Microsoft has officially prohibited its employees from using the Chinese AI application DeepSeek, citing serious concerns over data security and potential propaganda risks. The announcement was made by Vice Chairman Brad Smith during testimony before the US Senate, further intensifying scrutiny of Chinese AI platforms amid escalating geopolitical tensions.
Smith highlighted that DeepSeek stores user data on servers located in China, exposing it to the country’s intelligence laws and raising the possibility of sensitive data leaks. He also warned that misinformation could be embedded within DeepSeek’s AI-generated content. Although Microsoft previously hosted DeepSeek’s open-source R1 model on its Azure cloud service, Smith emphasized that it had undergone “rigorous red teaming” to eliminate harmful content before deployment.
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This move reflects Microsoft’s evolving strategy of tighter AI governance, with a heightened focus on data sovereignty and regulatory compliance. The company’s Azure cloud business, now contributing 30% of its total revenue, is increasingly positioned as a secure solution for enterprises concerned about foreign data exposure.
Microsoft’s decision comes as part of a broader shift in its cloud infrastructure strategy, with reports indicating the company has canceled hundreds of megawatts in US data center leases. Despite these adjustments, Microsoft’s stock has risen 15% year-to-date, underscoring investor confidence in its long-term AI and cloud roadmap.
