Chinese artificial intelligence firm DeepSeek has reportedly closed a significant funding round, raising approximately $15 billion. This development follows closely on the heels of a U.S. government order mandating federal agencies to remove DeepSeek's technology from their information technology systems due to national security risks.
The U.S. Department of Homeland Security (DHS) issued an order on October 19, 2026, directing all federal civilian agencies to cease procurement of DeepSeek products and to remove existing DeepSeek technology from their networks. This directive, signed by DHS Secretary Markwayne Mullin on July 24, 2026, cited concerns over data handling and potential intelligence risks associated with Chinese-developed AI systems. The order specifically targets Hangzhou DeepSeek Artificial Intelligence Co., Ltd., its affiliates, and any third-party products or services developed using DeepSeek implementations. This marks the first instance of a company-specific AI ban by the U.S. government amidst escalating technology tensions with China.
Despite the U.S. government's restrictions, which apply only to federal agencies and not the private sector, DeepSeek has attracted substantial investment. Reports indicate the company's latest funding round nearly doubled its initial target, with major Chinese corporations such as battery maker Contemporary Amperex Technology (CATL) and tech giant Tencent participating. Other investors reportedly include chipmaker GigaDevice, food delivery company Meituan, and automaker Geely, alongside existing shareholders. The total number of investors involved is said to exceed fifteen. Prior to this round, DeepSeek was reportedly valued at approximately $74 billion.
DeepSeek's founder, Liang Wenfeng, stated in September that the company's annualized revenue run rate had reached $1 billion. The company is also investing in domestic computing infrastructure to reduce its reliance on foreign chips, partnering with Huawei Technologies for some training workloads. The firm has hired Yan Wentao, a former venture capitalist, as its chief financial officer and has engaged state-owned investment bank Citic Securities to advise on a potential initial public offering (IPO) on the Shanghai Stock Exchange.
The DHS order, issued under the Federal Acquisition Supply Chain Security Act of 2018, requires agencies to comply with exclusion and removal directives. Agencies had a 60-day window from the order's issuance date to request exceptions, a period that had expired by the time the public notice was released on October 19, 2026. The directive does not define "DeepSeek implementations," creating a need for agencies and contractors to assess third-party products for any use of DeepSeek technology. This move is part of a broader U.S. strategy to address supply chain security risks associated with technology from China.