China Tightens Grip on AI Startup DeepSeek as Global Scrutiny Intensifies

China is closely monitoring homegrown artificial intelligence startup DeepSeek, a firm that has rapidly gained prominence following the January release of its open-source reasoning model, R1. The Beijing-based company is now reportedly operating under heightened government oversight, with restrictions that reflect Beijing’s growing concerns over intellectual property security and foreign influence in the AI sector.

According to The Information, DeepSeek employees are facing strict travel limitations, with some reportedly unable to travel abroad without government clearance. In an extraordinary measure, the company’s parent firm—quantitative hedge fund High-Flyer—has confiscated passports from certain employees, effectively barring them from leaving the country freely.

Beijing’s involvement extends beyond personnel restrictions. The Chinese government is said to be actively screening DeepSeek’s potential investors, signaling an effort to ensure that foreign capital does not exert undue influence over the firm.

The latest measures come amid broader efforts by China to safeguard its technological advancements from external threats. Just weeks ago, reports surfaced that Chinese authorities were instructing AI researchers and tech entrepreneurs to avoid travel to the United States, citing concerns over potential trade secret leaks.

DeepSeek’s meteoric rise has drawn both admiration and scrutiny, as China positions the firm as a potential national AI champion. However, the increased government oversight underscores Beijing’s strategic balancing act—nurturing domestic innovation while maintaining tight control over the flow of critical AI expertise and intellectual property.

As global competition in AI intensifies, China’s handling of DeepSeek may serve as a blueprint for its broader approach to protecting and shaping the country’s artificial intelligence future.