Microsoft has openly said that its workers are not allowed to use the DeepSeek app. This announcement came from Brad Smith, the company’s Vice Chairman and President, during a recent hearing in the U.S. Senate. He said the decision was made because of serious concerns about user privacy and the risk of biased content being shared through the app.
According to Smith, Microsoft does not allow DeepSeek on company devices and hasn’t included the app in its official store either. Although other organizations and even governments have taken similar steps, this is the first time Microsoft has spoken publicly about such a restriction.
The main worry is where the app stores user data. DeepSeek's privacy terms say that all user information is saved on servers based in China. This is important because Chinese laws require companies to hand over data if asked by the government. That means any data stored through DeepSeek could be accessed by Chinese authorities.
Another major issue is how the app answers questions. It’s been noted that DeepSeek avoids topics that the Chinese government sees as sensitive. This has led to fears that the app’s responses might be influenced by government-approved messaging instead of being neutral or fact-based.
Interestingly, even though Microsoft is blocking the app itself, it did allow DeepSeek’s AI model—called R1—to be used through its Azure cloud service earlier this year. But that version works differently. Developers can download it and run it on their own servers without sending any data back to China. This makes it more secure, at least in terms of data storage.
However, there are still other risks involved. Even if the model is hosted outside China, it might still share biased content or produce low-quality or unsafe code.
At the Senate hearing, Smith added that Microsoft took extra steps to make the model safer before making it available. He said the company made internal changes to reduce any harmful behavior from the model, but didn’t go into detail about what those changes were.
When DeepSeek was first added to Azure, Microsoft said the model had passed safety checks and gone through deep testing to make sure it met company standards.
Some people have pointed out that DeepSeek could be seen as a competitor to Microsoft’s own chatbot, Copilot. But Microsoft doesn’t block every competing chatbot. For example, Perplexity is available in the Windows app store. Still, some other popular apps, like Google’s Chrome browser and its Gemini chatbot, weren’t found during a search of the store.
The latest "Qwen2.5-Omni-7B" is a multimodal model- it can process inputs like audio/video, text, and images- while also creating real-time text and natural speech responses, Alibaba’s cloud website reports. It also said that the model can be used on edge devices such as smartphones, providing higher efficiency without giving up on performance.
According to Alibaba, the “unique combination makes it the perfect foundation for developing agile, cost-effective AI agents that deliver tangible value, especially intelligent voice applications.” For instance, the AI can be used to assist visually impaired individuals to navigate their environment via real-time audio description.
The latest model is open-sourced on forums GitHub and Hugging Face, after a rising trend in China post DeepSeek breakthrough R1 model open-source. Open-source means a software in which the source code is created freely on web for potential modification and redistribution.
In recent years, Alibaba claims it has open-sourced more that 200 generative AI models. In the noise of China’s AI dominance intensified by DeepSeek due to its shoe string budget and capabilities, Alibaba and genAI competitors are also releasing new, cost-cutting models and services an exceptional case.
Last week, Chinese tech mammoth Baidu launched a new multimodal foundational model and its first reasoning-based model. Likewise, Alibaba introduced its updated Qwen 2.5 AI model in January and also launched a new variant of its AI assistant tool Quark this month.
Alibaba has also made strong commitments to its AI plan, recently, it announced a plan to put $53 billion in its cloud computing and AI infrastructure over the next three years, even surpassing its spending in the space over the past decade.
CNBC talked with Kai Wang, Asia Senior equity analyst at Morningstar, Mr Kai told CNBC that “large Chinese tech players such as Alibaba, which build data centers to meet the computing needs of AI in addition to building their own LLMs, are well positioned to benefit from China's post-DeepSeek AI boom.” According to CNBC, “Alibaba secured a major win for its AI business last month when it confirmed that the company was partnering with Apple to roll out AI integration for iPhones sold in China.”
European authorities are raising concerns about DeepSeek, a thriving Chinese artificial intelligence (AI) company, due to its data practices. Italy, Ireland, Belgium, Netherlands, France regulators are examining the data collection methods of this firm, seeing whether they comply with the European General Data Protection Regulation or, if they also might consider that personal data is anyway transferred unlawfully to China.
Hence, due to these issues, the Italian authority has released a temporary restrainment to access the DeepSeek chatbot R1 for the time-being under which investigation will be conducted on what and how data get used, and how much has affected training in the AI model.
What Type of Data Does DeepSeek Actually Collect?
DeepSeek collects three main forms of information from the user:
1. Personal data such as names and emails.
2. Device-related data, including IP addresses.
3. Data from third parties, such as Apple or Google logins.
Moreover, there is an action that an app would be able to opt to take if at all that user was active elsewhere on those devices for "Community Security." Unlike many companies I have said where there are actual timelines or limits on data retention, it is stated that retention of data can happen indefinitely by DeepSeek. This can also include possible sharing with others-advertisers, analytics firms, governments, and copyright holders.
