U.S. Navy bans use of DeepSeek due to ‘security and ethical concerns’
Samuel Boivin | Nurphoto | Getty Images
The U.S. Navy has instructed its members to avoid using artificial intelligence technology from China’s DeepSeek, CNBC has learned.
In a warning issued by email to “shipmates” on Friday, the Navy said DeepSeek’s AI was not to be used “in any capacity” due to “potential security and ethical concerns associated with the model’s origin and usage.”
A spokesperson for the U.S. Navy confirmed the authenticity of the email and said it was in reference to the Department of the Navy’s Chief Information Officer’s generative AI policy.
The announcement followed DeepSeek’s release of its powerful new reasoning AI model called R1, which rivals technology from OpenAI. The DeepSeek model is open source, meaning any AI developer can use it. The DeepSeek app has surged to the top of Apple’s App Store, dethroning OpenAI’s ChatGPT, and people in the industry have praised its performance and reasoning capabilities.
DeepSeek’s pronouncements rocked the capital markets on Monday due to concerns that future AI products will require less-expensive infrastructure than Wall Street has assumed. DeepSeek said in late December that its large language model took only two months and less than $6 million to build despite the U.S. curbing chip exports to China three times in three years. That’s a tiny fraction of the amount spent by OpenAI, Anthropic, Google and others.
Shares of AI chipmakers Nvidia and Broadcom each dropped 17% on Monday, a route that wiped out a combined $800 billion in market cap. Those stocks led a 3.1% drop in the Nasdaq.
The Navy’s warning landed days earlier.
“We would like to bring to your attention a critical update regarding a new AI model called DeepSeek,” the email said. The memo said it’s “imperative” that team members do not use DeepSeek’s AI “for any work-related tasks or personal use.”
The email was sent on Friday morning to the distribution list OpNav, which stands for Operational Navy, indicating it was an all-hands memo. The warning was based on an advisory from Naval Air Warcraft Center Division Cyber Workforce Manger.
It said recipients were to “refrain from downloading, installing, or using the DeepSeek model in any capacity.”
DeepSeek said on Monday it would temporarily limit user registrations “due to large-scale malicious attacks” on its services, before later resuming operations as usual.
OpenAI CEO Sam Altman, accompanied by U.S. President Donald Trump, Oracle CTO Larry Ellison (R), and SoftBank CEO Masayoshi Son (2nd-R), speaks during a news conference in the Roosevelt Room of the White House on January 21, 2025 in Washington, DC.
Andrew Harnik | Getty Images
President Donald Trump, who took office last Monday, said the sudden rise of DeepSeek “should be a wake-up call” for America’s tech companies. Trump is currently trying to keep Chinese social media app TikTok alive in the U.S., after lawmakers determined that the service must be banned or sold due to national security concerns. Trump was in favor of banning TikTok in his first administration before flip-flopping on the matter.
Venture capitalist David Sacks, Trump’s AI and crypto czar, posted on X on Monday that DeepSeek R1 “shows that the AI race will be very competitive,” adding that he is “confident in the U.S. but we can’t be complacent.” Meta, which has developed its own open-source models called Llama, started four DeepSeek-related “war rooms” within its generative AI department, The Information reported.
Alexandr Wang, CEO of Scale AI, told CNBC last week that DeepSeek’s last AI model was “earth-shattering” and that its R1 release is even more powerful. He said it’s “roughly on par with the best American models” and described the race between the U.S. and China as an “AI war.” Wang’s company provides training data to key OpenAI, Google and Meta.
Trump’s first big move in AI came last week, when his administration announced a joint venture dubbed Stargate between OpenAI, Oracle and SoftBank to invest billions of dollars in AI infrastructure in the U.S.
WATCH: DeepSeek is another way China is undermining American players
(L-R) Priscilla Chan, CEO of Meta and Facebook Mark Zuckerberg, and Lauren Sanchez attend the inauguration ceremony before Donald Trump is sworn in as the 47th US President in the US Capitol Rotunda in Washington, DC, on January 20, 2025.
