Taiwan bans its government departments from using DeepSeek

Taiwan has banned government departments from using DeepSeek’s artificial intelligence service, citing security risks associated with the Chinese startup’s cross-border data handling practices.

Key policy announcement: The Taiwan Ministry of Digital Affairs has issued a directive prohibiting government departments from utilizing DeepSeek’s AI services due to national security concerns.

• The ministry specifically highlighted risks related to cross-border data transmission and potential information leakage
• Officials emphasized that DeepSeek’s status as a Chinese product raises particular security concerns given the geopolitical context
• The ministry indicated it will continue monitoring technological developments and adjust security policies as needed

Geopolitical context: Taiwan’s decision reflects ongoing tensions with China and broader concerns about Chinese technology.

• Taiwan has historically maintained cautious policies regarding Chinese technology due to Beijing’s territorial claims over the island
• The directive aligns with Taiwan’s existing pattern of restricting Chinese tech products in government operations
• Military and political pressure from Beijing continues to influence Taiwan’s technology policies

Global regulatory scrutiny: Taiwan’s action comes amid growing international attention to DeepSeek’s data practices.

• South Korea’s privacy watchdog has announced plans to investigate DeepSeek’s user data management
• European authorities in France, Italy, and Ireland are also examining the company’s personal data handling
• These regulatory actions suggest widespread concern about data privacy and security implications of DeepSeek’s services

Market impact: DeepSeek has shown significant market momentum despite regulatory challenges.

• The company’s free AI assistant recently surpassed ChatGPT in Apple App Store downloads
• The surge in DeepSeek’s popularity coincided with a major market shift that saw U.S. tech stocks decline
• Nvidia experienced a historic $593 billion single-day market value loss, marking the largest one-day decline for any company in Wall Street history

Looking ahead: Taiwan’s ban on DeepSeek may signal a growing trend of national security-based restrictions on Chinese AI technologies, potentially reshaping the global AI competitive landscape while highlighting the increasing intersection of technology, national security, and geopolitical tensions.