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A bipartisan group of US lawmakers has introduced legislation to prohibit the use of the Chinese artificial intelligence app DeepSeek on federal government devices, citing security risks. Representatives Josh Gottheimer, a Democrat from New Jersey, and Darin LaHood, a Republican from Illinois, introduced the “No DeepSeek on Government Devices Act” on Thursday. The bill seeks to bar federal employees from using the AI app on government-issued electronics, following concerns that the Chinese government could leverage the technology for surveillance and misinformation. A similar restriction is already in place for the social media platform TikTok. “The Chinese Communist Party has demonstrated time and again that it will exploit technology to undermine our national security, spread disinformation, and collect data on Americans,” Gottheimer said in a statement. “We cannot allow the CCP to infiltrate our government networks and jeopardize sensitive information.” The proposal follows DeepSeek’s December launch of an AI model that reportedly rivals those developed by US tech firms like OpenAI, Meta, and Alphabet, but at a significantly lower cost. A January research paper highlighting DeepSeek’s capabilities raised concerns among policymakers and tech leaders. Researchers link China's DeepSeek chatbot to a state telecom, raising privacy concerns Security analysts have also flagged potential risks. A report by research firm Feroot, cited by The Associated Press, found that DeepSeek’s software code could transmit user login details to a Chinese state-owned telecom company barred from operating in the US Gottheimer emphasized the urgency of banning the app. “This was enough of a warning sign to take immediate action,” he told the AP. “Americans need to understand the privacy risks, especially as AI chatbots are used to handle sensitive information, contracts, and proprietary data.” He also urged Congress to further investigate DeepSeek’s surveillance potential. The US-China rivalry in technology continues to escalate, with Washington imposing restrictions on Chinese firms like Huawei, limiting microchip exports, and pressuring TikTok’s Chinese parent company to divest. In 2023, the Biden administration banned TikTok from federal devices. “This bipartisan bill is a commonsense step to prevent the app from accessing government networks while closing security loopholes,” LaHood said. Judge says Elon Musk's claims of harm from OpenAI are a 'stretch' but welcomes possible trial The legislation would apply to DeepSeek and any AI app developed by its parent company, High-Flyer, with exceptions for national security and research. Several countries have already restricted DeepSeek. Italy blocked access to the app last month, while Taiwan, South Korea, Australia, and Texas have all barred its use on government systems.

Wall Street’s tech giants faced sharp declines on Monday amid concerns over a Chinese competitor potentially disrupting the booming artificial intelligence (AI) sector.  The S&P 500 dropped 1.7% in afternoon trading, on course for its steepest loss in over a month. Tech-heavy Nasdaq Composite took a significant hit, falling 3.2%, as major technology stocks suffered. Nvidia led the slide, plummeting 16%, AP reports.  In contrast, industries outside the AI sector showed resilience. The Dow Jones Industrial Average rose by 137 points, or 0.3%, at 12:42 pm Eastern Time. The Dow's smaller exposure to tech helped cushion its performance compared to the S&P 500 and Nasdaq.  Chinese challenger DeepSeek shakes AI market  The market turbulence stemmed from China, where a company named DeepSeek announced the development of a large language model rivaling US tech leaders at a fraction of the cost. DeepSeek's app reached the top spot among free apps on Apple’s App Store by Monday morning, a feat considered remarkable given US restrictions on China’s access to advanced AI chips.  Despite the buzz, skepticism remains over DeepSeek's ability to significantly disrupt the AI ecosystem. Questions persist about how it may have bypassed US chip export restrictions and what hardware it used to develop its model.  Asian shares gain after S&P 500 climbs to a record and Bank of Japan raises rate Dan Ives, an analyst at Wedbush Securities, remarked, “It remains to be seen if DeepSeek found a way to work around these chip restriction rules and what chips they ultimately used. There will be many skeptics around this issue, especially given the information is coming from China.”  The ripple effects of DeepSeek's announcement were felt across global markets. In Amsterdam, Dutch chipmaking equipment producer ASML saw a 7% decline, while in Tokyo, SoftBank Group Corp slid 8.3%. SoftBank's drop follows its recent partnership announcement, backed by the White House, to invest up to $500 billion in AI infrastructure.  On Wall Street, shares of Constellation Energy plunged 19.3%. The company had planned to restart the dormant Three Mile Island nuclear power plant to provide energy for data centres operated by Microsoft.  Investors sought safer alternatives amid the market volatility, leading to a rally in bonds. The yield on the 10-year Treasury note fell from 4.62% late Friday to 4.54% on Monday.  The AI sector, previously a major driver of market growth, experienced a sharp reversal. Companies such as Nvidia, which saw its stock skyrocket from under $20 to over $140 within two years, bore the brunt of the sell-off.  Other leading tech firms, often referred to as the "Magnificent Seven" — Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla — have collectively dominated the market. They accounted for over half of the S&P 500’s total returns last year, according to S&P Dow Jones Indices.  The heavy reliance on a few tech giants has heightened the market's "concentration risk," experts say. Brian Jacobsen, chief economist at Annex Wealth Management, warned, “This can feel good when those few names are on the ascent, but it is even more dangerous when disruptions take place.”  However, Jacobsen urged against overreacting to Monday’s sell-off. “It’s possible the news out of China is overstated, and we could see a reversal. Even if true, it could present new investment opportunities,” he added.  US stocks hover near records during quiet Thursday The market's next moves may depend on upcoming earnings reports from major players, including Apple, Meta Platforms, Microsoft, and Tesla. These companies are scheduled to disclose their fourth-quarter results later this week.  Pressure remains on corporations to deliver robust profits, especially as rising Treasury yields have made bonds more attractive. Higher bond yields often weigh on stock prices by increasing the opportunity cost of investing in equities.  So far, corporate earnings have generally exceeded expectations. AT&T’s shares rose 6% on Monday after the company reported better-than-anticipated results.  Outside the US, market responses were less dramatic. European indexes saw modest declines, with France’s CAC 40 dipping 0.3% and Germany’s DAX losing 0.5%.  In Asia, China’s Shanghai Composite edged 0.1% lower after a survey revealed a five-month low in export orders for Chinese manufacturers.  Later this week, the Federal Reserve will convene its latest policy meeting. Recent economic data suggest the Fed is unlikely to cut interest rates, with traders widely expecting it to hold steady.