The state has banned the use of DeepSeek on all government-issued devices.
Texas is investigating DeepSeek over its privacy practices, ties to the Chinese Communist Party (CCP), and the company’s claims that its AI models rival those of leading competitors, the state’s top prosecutor announced Friday.
“DeepSeek appears to be no more than a proxy for the CCP to undermine American AI dominance and steal the data of our citizens,” Texas Attorney General Ken Paxton said in a statement.
Paxton, whose office has banned the Chinese AI app on all state-issued devices in accordance with Gov. Greg Abbott’s order, said he has notified the company that its AI platform violates Texas data privacy and security laws.
As part of the investigation, Texas is requesting that Google and Apple share their assessments of DeepSeek’s app, along with any documents the company was required to submit before being approved for their app stores.
Texas is not alone in taking action against DeepSeek. On Monday, New York Gov. Kathy Hochul announced a similar ban, prohibiting the AI platform from government devices and networks in her state due to “serious concerns” over its potential use for “foreign surveillance and censorship, including how DeepSeek can be used to harvest user data and steal technology secrets.”
There is also a bipartisan effort underway in Congress to ban DeepSeek from all federal government devices.
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According to DeepSeek’s own data privacy policy, the company collects personal information—including emails, phone numbers, birth dates, user inputs, device details, and “keystroke patterns.” This data is stored on servers in China.
Under the CCP’s counterespionage laws, Chinese companies are obliged to hand over foreign user data if the state demands it.
Like all other platforms allowed to operate in China, DeepSeek aggressively censors its responses and incorporates biases that align with the communist regime’s narratives.
“The Chinese Communist Party has made it abundantly clear that it will exploit any tool at its disposal to undermine our national security, spew harmful disinformation, and collect data on Americans,” said Rep. Josh Gottheimer (D-N.J.), who is pushing for the federal ban on DeepSeek.
DeepSeek is owned by High-Flyer, a company based in the eastern coastal city of Hangzhou, and specializes in using AI to make stock bets. The AI startup made headlines last month with the launch of its DeepSeek-V3 and DeepSeek-R1 models, which reportedly cost significantly less to develop while still matching or even exceeding the sophistication of leading U.S. AI models.
DeepSeek claims it trained its DeepSeek-V3 model on less-advanced chips for less than $6 million, a fraction of the $100 million OpenAI reportedly spent to train its latest ChatGPT model. DeepSeek’s statement sent shockwaves through the stock market, leading to a record single-day 17 percent drop in Nvidia’s stock price, erasing nearly $600 billion from the high-end chip maker’s market cap.
President Donald Trump, who is championing a $500 billion private-sector initiative to expand the United States’ AI infrastructure, said DeepSeek’s cost-efficient operations should serve as a “wake-up call” for American tech firms.
ChatGPT creator OpenAI said on Jan. 29 that DeepSeek might have “inappropriately” used its data.
“We know that groups in the PRC are actively working to use methods, including what’s known as distillation, to try to replicate advanced U.S. AI models,” an OpenAI spokesperson previously told The Epoch Times, using the acronym for the Chinese regime’s official name, the People’s Republic of China.
“We are aware of and reviewing indications that DeepSeek may have inappropriately distilled our models, and will share information as we know more.”
Distillation is an AI technique in which a developer trains an AI model by siphoning data from a larger one. OpenAI, in its terms of service, states that it does not allow anyone to take data from its system to build competing products.
David Sacks, the White House AI czar, echoed OpenAI’s speculation.
Eva Fu contributed to this report.
