Chinese AI company DeepSeek faces privacy concerns, prompting reactions from XRP lawyers, US officials, and tech industry leaders.
Chinese artificial intelligence company DeepSeek has been facing significant criticism over privacy and security concerns. The tech company is under close scrutiny from the United States and other countries, including Australia. Pro-XRP lawyer Jeremy Hogan also raised concerns on X about the company’s privacy practices.
Hogan stated that after reviewing DeepSeek AI’s privacy policy, he found that users have no privacy. He added that the AI-powered chatbot can collect virtually all user data and share it with almost anyone. Hogan noted:
“The DeepSeek privacy policy is: You don’t have any privacy. None. It can collect almost any and all information from you and share it with almost anyone. But don’t worry, all your info is stored safely somewhere in China – where privacy is paramount!”
Ripple CTO David Schwartz responded to the post with an image, downplaying the seriousness of the privacy concern. He pointed out that while DeepSeek AI’s privacy policy is concerning, it is not as extreme as the terms that once existed for beta.webmaster.com.
They're not as bad as the terms for https://t.co/6oJ9iAu3nJ used to be: pic.twitter.com/1zskiHENdY
— David "JoelKatz" Schwartz (@JoelKatz) January 29, 2025
The US Navy has advised its personnel against using China’s DeepSeek, citing security and ethical concerns. In an email to members, the Navy explicitly prohibited the use of the AI tool. Following the release of DeepSeek, shares of AI chipmakers Nvidia and Broadcom each dropped by 17% on Monday, erasing a combined $800 billion in market value. This decline contributed to a 3.1% drop in Nasdaq.
Trump and Industry Leaders Discuss DeepSeek’s Competitive Implications
Despite the criticism, DeepSeek has received support from President Donald Trump, who called the latest version a “wake-up call” for US companies and urged them to focus on winning the competition. David Sacks, Trump’s AI and ‘crypto czar,’ stated on Monday that DeepSeek R1 demonstrates how competitive the AI field is. He agreed with President Trump’s decision to cancel a rule by Biden that restricted US AI companies, pointing out that China didn’t have similar rules.
DeepSeek R1 shows that the AI race will be very competitive and that President Trump was right to rescind the Biden EO, which hamstrung American AI companies without asking whether China would do the same. (Obviously not.) I’m confident in the U.S. but we can’t be complacent.
— David Sacks (@DavidSacks) January 27, 2025
According to a report by CNBC, a spokesperson from Nvidia praised DeepSeek, calling it an excellent AI advancement and a great example of test-time scaling. The spokesperson added that it demonstrates how new models can be created using common tools and compliant computing resources.
Marina Zhang, an associate professor at the University of Technology Sydney, told the BBC that in China, DeepSeek’s progress is celebrated as proof of the country’s growing tech strength and independence. The company’s success is viewed as a sign of China’s new era of innovation, led by a younger generation of business leaders and owners.
next“The company’s success is seen as a validation of China’s Innovation 2.0, a new era of homegrown technological leadership driven by a younger generation of entrepreneurs,” Zhang said.