.
The company is also referenced more than 150 times in procurement records for China's People's Liberation Army (PLA) and other entities affiliated with the Chinese defense industrial base, said the official, adding that DeepSeek had provided technology services to PLA research institutions.

Reuters could not independently verify the procurement data. The official also said the company was employing workarounds to US export controls to gain access to advanced US-made chips. The US conclusions reflect a growing skepticism in Washington that the capabilities behind the rapid rise of one of China's flagship AI enterprises may have been exaggerated and relied heavily on US technology.

DeepSeek has access to "large volumes" of US firm, Nvidia's high-end H100 chips, said the official. Since 2022 those chips have been under US export restrictions due to Washington's concerns that China could use them to advance its military capabilities or jump ahead in the AI race.

"DeepSeek sought to use shell companies in Southeast Asia to evade export controls, and DeepSeek is seeking to access data centers in Southeast Asia to remotely access US chips," the official said. The official declined to say if DeepSeek had successfully evaded export controls or offer further details about the shell companies.

DeepSeek also did not respond to questions about its acquisition of Nvidia chips or the alleged use of shell companies.
When asked if the US would implement further export controls or sanctions against DeepSeek, the official said the department had "nothing to announce at this time."

--Reuters--