From Startup Fortune · · 1m 20s
DHS Bars DeepSeek From Federal Agencies Under 2018 Law
US government blocks Chinese AI startup DeepSeek from federal systems via 2018 supply chain law.
In brief
US government blocks Chinese AI startup DeepSeek from federal systems via 2018 supply chain law. DHS banned DeepSeek from all federal civilian agencies using the Federal Acquisition Supply Chain Security Act of 2018, blocking its products and future purchases while avoiding an Entity List listing. Originally reported…
DHS Issues Federal Ban on DeepSeek
DHS ordered all federal civilian agencies to remove DeepSeek products from their systems and block future purchases under the Federal Acquisition Supply Chain Security Act of 2018.
“DHS didn't write new rules to do it. It invoked the Federal Acquisition Supply Chain Security Act of 2018”
DeepSeek's Performance and Pricing
DeepSeek's V4.1-Flash model scored 74.2 on the DeepSWE v1.1 benchmark, costing 27 cents per task versus competitors at $8.75 and $3.26.
“Artificial analysis measured deepseek v4.1-flash's cost per task at 27 cents, against $8.75 and $3.26 for two frontier competitors”
Scope of the Ban
The ban requires removing any third-party product using DeepSeek's models and blocks future purchases of technology built on that platform.
“Dhs cited three threat vectors: unauthorized transfer of sensitive data to china, intelligence gathering on us persons, and the risk that deepseek's models could introduce malware”
Why This Matters Now
Startups using DeepSeek's cheap API now face higher costs as federal agencies block vendors built on the technology.
“If a federal agency decides a vendor built on deepseek is untouchable, and that exclusion creeps toward state governments or federal contractors next”
Global Response
Italy, Taiwan, Australia, and 17 US states banned DeepSeek from government systems before DHS action.
“At least 17 us states, including texas, new york and virginia, had already banned it on state systems before dhs moved”
DHS Avoids Entity List
DHS stopped short of adding DeepSeek to the Entity List, which would restrict access to us chips and software.
“Dhs chose not to cross that line, at least yet”
DeepSeek Continues Development
DeepSeek keeps releasing faster, cheaper models while governments ban their use.
“Deepseek hasn't said anything that walks back the concerns. It's just kept releasing faster, cheaper models”
The bottom line
DHS banned DeepSeek from all federal civilian agencies using the Federal Acquisition Supply Chain Security Act of 2018, blocking its products and future purchases while avoiding an Entity List listing.
