DeepSeek Escapes US Ban — And Just Raised $7.4B. Here's Why That's a Double-Edged Sword

DeepSeek, the Chinese AI company behind the open-source DeepSeek V4 model, is reportedly avoiding a US ban for now. According to Reuters, the Trump administration is holding off on adding the company to the U.S. Department of Commerce's Entity List — a trade restriction that effectively blocks foreign entities from operating in the U.S. DeepSeek was one of over 100 companies approved for the list last year, but sources say the government is postponing the move to avoid further aggravating relations with China. This temporary reprieve comes even as New York and Texas previously banned DeepSeek from government devices over national security concerns.

Meanwhile, DeepSeek has made major financial gains. The company raised over 50 billion yuan ($7.4 billion) in its first funding round this week, valuing it at over $50 billion. While that's far below U.S. rivals like OpenAI ($852B valuation) and Anthropic ($965B), DeepSeek's open-source model — available under an MIT license — offers a unique competitive advantage. The U.S. has also restricted exports of advanced chips to China, with NVIDIA losing 95% of its Chinese market share, though DeepSeek may still access throttled chips. The company's funding and continued access to the U.S. market signal its growing influence in the global AI race.