Noting that most AI companies like the case of OpenAI's ChatGPT and Anthropic's Claude have met such privacy issues, experts would observe that DeepSeek doesn't expressly provide users the rights to deletion or restrictions on its use of their data as mandated requirement in the GDPR.
The Collected Data Where it Goes
One of major problems of DeepSeek is that it saves user data in China. Supposedly, the company has secure security measures in place for the data set and observes local laws for data transfer, but from a legal perspective, there is no valid basis being presented by DeepSeek concerning the storing of data from its European users outside the EU.
According to the EDPB, privacy laws in China lay more importance on "stability of community than that of individual privacy," thus permitting broadly-reaching access to personal data for purposes such as national security or criminal investigations. Yet it is not clear whether that of foreign users will be treated differently than that of Chinese citizens.
Cybersecurity and Privacy Threats
As accentuated by cyber crime indices in 2024, China is one of the countries most vulnerable to cyberattacks. Cisco's latest report shows that DeepSeek's AI model does not have such strong security against hacking attempts. Other AI models can block at least some "jailbreak" cyberattacks, while DeepSeek turned out to be completely vulnerable to such assaults, which have made it softer for manipulation.
Should Users Worry?
According to experts, users ought to exercise caution when using DeepSeek and avoid sharing highly sensitive personal details. The uncertain policies of the company with respect to data protection, storage in China, and relatively weak security defenses could avail pretty heavy risks to users' privacy and as such warrant such caution.
European regulators will then determine whether DeepSeek will be allowed to conduct business in the EU as investigations continue. Until then, users should weigh risks against their possible exposure when interacting with the platform.
The Ministry of Finance, under Nirmala Sitharaman’s leadership, has issued a directive prohibiting employees from using artificial intelligence (AI) tools such as ChatGPT and DeepSeek for official work. The decision comes over concerns about data security as these AI-powered platforms process and store information externally, potentially putting confidential government data at risk.
Why Has the Finance Ministry Banned AI Tools?
AI chatbots and virtual assistants have gained popularity for their ability to generate text, answer questions, and assist with tasks. However, since these tools rely on cloud-based processing, there is a risk that sensitive government information could be exposed or accessed by unauthorized parties.
The ministry’s concern is that official documents, financial records, and policy decisions could unintentionally be shared with external AI systems, making them vulnerable to cyber threats or misuse. By restricting their use, the government aims to safeguard national data and prevent potential security breaches.
Public Reactions and Social Media Buzz
The announcement quickly sparked discussions online, with many users sharing humorous takes on the decision. Some questioned how government employees would manage their workload without AI assistance, while others speculated whether Indian AI tools like Ola Krutrim might be an approved alternative.
A few of the popular reactions included:
1. "How will they complete work on time now?"
2. "So, only Ola Krutrim is allowed?"
3. "The Finance Ministry is switching back to traditional methods."
4. "India should develop its own AI instead of relying on foreign tools."
India’s Position in the Global AI Race
With AI development accelerating worldwide, several countries are striving to build their own advanced models. China’s DeepSeek has emerged as a major competitor to OpenAI’s ChatGPT and Google’s Gemini, increasing the competition in the field.
The U.S. has imposed trade restrictions on Chinese AI technology, leading to growing tensions in the tech industry. Meanwhile, India has yet to launch an AI model capable of competing globally, but the government’s interest in regulating AI suggests that future developments could be on the horizon.
While the Finance Ministry’s move prioritizes data security, it also raises questions about efficiency. AI tools help streamline work processes, and their restriction could lead to slower operations in certain departments.
Experts suggest that India should focus on developing AI models that are secure and optimized for government use, ensuring that innovation continues without compromising confidential information.
For now, the Finance Ministry’s stance reinforces the need for careful regulation of AI technologies, ensuring that security remains a top priority in government operations.
Italy’s data protection authority, Garante, has ordered Chinese AI chatbot DeepSeek to halt its operations in the country. The decision comes after the company failed to provide clear answers about how it collects and handles user data. Authorities fear that the chatbot’s data practices could pose security risks, leading to its removal from Italian app stores.
Why Did Italy Ban DeepSeek?
The main reason behind the ban is DeepSeek’s lack of transparency regarding its data collection policies. Italian regulators reached out to the company with concerns over whether it was handling user information in a way that aligns with European privacy laws. However, DeepSeek’s response was deemed “totally insufficient,” raising even more doubts about its operations.
Garante stated that DeepSeek denied having a presence in Italy and claimed that European regulations did not apply to it. Despite this, authorities believe that the company’s AI assistant has been accessible to Italian users, making it subject to the region’s data protection rules. To address these concerns, Italy has launched an official investigation into DeepSeek’s activities.
