DeepSeek AI: Interesting Methods, Dangerous Product

Huge investments are being made into new infrastructure, methods and products for Artificial Intelligence

The Artificial Intelligence Ecosystem is evolving fast to put it mildly.  Fueled by intense amounts of pent up by piles of dry powder held over from 2020-2021, PE, VC and Corporate Funds have been dumping piles of money into the AI Ecosystem, from everything from the infrastructure to application layer of software.

Now that a tech arms race has moved more into the open between the United States and the People’s Republic of China, innovation funded by nation state incentives comes with trade-offs. DeepSeek, has captured the tech world’s attention for its ability to reduce computational requirements while delivering high-quality responses. However, as promising as this technology seems, its limitations, security risks, and compliance issues create significant hurdles for users in sensitive industries, particularly those in the U.S. federal government, national security and healthcare sectors.

Performance Issues: Censorship and the Chinese Government's Influence

Aside from compliance concerns, DeepSeek AI also faces performance issues linked to its origins in China. A growing number of reports indicate that the model is subject to government-imposed censorship, making it unsuitable for users seeking unbiased, unrestricted AI responses.

Several independent tests have demonstrated that DeepSeek AI systematically avoids answering questions about politically sensitive topics in China, such as the Tiananmen Square Massacre, the Uyghur crisis, and Hong Kong's democracy movement (Forbes, Futurism). Users who attempt to engage the model on these topics receive either vague, misleading responses or outright refusal to provide information.

For U.S. businesses and federal contractors, this raises serious questions about data sovereignty, bias, and reliability. If a tool's outputs are manipulated to align with Chinese government interests, it cannot be trusted to provide objective information in critical domains like national security, business intelligence, and legal analysis, or even topics required for medical care. DeepSeek AI is dangerous for Healthcare.

"The Big Hubbub" Around DeepSeek: How It Can Be Dangerous for Healthcare

DeepSeek called out Big Tech’s premise that more compute is the limiting factor for growing AI models and not different processes.  It also has called into question the premise behind US National Security moves to limit the amount of high-end semiconductors (and the tools/tech that manufacture those semiconductors) to be exported to the PRC.

DeepSeek AI employs a unique approach to optimizing computational efficiency. By selectively focusing on specific segments of data rather than processing entire datasets, it delivers high-quality responses while using fewer computational resources (ZDNet). This makes it an attractive option for organizations looking to reduce costs and energy consumption associated with AI inference.

However, this efficiency comes with significant downsides. By limiting the scope of information it processes, DeepSeek AI may omit critical details, particularly in complex tasks. In environments where accuracy and comprehensive analysis are non-negotiable—such as legal research, medical documentation, and government decision-making—these omissions could be highly problematic. Users relying on DeepSeek AI for tasks like medical record reviews or compliance-related assessments may find its responses incomplete or even misleading.

Compliance and Security Risks: DeepSeek AI and U.S. Regulations

DeepSeek’s potential for efficiency gains is overshadowed by serious compliance and security concerns, particularly for U.S. users. The tool was produced by a Chinese Company, and funded by High-Flyer, a Chinese company with ties to the Chinese government. This connection raises red flags, especially for U.S. federal contractors and businesses in other regulated industries like healthcare, energy, and other critical infrastructure sectors.  Typically regulators don’t smile upon using suspicious software produced by U.S. Adversaries.

DeepSeek AI is not just a technical innovation; it is also a product with serious compliance and security concerns. The model is backed by High-Flyer, a Chinese company with ties to the People’s Republic of China (Wikipedia). This presents a significant issue for U.S. organizations, particularly those that must comply with federal regulations such as HIPAA Compliance, FedRAMP Certification, and Section 889 of the Federal Acquisition Regulation (FAR).

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Risk to HIPAA Compliance and Private AI Needs

Healthcare and legal professionals must also be wary. DeepSeek AI lacks the transparency and security guarantees needed for HIPAA-compliant software. Secure AI tools that handle protected health information (PHI) must ensure data privacy, encryption, and adherence to strict access controls. Without clear evidence that DeepSeek AI meets these standards (and is backed by the PRC), using it in a HIPAA-covered environment could expose organizations to regulatory penalties and data breaches. Federally compliant AI tools—such as those built on FedRAMP-certified infrastructures—are the most secure solutions for companies handling sensitive legal and healthcare data.

Section 889 and Federal Contractor Restrictions

For U.S. federal contractors and entities handling sensitive government data, using DeepSeek AI may directly violate Section 889 of the FAR (Acquisition.gov). Section 889 restricts federal agencies and contractors from using telecommunications and technology equipment from companies linked to adversarial foreign governments. Given its Chinese ownership and potential security risks, DeepSeek AI could pose a direct compliance risk, leading to disqualification from government contracts and severe legal consequences.

Conclusion: Avoid DeepSeek AI, Prioritize Secure and Compliant AI Solutions

DeepSeek is a fascinating case study in the dual nature of technological progress. Its innovations in computational efficiency are interesting (don’t forget about wiping out ~10% of NVIDIA’s market cap in one day; don’t worry they’re recovering), but its limitations, security vulnerabilities, and ethical compromises make it a non-compliant choice for organizations. For U.S. users, using DeepSeek should be a no-no.

While DeepSeek AI presents an interesting technical approach to reducing computational costs, its limitations far outweigh its benefits for U.S. users. Performance gaps, security vulnerabilities, and regulatory risks make it an unsafe choice for federal contractors, healthcare providers, and legal professionals.

Instead of turning to DeepSeek AI, businesses should invest in secure AI models that meet HIPAA compliance, FedRAMP certification, and other federal regulations. By prioritizing private AI solutions with strong security frameworks, U.S. organizations can avoid the risks associated with foreign-controlled AI tools while maintaining efficiency and innovation in AI-driven operations.

As the global AI race accelerates, U.S. companies must ensure they are not sacrificing security and compliance for efficiency gains. DeepSeek AI may be an intriguing experiment, but for serious users in regulated industries, it is a risk not worth taking.

References

• "Apple researchers reveal the secret sauce behind DeepSeek AI." ZDNet. Retrieved from https://www.zdnet.com/article/apple-researchers-reveal-the-secret-sauce-behind-deepseek-ai/
• "Does DeepSeek censor its answers? We asked 5 questions on sensitive China topics." Forbes. Retrieved from https://www.forbes.com/sites/maryroeloffs/2025/01/27/does-deepseek-censor-its-answers-we-asked-5-questions-on-sensitive-china-topics/
• "DeepSeek AI answer Tiananmen Square massacre." Futurism. Retrieved from https://futurism.com/deepseek-ai-answer-tiananmen-square-massacre
• "High-Flyer." Wikipedia. Retrieved from https://en.wikipedia.org/wiki/High-Flyer
• "Section 889 Policies." Acquisition.gov. Retrieved from https://www.acquisition.gov/Section-889-Policies

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