In the rapidly evolving landscape of artificial intelligence (AI), the emergence of new players can significantly disrupt existing paradigms. One such entrant is DeepSeek, a Chinese AI startup that has recently garnered attention for its innovative approaches and competitive performance metrics. As enterprises consider integrating DeepSeek into their operations, it is imperative to understand not only its capabilities but also the legal, data privacy, and intellectual property implications associated with its use.
Sommaire
I – Overview of DeepSeek
A – Development and Release
DeepSeek, officially known as Hangzhou DeepSeek Artificial Intelligence Co., Ltd., unveiled its open-source R1 model on January 27, 2025. This release sent ripples through the U.S. technology sector, particularly as reports highlighted that DeepSeek achieved performance levels comparable to established models like OpenAI’s o1-mini, but at approximately 5% of the development cost. This development challenges the prevailing notion that advancing large language models (LLMs) necessitates substantial capital and computational resources.
B – Key Features and Performance
DeepSeek’s R1 model is designed to handle a variety of complex tasks with notable efficiency. Its open-source nature allows users to download and run the model locally, eliminating the need for data storage on cloud platforms controlled by DeepSeek. This flexibility has attracted a surge of AI developers exploring DeepSeek as a viable alternative to existing models.
II – Legal Considerations for Enterprise Users
A – Data Ownership and Usage Rights
Enterprises must exercise caution when utilizing DeepSeek’s online platforms, such as its iOS, Android, or web chatbot interfaces. DeepSeek’s privacy policy grants the company broad rights to exploit user data collected through prompts or from user devices. This includes monitoring interactions, analyzing usage patterns, and using data to train and improve their technology. Additionally, DeepSeek reserves the right to share collected information with advertising and analytics partners, as well as third parties in connection with corporate transactions.
B – Compliance with International Trade Laws
The storage of all personal data on servers located in China introduces complexities concerning international trade laws that restrict or prohibit data transfers to certain foreign countries, including China. Companies should thoroughly review DeepSeek’s privacy terms to ensure compliance with their internal data security policies and external commitments to customers.
III – Data Privacy and Security Concerns
A – Data Storage and Transfer
DeepSeek’s practice of storing user data on servers within the People’s Republic of China (PRC) raises significant data privacy concerns. The PRC’s regulatory environment differs markedly from frameworks like the General Data Protection Regulation (GDPR) in the European Union or the California Consumer Privacy Act (CCPA) in the United States. Users should be aware that their data may be subject to local laws that permit government access without the stringent safeguards found in other jurisdictions.
B – Potential Risks for Enterprises
For enterprises handling sensitive or proprietary information, using DeepSeek’s online platforms could pose confidentiality risks. The broad data usage rights claimed by DeepSeek may conflict with an organization’s obligations to protect client data or trade secrets. It is crucial for companies to assess these risks and consider whether running a local instance of DeepSeek’s model, thereby retaining full control over their data, is a more suitable option.
IV – Intellectual Property Challenges
A – Allegations of Unauthorized Use
Recent reports indicate that OpenAI has accused DeepSeek of unlawfully using its AI models, raising significant legal and ethical concerns. OpenAI asserts that there is evidence suggesting DeepSeek illicitly utilized its models to enhance its own AI systems.
B – Implications for AI Development
These allegations, if substantiated, could have profound implications for the AI industry, particularly concerning the protection of intellectual property and the ethical development of AI technologies. Enterprises should monitor these developments closely, as they may impact the legal landscape surrounding AI tool usage and development.
V – DeepSeek AI: Privacy Concerns and Regulatory Actions in Europe
Unlike other AI models, DeepSeek is open-source and entirely free. However, its use raises significant concerns regarding data privacy, particularly in terms of compliance with the General Data Protection Regulation (GDPR).
European data protection authorities have expressed concerns about DeepSeek’s data collection and processing practices. For instance, the Luxembourg National Commission for Data Protection (CNPD) has warned about the risks associated with using DeepSeek, emphasizing that user input may be recorded, transferred, stored, or analyzed without a clear data protection framework. The absence of a DeepSeek representative in the European Union complicates GDPR enforcement and makes it difficult for EU citizens to exercise their data rights.
In response, some regulatory authorities have taken concrete action. The Italian Data Protection Authority (Garante) ordered the blocking of the DeepSeek application in Italy after the company failed to provide requested information regarding its privacy policy and data processing practices.
These measures highlight the challenges posed by the rapid emergence of AI models like DeepSeek, particularly regarding compliance with European data protection regulations. European authorities continue to monitor these developments closely to ensure user data security and privacy.
Conclusion
DeepSeek represents a significant advancement in the AI field, offering promising capabilities that could benefit various enterprise applications. However, organizations must carefully weigh these advantages against the potential legal, data privacy, and intellectual property risks associated with its use. Conducting thorough due diligence and consulting with legal experts in data protection and intellectual property law is essential before integrating DeepSeek into business operations.
Need expert guidance on AI and intellectual property? Dreyfus Law Firm specializes in intellectual property law, including trademark, copyright, and AI-related legal matters.
Dreyfus Law Firm collaborates with a global network of IP attorneys to provide tailored legal solutions in the evolving field of AI and copyright.
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FAQ
1 – What is the link between artificial intelligence and personal data?
Artificial intelligence (AI) relies on processing and analyzing large datasets to learn, identify patterns, and make predictions. When AI processes information that can identify an individual (such as names, addresses, browsing history, biometric data, etc.), this data is considered personal and is subject to strict regulations, including the General Data Protection Regulation (GDPR) in Europe.
2 – How does artificial intelligence process data?
AI systems process data through machine learning and deep learning algorithms. These models are trained on large amounts of data to recognize patterns and improve predictions. The processing includes: • Collecting and storing data • Cleaning and structuring information • Analyzing trends and modeling predictions • Making automated decisions based on the analysis To comply with regulations, data must be used transparently, minimized, and secured.
3 – What is the legal framework for AI?
AI is regulated by multiple legal frameworks at both national and international levels. In Europe, it is primarily governed by: • The GDPR, which imposes strict obligations on the collection, processing, and storage of personal data. • The proposed EU AI Act, which aims to classify AI systems based on their risk level and impose specific obligations on developers and users. • Other sector-specific regulations, such as those related to consumer protection, cybersecurity, and liability for errors or damages caused by AI.
4 – Does AI collect your personal information?
AI can process personal information if it is designed to analyze user data (e.g., facial recognition, personalized recommendations, virtual assistants). However, companies and organizations using AI technologies must comply with principles of transparency, data minimization, and user consent. Responsible AI systems should integrate data protection mechanisms such as anonymization, encryption, and access control to prevent misuse or non-compliant processing.
5 – Does the GDPR apply to AI?
Yes, the GDPR applies to any AI system that processes personal data, regardless of the technology used. Key obligations include: • Obtaining explicit user consent for data collection and usage. • Complying with the principle of data minimization, meaning only collecting data that is strictly necessary. • Implementing security measures to protect data processed by AI. • Ensuring the right to explanation, allowing individuals to obtain information about automated decision-making processes. • Granting individuals the right to erasure of their personal data upon request. Any organization using AI must ensure that its systems comply with GDPR requirements and other applicable regulations.