Growing Concerns Over AI and Data Security
DeepSeek is an advanced AI chatbot developed by a Chinese startup, positioned as a competitor to OpenAI’s ChatGPT and Google’s Gemini. With over 10 million downloads worldwide, it is considered a strong contender in the AI market. However, its expansion into Western countries has sparked concerns about how user data might be used.
Italy is not the only country scrutinizing DeepSeek’s data practices. Authorities in France, South Korea, and Ireland have also launched investigations, highlighting global concerns about AI-driven data collection. Many governments fear that personal data gathered by AI chatbots could be misused for surveillance or other security threats.
This is not the first time Italy has taken action against an AI company. In 2023, Garante temporarily blocked OpenAI’s ChatGPT over privacy issues. OpenAI was later fined €15 million after being accused of using personal data to train its AI without proper consent.
Impact on the AI and Tech Industry
The crackdown on DeepSeek comes at a time when AI technology is shaping global markets. Just this week, concerns over China’s growing influence in AI led to a significant drop in the U.S. stock market. The NASDAQ 100 index lost $1 trillion in value, with AI chipmaker Nvidia alone suffering a $600 million loss.
While DeepSeek has been removed from Italian app stores, users who downloaded it before the ban can still access the chatbot. Additionally, its web-based version remains functional, raising questions about how regulators will enforce the restriction effectively.
As AI continues to make new advancements, countries are becoming more cautious about companies that fail to meet privacy and security standards. With multiple nations now investigating DeepSeek, its future in Western markets remains uncertain.
January 27 marked a pivotal day for the artificial intelligence (AI) industry, with two major developments reshaping its future. First, Nvidia, the global leader in AI chips, suffered a historic loss of $589 billion in market value in a single day—the largest one-day loss ever recorded by a company. Second, DeepSeek, a Chinese AI developer, surged to the top of Apple’s App Store, surpassing ChatGPT. What makes DeepSeek’s success remarkable is not just its rapid rise but its ability to achieve high-performance AI with significantly fewer resources, challenging the industry’s reliance on expensive infrastructure.
Unlike many AI companies that rely on costly, high-performance chips from Nvidia, DeepSeek has developed a powerful AI model using far fewer resources. This unexpected efficiency disrupts the long-held belief that AI breakthroughs require billions of dollars in investment and vast computing power. While companies like OpenAI and Anthropic have focused on expensive computing infrastructure, DeepSeek has proven that AI models can be both cost-effective and highly capable.
DeepSeek’s AI models perform at a level comparable to some of the most advanced Western systems, yet they require significantly less computational power. This approach could democratize AI development, enabling smaller companies, universities, and independent researchers to innovate without needing massive financial backing. If widely adopted, it could reduce the dominance of a few tech giants and foster a more inclusive AI ecosystem.
DeepSeek’s success could prompt a strategic shift in the AI industry. Some companies may emulate its focus on efficiency, while others may continue investing in resource-intensive models. Additionally, DeepSeek’s open-source nature adds an intriguing dimension to its impact. Unlike OpenAI, which keeps its models proprietary, DeepSeek allows its AI to be downloaded and modified by researchers and developers worldwide. This openness could accelerate AI advancements but also raises concerns about potential misuse, as open-source AI can be repurposed for unethical applications.
Another significant benefit of DeepSeek’s approach is its potential to reduce the environmental impact of AI development. Training AI models typically consumes vast amounts of energy, often through large data centers. DeepSeek’s efficiency makes AI development more sustainable by lowering energy consumption and resource usage.
However, DeepSeek’s rise also brings challenges. As a Chinese company, it faces scrutiny over data privacy, security, and censorship. Like other AI developers, DeepSeek must navigate issues related to copyright and the ethical use of data. While its approach is innovative, it still grapples with industry-wide challenges that have plagued AI development in the past.
DeepSeek’s emergence signals the start of a new era in the AI industry. Rather than a few dominant players controlling AI development, we could see a more competitive market with diverse solutions tailored to specific needs. This shift could benefit consumers and businesses alike, as increased competition often leads to better technology at lower prices.
However, it remains unclear whether other AI companies will adopt DeepSeek’s model or continue relying on resource-intensive strategies. Regardless, DeepSeek has already challenged conventional thinking about AI development, proving that innovation isn’t always about spending more—it’s about working smarter.
DeepSeek’s rapid rise and innovative approach have disrupted the AI industry, challenging the status quo and opening new possibilities for AI development. By demonstrating that high-performance AI can be achieved with fewer resources, DeepSeek has paved the way for a more inclusive and sustainable future. As the industry evolves, its impact will likely inspire further innovation, fostering a competitive landscape that benefits everyone.