Saul Loeb | Afp | Getty Images
Meta CEO Mark Zuckerberg praised the Trump administration for backing Silicon Valley on a call with investors, adding that 2025 will be big for “redefining” the company’s relationships with governments.
“We now have a U.S. administration that is proud of our leading companies, prioritizes American technology winning and that will defend our values and interests abroad,” Zuckerberg said Wednesday. “I am optimistic about the progress and innovation that this can unlock, so this is going to be a big year.”
Meta on Wednesday also agreed to pay $25 million to settle a lawsuit with President Donald Trump, according to NBC News. Trump sued Meta after the company suspended his Facebook and Instagram accounts following the insurrection at the U.S. Capitol on Jan. 6, 2021.
Zuckerberg and Meta have made several public efforts to smooth over relations with President Donald Trump since his victory in November. The company donated $1 million to Trump’s inaugural fund late last year, weeks after Zuckerberg dined with him privately at his Mar-a-Lago resort.
Earlier this month, Zuckerberg announced that Meta would eliminate third-party fact-checking to “restore free expression” to the company’s platforms. He said the fact-checkers had been “too politically biased” and “destroyed more trust than they’ve created, especially in the U.S.”
The move was widely recognized as a nod to Trump, as he and other Republicans have long claimed that Meta’s platforms like Facebook and Instagram censor conservative views. Zuckerberg and Trump have had an especially rocky relationship in the past, as Trump has previously threatened the tech executive with life in prison.
The company also elevated Joel Kaplan, former White House deputy chief of staff under President George W. Bush with longstanding ties to the Republican Party, to its chief policy role earlier this month.
Zuckerberg’s public concessions appear to be earning him some good will, as he attended Trump’s inauguration alongside other tech moguls like Tesla CEO Elon Musk, Google CEO Sundar Pichai and Amazon founder Jeff Bezos this month.
Shares of Meta were up slightly in extended trading Wednesday after the company reported fourth-quarter earnings that beat Wall Street’s expectations on top and bottom lines.
–CNBC’s Jonathan Vanian contributed to this report
WATCH: Meta beats on top and bottom lines, stock slips on Q1 revenue guidance
Mark Zuckerberg, CEO of Meta Platforms, demonstrates the Meta Quest Pro during the virtual Meta Connect event in New York on Oct. 11, 2022.
Michael Nagle | Bloomberg | Getty Images
Meta continues to lose billions of dollars developing the virtual reality and augmented reality technologies needed to underpin the nascent metaverse.
The social media giant reported fourth-quarter earnings Wednesday and said its Reality Labs unit recorded an operating loss of $4.97 billion while generating $1.1 billion in sales. Analysts were projecting that unit to log a fourth-quarter operating loss of $5.4 billion on $1.1 billion in sales.
Reality Labs is Meta’s unit that makes the Quest family of virtual-reality headsets and Ray-Ban Meta Smart Glasses.
Meta CEO Mark Zuckerberg kick-started his company’s VR endeavors in 2014 when it acquired the startup Oculus for $2 billion. Since then, Zuckerberg has characterized VR and AR as central to his plans to develop the futuristic digital world known as the metaverse, which he has said represent the next major computing platform.
Wall Street has questioned Zuckerberg’s metaverse investment. Reality Labs has tallied an operating loss of more than $60 billion since 2020, as of Meta’s fourth-quarter earnings report.
Meta last week said it would invest between $60 billion and $65 billion in 2025 capital expenditures to expand its computing infrastructure related to artificial intelligence. Zuckerberg has previously said AI is core to the company’s metaverse efforts, including its Ray-Ban Meta smart glasses. Meta develops that device with France-based EssilorLuxottica.
The social media company last year also unveiled its Orion prototype AR headset that is capable of overlaying digital objects on top of a person’s real field of view.
Meta released its latest VR headset, the $299 Quest 3S, during its September Connect event and pitched the device as a way for people to watch movies, play games and workout in VR.
Other tech companies are also investing in VR and AR.
Apple’s Vision Pro headset went on sale in the U.S. in February 2024 with a starting price of $3,499, and in December, Google and Samsung said they were working on a VR and AR device dubbed Project Moohan that will be available to buy in 2025 for an undisclosed price.
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