(Co-author: Matthew Tykonovsky)
On April 16, the House Selection Committee on the Communist Party of China (CCP) released a report on the AI model of Chinese companies of Deepseek, a Chinese company, on the findings from the committee’s Deepseek investigation. The report highlights the risks that Deepseek’s model poses to US technical leadership and the risk that Deepseek will use US export-controlled NVIDIA chips to power AI models. Nvidia is the American AI chip and semiconductor giant and has been subject to chip export controls under the Biden administration, which is maintained by the Trump administration since 2022. This report comes when the Department of Commerce (commerce) imposes additional restrictions on Nvidia’s chip exports. This is the first such restrictions under the Trump administration. Congress is also considering legislation to tighten restrictions on technology exports to China, where fate is uncertain.
On April 16, the Bipartisan House Selection Committee on the Communist Party of China (CCP) released a report on the AI model of Chinese companies Deepseek. As we covered, the release of Deepseek’s AI model, which rivals the US AI model, but obviously costs a few minutes, sent a shockwave throughout the AI industry earlier this year. The Select Committee report highlights the risks that DeepSeek models pose to US technical leadership and the risk that DeepSeek will use US export-controlled NVIDIA chips to supply the models.
The report comes when the Commerce Department imposes additional restrictions on Nvidia’s chip exports. This is the first such restrictions under the Trump administration. Congress is also considering bipartisan laws to tighten restrictions on technology exports to China, where fate is uncertain.
Select Committee DeepSeek Report
The Select Committee Report perspective is revealed under the title “Deepseek Unmasked: Expose the latest tools for CCP to spy, steal and destroy restrictions on US export controls.” In Support, this report includes four main findings from the committee’s DeepSeek survey.
Deepseek shares American data with the People’s Republic of China (PRC). According to the report, “Deepseek retrieves extensive personal data about Americans who use chatbots, including chat history, device details, and even the type of person. So, with its own admission, it will directly return the data to China and create a pipeline of problematic foreign data access.” Deepseek manipulates the results and matches CCP propaganda. “Deepseek chatbots change or suppress responses to topics deemed politically sensitive by the CCP in 85% of cases, and align the output directly with Beijing’s censorship directive,” the House investigation found. Deepseek used model distillation technology to create mimic AI models from US AI models. The committee determined that “Deepseek is likely to use model distillation technology to create mimicking AI models.” Distillation of the model “includes systematic extraction and replication of the inference capabilities of existing AI models, facilitating their own development by reducing costs,” a US AI high-tech company told the committee that Deepseek had distilled and mimicked the model. DeepSeek built an AI model using export controlled NVIDIA chips. “Deepseek’s AI model appears to be equipped with advanced chips provided by the semiconductor giant Nvidia, and reportedly uses tens of thousands of chips currently restricted from exports to PRC,” the report said.
The Select Committee has prepared two recommendations in its report.
Take action “to expand export control” and “improve the enforcement of export controls.” Policy recommendations include increasing funding to the Commercial Industrial and Security Bureau to expand export control analysis, strengthening existing export controls, and “creating incentives for industrial insiders and external parties to report export control violations.” “Prevent and prepare for advanced AI-related strategic surprises.” The Select Committee recommends that agencies coordinate and “prepare for the use of AI capabilities by the enemy” to “promote AI innovation and adoption.” They also recommend that the Commerce Department closely monitor “PRC AI progresses towards highly advanced systems.”
Select a committee letter to Nvidia
On April 16, 2025, Select Committee Chairman John Mourenar (R-MI) and Rankings member Raja Krishnamoulti (D-IL) sent a letter to Nvidia CEO addressing concerns about the possibility of Deepseek’s Nvidia chips. According to lawmakers, “Deepseek’s ability to develop cutting-edge AI models suggests that loopholes or indirect channels may still exist in Nvidia’s US export controls.”
In their letter, lawmakers requested that Nvidia share the following information:
A list of customers who purchase certain AI chips and are based in China or certain Asian countries will be to sign a contract between NVIDIA and DeepSeek and a contractual agreement between NVIDIA and “PRC entities that are prohibited or restricted by the US government.”
Nvidia will need to respond to lawmakers’ information requests until April 30, 2025.
Commerce imposes new export controls on Nvidia chips
Reports say in early April, Commerce imposed new export controls on the sale of some of Nvidia’s chips to China. Commerce reportedly blocked the sale of certain NVIDIA chips to China without a license, and a license will be required for future exports of such chips.
The new export restrictions are the first of their kind under the Trump administration, and are built on the AI chip export controls that the Biden administration first issued.
Congress considers laws restricting the export of technology to China
Snippets of the law restricting technology exports to China have been introduced in both homes.
Foreign Investment Guardrail to Support China Law (Combat) (HR 2246/s. 1053): The law was introduced in the House of Representatives by Rep. Andyver (R-KY) and in the Senate by Senator John Cornyn (R-KY) and has bipartisan co-stars in both chambers. Separation of American Artificial Intelligence Capabilities from the China Act of 2025 (S. 321): The law introduced by Sen. Josh Hawley (R-MO) prohibits the import and export of AI technologies from China. It also prohibits US people from conducting AI-related research or creating AI technology “too knowingly retain or control or extend profits” of “interest or lending” of any credit or extension of any credit or extension. China Technology Transfer Control Act 2025 (HR 1122): The law introduced by Rep. Mark Green (R-TN) delegates the president to control or re-export exports or re-exports to the People’s Republic of China, including AI.”
All bills have been featured in the relevant committees currently sitting. As we wrote, the fight law and other AI-related bills have bipartisan support in Congress, but GOP lawmakers could await the release of the Trump administration’s AI plan of action in mid-July before gazing on a well-defined approach to AI or ACT to the AI Act.
We will continue to monitor, analyze and publish reports on these developments. If you have any questions about current practices or ways to proceed, please feel free to contact us.
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