DeepSeek, a rising AI startup from China, has recently issued a warning that it is temporarily halting user registrations after its servers were hit by a large-scale cyber attack. Preliminary investigations suggest that the attack was a Distributed Denial of Service (DDoS) attack, a method in which fake web traffic is generated to overwhelm a server, preventing it from functioning properly and blocking legitimate users from accessing the service.
DeepSeek is known for offering an AI-powered chatbot service for free to Apple Inc. users, which appears to have made it a target for the cyber attack. The overwhelming traffic caused severe disruptions, forcing the company to take its service offline temporarily. The attack was later traced back to networked bots that flooded DeepSeek’s servers, triggering red alerts from the company’s threat monitoring systems and prompting the suspension of registration processes to mitigate further damage.
From a business perspective, DeepSeek has seen significant success, with its latest AI models gaining traction in major markets like the UK and the USA. The company’s AI chat assistants, including the DeepSeek-R1 powered by the DeepSeek-V3 model released on January 10th, have become popular among iPhone users. These models were praised for their transparency, performance, and consistency, as well as for being open-source creations, which contributed to their rapid adoption in Western markets.
As a result, DeepSeek has become a formidable player in the AI space, creating business opportunities for the startup, which was founded in 2023 by Baidu, the Chinese tech giant. However, this success also raises some concerns, particularly around the storage and handling of user data.
As DeepSeek’s services are now being used in countries like the USA and the UK, there is uncertainty about how the company plans to comply with data protection regulations. Current laws in both countries dictate that user data should be stored on local soil, prohibiting the transfer of such data to servers in China.
At present, there is little clarity on where DeepSeek will store and manage this data. Due to these uncertainties and the recent cyber attack, the company has halted registrations for users outside of China, allowing only Chinese phone numbers to register for the service, but only after official login procedures. Until these issues are resolved, it remains unclear how DeepSeek will navigate the complex landscape of data privacy laws in Western markets while continuing to grow its user base internationally.
