Since its launch earlier this year, DeepSeek has raised questions and concerns about the technology behind its AI reasoning model. Now, the U.S. is turning up the scrutiny on Chinese AI startups and the people helping them on American soil.
Following the arrest of two Chinese nationals accused of illegally exporting advanced Nvidia AI chips to China, a group of U.S. lawmakers and federal agencies has increased their scrutiny of Chinese AI activity.
Separately, a group of Republican senators is also pressing the Commerce Department to evaluate the potential data security risks posed by open-source Chinese AI models like DeepSeek.
U.S. senators call for an investigation into Chinese AI models
On Tuesday, the U.S. Justice Department announced charges against Chuan Geng and Shiwei Yang, both 28, for allegedly violating export controls by shipping tens of millions of dollars’ worth of advanced AI chips, specifically Nvidia’s H100 processors, to China without the required government licenses. The chips are subject to strict export controls due to their strategic value in the development of AI technologies with potential military applications.
The pair faces up to 20 years in prison under the Export Control Reform Act.
According to prosecutors, Geng and Yang operated ALX Solutions Inc., a company based in El Monte, California, which they founded in 2022 shortly after the U.S. Commerce Department began imposing tighter licensing requirements on AI chip exports.
Investigators seized mobile phones and discovered communications that show the pair were fully aware that the company was used as a front to bypass export restrictions, routing shipments through Malaysia to disguise their final destination in China.
The Justice Department noted that Yang had overstayed her visa, while Geng is a legal permanent U.S. resident. A federal judge in Los Angeles released Geng on a $250,000 bond, while a detention hearing for Yang is scheduled for August 12. No pleas have been entered in the case yet.
The FBI and the Commerce Department’s Bureau of Industry and Security are leading the investigation.
Senators target DeepSeek
Seven Republican U.S. senators are urging the Commerce Department to probe DeepSeek, a Chinese open-source AI firm, for potential data security and export control violations.
In a letter sent Tuesday, the senators, Todd Young, John Cornyn, John Curtis, Bill Cassidy, Marsha Blackburn, and Jon Husted, led by Sen. Ted Budd, called on the Commerce Department to assess whether Chinese AI models may be collecting data from American users and funneling it to the Chinese government or military.
The letter raises several key concerns, like whether DeepSeek’s software could be transmitting U.S. personal or enterprise data back to Chinese servers, whether it has gained unauthorized access to export-controlled semiconductors, and whether it has violated terms of use for U.S.-based models to improve its own systems.
The senators also referenced concerns that DeepSeek may have misappropriated U.S. AI technology, reiterating a previous statement made in January by Commerce Secretary Howard Lutnick, who vowed to impose restrictions if such violations were confirmed.
U.S. officials remain skeptical of DeepSeek’s claims that its AI reasoning models were on par with, or superior to, leading U.S. models at a fraction of the cost. They still believe that the company’s success came from skimming off U.S. technologies.
The Commerce Department has yet to comment on the senators’ letter or the latest criminal charges.
