DeepSeek, a National Treasure in China, is Now Being Closely Guarded
• DeepSeek forbids some employees from traveling abroad freely
• Local government is screening potential investors before company meetings
• Some DeepSeek employees handed in passports
DeepSeek’s sudden rise to global stardom has earned the startup a status akin to national treasure in China. One result is restrictions on how the company operates.
In recent weeks, company executives have forbidden some of DeepSeek’s employees involved in the research and development of artificial intelligence models from traveling abroad freely, according to three people familiar with the company. Meanwhile, the government of eastern China’s Zhejiang Province, where DeepSeek’s parent company is headquartered, has begun screening any potential investors before they are allowed to meet in person with company leaders, according to two other people with knowledge of the situation.
To enforce the travel restrictions, DeepSeek and its hedge fund parent High-Flyer Capital Management asked some staff to hand in their passports, the three people said. The company said those employees’ work made them privy to confidential information that could constitute trade secrets or even state secrets, according to one of the people.
The sudden change of circumstances raises the question whether DeepSeek will continue to be as successful developing new AI products as it has been. People who work in China’s tech industry say DeepSeek’s low-profile and independence from venture capitalists and the government in the past two years has been key to its success.
DeepSeek, High-Flyer and the Zhejiang government didn’t immediately respond to emailed and faxed requests for comment.
DeepSeek became a global sensation in late January after the company released a deep reasoning model with performance on par with OpenAI’s similar model but trained at much lower costs. In China, the company has been hailed as a shining example of the country’s tech innovation and symbol of perseverance under Washington’s yearslong attempts to contain Beijing’s technological rise including restricting sales of Nvidia’s most cutting-edge chips to China.
Since January, DeepSeek CEO Liang Wenfeng has been invited to two gatherings attended by China’s leaders—one with President Xi Jinping and the other with his second-in-command Premier Li Qiang. Usually only the heads of the biggest companies in China are included in meetings with top leaders.
In the meantime, local governments and state-owned companies across the country have been racing to integrate DeepSeek models, which are open-sourced, into their IT infrastructure and work flow.
This makes DeepSeek’s research talent of critical importance not only to the company itself but, increasingly, to China, where state-owned media have described DeepSeek as a key impetus to AI adoption in both traditional and new economies, both private and public sectors.
Travel Restrictions
In China, authorities typically restrict overseas travel by government officials or state-owned company executives, whether they are Communist Party members or not. But in recent years, such restrictions have expanded to public sector workers such as school teachers and rank-and-file employees at state-owned companies.
Still, it’s highly unusual for employees at privately-owned startups like DeepSeek to be subject to such curbs. Two-year-old DeepSeek never raised any outside funding, as its research was financed entirely by its parent, High-Flyer, one of the largest quantitative trading funds in China.
It couldn’t be determined how many DeepSeek staffers have been put under travel restrictions. The startup has around 130 employees, while High-Flyer separately has about 200, according to two of the people familiar with the company. It’s also not clear whether the Chinese government instructed DeepSeek management to ask some employees for their passports.
In recent weeks, some investors who wanted to make investment pitches to DeepSeek were instructed by the company that they first need to reach out to the general office of Zhejiang Province’s Communist Party committee and register their investment inquiries with officials there, according to two financial advisors who tried to connect potential investors with DeepSeek. DeepSeek’s parent, High-Flyer, is headquartered in Hangzhou, the capital of Zhejiang Province and home to other tech giants including Alibaba Group and NetEase.
In addition, some headhunters in China who approached DeepSeek employees with potential job offers say they have received phone calls from Zhejiang government officials, asking them not to poach talent from DeepSeek.
DeepSeek’s leaders have been worried about the possibility of information leaking, and they have repeatedly told employees not to discuss their work with outsiders, according to three people familiar with the company’s operations. DeepSeek’s R&D team, mainly based in Beijing, continues to work on the development of new AI models such as R2, the successor to its highly successful R1 reasoning model, the people said.
Venture capitalists and tech giants like Alibaba alike have been jostling for a chance to invest in the company, although Liang remains on the fence about raising outside capital, The Information reported.