New Bill Could Fine Americans $1M for Downloading Chinese AI App DeepSeek

A newly proposed bill could make it illegal for Americans to download DeepSeek, a popular Chinese artificial intelligence app. Introduced by Sen. Josh Hawley (R-MO) on Monday, the bill titled, Decoupling America’s Artificial Intelligence Capabilities from China Act, aims to block AI technology imports from and exports to China, citing national security risks. The bill seeks to, in Hawley’s words, “prohibit the import from or export to China of artificial intelligence technology.”

Broad Legislation with DeepSeek in Focus

While the bill does not mention DeepSeek by name, it broadly focuses on safeguarding U.S. intellectual property and preventing foreign adversaries from exploiting technology that could threaten national security.

In his announcement, Hawley directly referenced DeepSeek, stating, “America cannot afford to empower our greatest adversary at the expense of our own strength. Ensuring American economic superiority means cutting China off from American ingenuity and halting the subsidization of CCP (Chinese Communist Party) innovation.” He argued that continued AI collaboration with China would undermine U.S. technological leadership and economic strength.

DeepSeek’s R1 model, launched recently, has disrupted the AI industry, reportedly costing far less to develop than American models like OpenAI’s GPT-4, thereby challenging the competitiveness of the U.S. AI sector. Its arrival triggered international concern and a drop in U.S. tech stocks. OpenAI has also accused DeepSeek of training its model on OpenAI’s data—an allegation that some online users found ironic, given OpenAI’s own legal battles over data usage.

Privacy, Censorship, and National Security Concerns

DeepSeek’s rapid rise has raised concerns over ethics, censorship, and data privacy:

• Users have reported censorship on politically sensitive topics, such as Tiananmen Square and Uyghur oppression.

• The app’s privacy policy states that it collects large amounts of user data, which is stored on Chinese servers—potentially accessible by the Chinese government.

• The situation mirrors the TikTok ban, where national security fears led to restrictions on the Chinese-owned app’s operations in the U.S.

Hawley’s bill takes a stricter stance than previous measures. If passed, any American caught downloading DeepSeek could face a $1 million fine, up to 20 years in prison, or both—penalties enforced under the Export Control Reform Act of 2018.

U.S. Tech Firms Adopt R1 with Domestic Safeguards

While concerns over DeepSeek’s data security persist, some U.S. companies, including Perplexity and Microsoft, have integrated the R1 model into their platforms—ensuring that its data remains within the United States.

Because R1 is open-source, researchers running the model locally outside of China can bypass data collection and censorship limitations, accessing its full capabilities without the built-in moderation layer. This highlights both the model’s potential for innovation and the geopolitical complexities of AI development.

To address privacy concerns, platforms like Perplexity have stepped in with data security safeguards. The company announced that it is hosting DeepSeek R1 on U.S. and EU-based servers to support deep web research, ensuring that user data remains outside Chinese jurisdiction. “Your data never leaves Western servers. The open-source model is hosted completely independent of China. Your privacy and data security is our priority,” Perplexity stated.

Through Microsoft's Azure AI Foundry, DeepSeek R1 is also available on a secure, scalable, and enterprise-ready platform. This enables businesses to integrate advanced AI while meeting compliance requirements, including service-level agreements (SLAs), security protocols, and responsible AI standards—all supported by Microsoft’s reliability and innovation. In a blog post, Microsoft emphasized that R1 has undergone rigorous security testing, including red teaming and automated model assessments to mitigate risks.

Beyond DeepSeek: AI Research and Investment Bans

The proposed legislation extends beyond DeepSeek, including provisions that would:

• Ban U.S. companies from conducting AI research in China or collaborating with Chinese AI firms.

• Prohibit American investments in Chinese AI companies.

• Close loopholes that allowed DeepSeek’s cost-effective development, including access to Nvidia GPUs that China acquired before U.S. restrictions took effect.

Is the Bill Too Reactionary?

While some support Hawley’s push to tighten AI regulations, others argue the bill could stifle U.S. innovation. Critics on X noted that restricting open-source AI development could backfire, forcing Chinese companies to find workarounds and innovate even faster.

Looking Ahead: The Future of AI Regulation

The proposed ban on DeepSeek and broader AI restrictions signal a major shift in U.S.-China technology policy, reflecting growing concerns over data privacy, national security, and economic competition. If passed, the bill could set a precedent for AI-related penalties—potentially influencing how the U.S. handles foreign AI models, open-source AI, and corporate AI partnerships moving forward.

However, the legislation also raises questions about unintended consequences. Critics argue that overly restrictive policies could hinder U.S. innovation, limiting access to global advancements and pushing Chinese firms to accelerate their own AI development. If China successfully builds more powerful AI models independent of U.S. technology, the competitive landscape could shift in ways that sanctions alone may not control.

Meanwhile, companies like Microsoft and Perplexity are offering an alternative path—integrating foreign AI models within U.S.-based platforms to ensure data security and compliance. This hybrid approach could shape future AI policies, allowing regulated access to advanced models while maintaining national security safeguards.

As the debate over AI security and global competition intensifies, the bill’s fate remains uncertain—but if passed, it could set a precedent for the strictest AI-related penalties in U.S. history.

Editor’s Note: This article was created by Alicia Shapiro, CMO of AiNews.com, with writing, image, and idea-generation support from ChatGPT, an AI assistant. However, the final perspective and editorial choices are solely Alicia Shapiro’s. Special thanks to ChatGPT for assistance with research and editorial support in crafting this article.