Fears of a new AI arms race has developed (Image: Getty)
Beijing’s spies could benefit from the rapid rise of a low-cost chatbot built by a Chinese artificial intelligence firm.
DeepSeek, launched last week, has overtaken rivals including OpenAI’s ChatGPT to become the most downloaded free app in the US, triggering market chaos.
DeepSeek will collect users’ device information, IP address and keystroke patterns – how a user types – and store the data in China.
Luke de Pulford, executive director of the Inter-Parliamentary Alliance on China, warned “all that data is vulnerable to arbitrary requisition from the Chinese state”.
DeepSeek’s rapid rise has shocked investors (Image: Getty)
The US has previously warned of “mass surveillance and censorship”, adding that Beijing could use AI to repress its population, spread misinformation and undermine Western democracies.
But the privacy settings of the Chinese app will prompt fears Westerners will hand over vital information to Beijing, bolstering intelligence operations.
Chinese intelligence operations differ from those of , as Beijing’s operatives harvest vast swathes of seemingly meaningless data to build profiles and identify targets.
Bob Seely, a former member of Parliament’s Foreign Affairs Select Committee, said: “It is quite clear there is a battle for dominance in AI, the consequences of which will be profound for the world. China is clearly playing catch-up.
“Its AI is also seeking to influence minds because it has been programmed not to provide answers or process topics that China’s Communist Party doesn’t want raised. Communist AI will, I suspect, be an increasing threat to freedom.”
DeepSeek refused to give users any information on the Tiananmen Square massacre, or criticise Chinese president .
Kayla Blomquist, a researcher at the Oxford Internet Institute and director of the Oxford China Policy Lab, told the : “It’s very difficult, if not impossible, to know for sure that there are not backdoors built into a system, that there are not other methods of data exfiltration back to mainland China for strategic purposes on the Government’s behalf.”
DeepSeek is powered by the open-source DeepSeek-V3 model, which its researchers claim was developed for around $6million — significantly less than the billions spent by rivals.
The Chinese AI assistant’s sudden emergence is leading to a re-evaluation of the AI market.
DeepSeek’s sudden popularity has startled stock markets in Europe and the US.
AI chipmaker Nvidia had plunged 16% midway through trading on Monday while rival Broadcom slumped 17.8%.
Other tech firms also sank, with Microsoft down 3.7% and Google’s owner Alphabet down over 3%.
China’s access to the US-made advanced chips, which are needed to power the training of AI models, has been restricted since the US government bolstered restrictions on sales to China in 2021.
As a result, Chinese AI firms have begun to share their work with each other more freely and look for other ways of boosting performance.
That has resulted in AI models that require far less computing power to run, which also means they cost substantially less than previously thought possible.
Downing Street insisted the UK need not be concerned about the impact of Chinese chatbot DeepSeek on its AI sector.
Asked whether the UK was “at risk of being left behind”, the Prime Minister’s official spokesman said: “No, I don’t think so.
“The UK has got significant strengths in AI as we saw with the launch of the opportunities action plan just the other week and we have got some very strong players in the market, obviously we all know about the success of DeepMind and the contribution that that’s playing.
“But our strengths go much further than that and the Secretary of State and the PM set out an ambitious agenda to take advantage of our strengths, but also to ensure that the public sector is harnessing the strengths of AI and indeed the public benefit from AI in their day-to-day lives.”
The spokesman declined to comment on the impact on tech stocks, saying: “We never comment on financial market movements.”