In brief: DeepSeek's AI chatbot, which has sent the tech industry into a chaotic scramble, is officially banned by the US Navy, which told personnel to avoid using the app due to "potential security and ethical concerns associated with the model's origin and usage." It's important to note, though, that other apps, including ChatGPT, are also banned.

Chinese startup DeepSeek released its open-source R1 AI model this month, trained using 671 billion parameters using just 2,048 Nvidia H800s and $5.6 million – a fraction of the resources required by tech giants who spend billions on their AI systems. The prospect of companies no longer having to buy Nvidia's expensive flagship GPUs sent the company's market value down by a record $600 billion and wiped even more off the stock market.

DeepSeek, owned and operated by a hedge fund in Hangzhou, China, is currently topping the Apple App Store free app charts, but the US Navy won't be using it. A spokesperson for the military branch confirmed that the AI was to be avoided by members, who were told to refrain from downloading, installing, or using the DeepSeek model "in any capacity." The ban covers both work-related and personal use.

The move is said to be part of the Department of the Navy's Chief Information Officer's generative AI policy.

CNBC reports that the instructions came from an email that states, "We would like to bring to your attention a critical update regarding a new AI model called DeepSeek." The warning was based on an advisory from Naval Air Warfare Center Division Cyber Workforce Manager.

A Navy official told Business Insider that the email was sent to fewer than 40 personnel but was circulated more broadly.

While the email is focused on DeepSeek – and there's mention of the model's origins – the official said the app falls under 2023 guidance telling service members not to use generative AI tools, including ChatGPT, due to the risks of data being compromised.

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"The internal correspondence was a reminder to colleagues of standing Navy guidance against the use of any publicly accessible, open-source AI programs or systems for official work," the spokesperson said. "DeepSeek was mentioned as the most recent example of how the standing guidance applies."

Following the market disruption after DeepSeek's release, former Intel CEO Pat Gelsinger said he was investing in Nvidia and that the reaction had been "wrong."

DeepSeek had to pause new signups recently due to a large-scale malicious attack – likely a DDoS attack. There was more bad news for the company this week when it was reported that OpenAI and its main investor, Microsoft, were investigating DeepSeek for allegedly accessing OpenAI's data output illegally to train its AI model.