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31 January 2025

DeepSeek AI Stirs Global Concerns Over Data Privacy

Italian and Australian authorities raise alarms as U.S. tech stocks tumble following DeepSeek's rise.

The global artificial intelligence arena has been shaken by the rise of DeepSeek, a Chinese chatbot sensation whose rapid ascent has ignited controversy over its data privacy practices. With millions of users flocking to DeepSeek’s applications, the scrutiny from international regulatory bodies has only intensified.

DeepSeek AI, developed by the Hangzhou-based company, has been criticized especially by Italy's data protection authority, the GPDP, which demands answers about its handling of user information. The agency has outlined specific concerns: the type of user data collected, how it is stored, and whether any of it is stored on Chinese servers. With the implementation of the EU’s General Data Protection Regulation (GDPR), compliance is at the forefront of Italy’s inquiry.

Australia’s Treasurer Jim Chalmers has echoed similar sentiments, urging caution among users: “We would urge Australians to be cautious about this new technology.” This warning reflects broader governmental unease about the potential misuse of personal data by foreign entities. Meanwhile, the Irish Data Protection Commission has also reached out to DeepSeek to discuss similar issues, demonstrating how widespread the concern is becoming.

Other companies have faced similar fates, including DeepSeek’s competitor, OpenAI. Italy previously imposed a temporary ban on OpenAI’s ChatGPT, claiming it engaged in unlawful data collection. This case appeared to foreshadow the regulatory storm now brewing for DeepSeek.

DeepSeek’s rapid success is marked by its cost-efficient development model; the organization has produced cutting-edge AI tools for less than $6 million, significantly less than what American companies typically incur. This advantage has prompted major repercussions on Wall Street, sending U.S. technology stocks tumbling as investors grapple with the impending competition posed by DeepSeek.

Reports suggest “heaps of US user data” are being sent to Chinese servers, raising severe privacy concerns. Following its rise to prominence, DeepSeek endured a large-scale cyberattack, amplifying worries about its security. The timing of this attack raised eyebrows, especially as the company found itself at the center of public ire over its data storage and handling practices.

Despite this scrutiny, many users remain unaware of the potential risks. It has been reported by Wired and various cybersecurity experts alike noting DeepSeek’s “nightmarish privacy policy” which permits the collection of extensive user data, including sensitive information such as keystroke patterns. This has compelled experts to encourage users to reconsider their loyalty to the app.

The reaction from experts emphasizes the need for users to remain vigilant. Some suggest uninstalling the app altogether due to the inherent risks involved. “DeepSeek is more dangerous than TikTok,” one expert outlined, primarily because of its lack of oversight and its foundation as a completely Chinese-operated AI project.

Microsoft’s Chief Financial Officer, Amy Hood, has also weighed in on the industry’s reaction to DeepSeek. Amid the turmoil caused by this low-cost AI rival, Hood offered reassurances to Microsoft staff, urging them to focus on their work rather than getting distracted by the upheaval DeepSeek has caused. Microsoft has its own massive AI project, the Stargate initiative, which could be jeopardized by the competition posed by inexpensive Chinese models.

DeepSeek has until February 17 to respond to the regulatory inquiries levied against it. The outcome will not only define its operational future but could have wider ramifications for AI governance across Europe and beyond.

For concerned users, the key takeaway is caution. With discussions around data protection and privacy becoming increasingly heated, questions are being raised about the ethical ramifications of utilizing DeepSeek’s applications. Security concerns should take precedence, as experts recommend users maintain tight control over the permissions granted to the app and refrain from engaging with sensitive information.

The barriers between creativity, efficiency, and ethical responsibilities are being tested, and DeepSeek stands at the forefront of this tenuous balance. The next few weeks will be pivotal, not just for DeepSeek, but for how the international community approaches and regulates artificial intelligence as it continues to penetrate every facet of modern life.