The Department of Homeland Security has ordered DeepSeek removed from federal civilian executive branch systems and banned new purchases, acting on 20 October under the 2018 Federal Acquisition Supply Chain Security Act authority. China publicly criticised the decision on security grounds.
The operative detail is that this is a removal order, not only a procurement prohibition. Agencies must take existing deployments out rather than simply stop buying, which turns it from a purchasing rule into an inventory and audit exercise across civilian agencies. Legislators had been pressing for state-level bans on government devices since early 2025, so the federal action follows a well-worn path rather than opening one.
The timing is the interesting part. DeepSeek reportedly raised about $15 billion this month from backers including Tencent and CATL, following a $7 billion round at a $50 billion valuation in June. Its commercial trajectory and its access to Western public-sector buyers are now moving in opposite directions, and the open-weight route - running the models on your own infrastructure rather than buying a service - is exactly what a procurement ban does not reach.
Sources
CNBC · The Hacker News · UPI