DeepSeek AI Under Scrutiny: A Game-Changer or a Strategic Disruption?

The artificial intelligence landscape has seen a major shakeup with the rise of DeepSeek AI, a Chinese-based large language model (LLM) making waves in the tech industry. While some view it as a breakthrough in AI-driven innovation, others suspect a strategic move by its hedge fund parent company to influence Nvidia and other tech stocks. Regardless of the intent, DeepSeek’s rapid rise has now caught the attention of European data protection authorities, raising concerns about data privacy, security, and regulatory compliance.

DeepSeek Faces Regulatory Scrutiny in Europe

On the heels of its viral success, DeepSeek has found itself under the microscope of European regulators. Today, the Irish Data Protection Commission (DPC) confirmed that it has formally reached out to DeepSeek for clarification on how it processes the personal data of Irish citizens.

A spokesperson from the DPC stated:

“The Data Protection Commission has written to DeepSeek requesting information on the data processing conducted in relation to data subjects in Ireland.”

This development follows a similar move by Italy’s Data Protection Authority (DPA), which issued a formal request for information less than 24 hours earlier. While DeepSeek has yet to publicly respond, a noticeable action has already taken place—its mobile app has been removed from both the Google Play Store and Apple’s App Store in Italy.

DeepSeek and GDPR Compliance: A Major Concern

The Italian regulator’s move is particularly significant as it marks the first major regulatory action against DeepSeek since its viral emergence. The consumer rights coalition Euroconsumers, which successfully challenged Grok AI in a high-profile case last year, has also filed a complaint against DeepSeek with the Italian DPA.

The key issues at the heart of these regulatory concerns include:

Data Privacy & Security: How DeepSeek collects, stores, and processes personal user data.

Legal Basis for Data Processing: Whether its AI training methods comply with GDPR (General Data Protection Regulation).

Data Transfers to China: The potential risks associated with storing user data in China.

The Italian DPA issued a statement warning that the personal data of millions of Italians could be at risk. DeepSeek has been given 20 days to respond to the regulator’s inquiry.

Data Storage and Transfer Concerns

One of the biggest red flags for regulators is the fact that DeepSeek is headquartered in China. Its privacy policy states that user data is collected, processed, and stored in its home country. While the company claims that any international data transfers comply with applicable data protection laws, European regulators are demanding greater transparency.

The Italian DPA specifically requested details on:

The sources of personal data collected

The purposes of data collection and processing

How personal data is used to train DeepSeek’s AI models

The legal justification for these activities

The security measures in place for data stored in China

Additionally, the regulator has asked for clarity on web scraping practices and how users—both registered and non-registered—are informed about the use of their personal information.

DeepSeek’s Policies on Minors Under Scrutiny

Another area of contention is how DeepSeek handles data related to minors. Euroconsumers raised concerns about the lack of age verification measures on DeepSeek’s platform.

While the company’s privacy policy states that the service is not intended for users under 18, it does not outline any clear mechanisms to enforce this restriction. For users aged 14 to 18, DeepSeek merely suggests that they review the privacy policy with an adult—an approach that regulators argue is insufficient.

EU and UK Authorities Respond to DeepSeek’s Controversies

The growing scrutiny of DeepSeek reached the highest levels of European governance earlier today. At a European Commission press conference, spokesperson Thomas Regnier addressed concerns surrounding DeepSeek’s compliance with the AI Act, data privacy, and censorship issues.

While he declined to confirm whether DeepSeek had violated any EU laws, he stated:

“The services offered in Europe will respect our rules.”

When questioned about whether DeepSeek’s alleged censorship of politically sensitive topics in China might violate European free speech regulations, Regnier responded:

“These are very early stages. I’m not talking about an investigation yet.”

Meanwhile, the UK’s Information Commissioner’s Office (ICO) issued a statement reinforcing the need for AI developers to adhere to transparency standards.

A spokesperson for the ICO said:

“Generative AI developers and deployers need to make sure people have meaningful, concise, and easily accessible information about the use of their personal data.”

While no formal action has been taken in the UK, the ICO emphasized that it would not hesitate to act if DeepSeek failed to meet its regulatory obligations.

Copyright and IP Questions Loom Over DeepSeek

Beyond privacy and security concerns, intellectual property (IP) issues are also coming into focus. One of the most striking aspects of DeepSeek’s rise is its ability to operate at significantly lower costs than major competitors like OpenAI and Anthropic.

The AI industry has long assumed that training and running large-scale generative AI models requires massive infrastructure, costly chips, and high energy consumption. However, DeepSeek’s efficient model challenges this notion, prompting speculation about how it was developed.

Reports indicate that Microsoft and OpenAI suspect that DeepSeek’s training data includes “distillations” of their proprietary models. If proven true, this could lead to serious legal and regulatory battles, particularly around copyright infringement and proprietary model cloning.

What’s Next for DeepSeek?

While DeepSeek remains operational in Italy via its web platform, its removal from app stores signals growing regulatory pressure. As European watchdogs ramp up their investigations, DeepSeek faces mounting challenges:

Regulatory Compliance: Responding to GDPR-related inquiries from the Irish and Italian DPAs.

Legal Risks: Potential lawsuits related to copyright violations and AI model training practices.

Public Scrutiny: Ongoing debates about the ethics of data collection, censorship, and security risks.

DeepSeek’s ability to navigate these challenges will determine whether it emerges as a long-term player in AI development or faces significant restrictions in key international markets.