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China's Tech Sector Shouldn't Grow at Expense of U.S. Companies

OPINION — DeepSeek's recent surge into the AI space has consumed tech, finance, and political news. Last week, the People's Republic of China (PRC) AI company released its new “R1” model, which claimed to be on par with OpenAI’s o1 model but created for a fraction of the cost. Many suspect that DeepSeek’s breakthrough was built on the back of stockpiled U.S. chips and export control loopholes. The announcement caused U.S. AI and semiconductor stocks to plummet, igniting a debate over the efficacy of U.S. export controls and implications for the global AI race.

The DeepSeek story demonstrates how PRC tech companies are looking to gain leverage from U.S. competitors, including by breaching terms of service agreements, stealing American data, and smuggling advanced U.S. technology. There is no doubt that the growing muscle behind Beijing’s tech industry comes at the expense of American technological leadership and innovation. The U.S. national security community understands this fact.


However, the national security-first lens must be a shared commitment among all U.S. policymakers, regardless of where they sit. It has become clear that U.S. regulators working on competition policy did not appear to share this commitment, despite claims to the contrary, after reporting indicated that the Biden administration’s Federal Trade Commission (FTC) was building its antitrust case against Amazon with information from Temu, a massive PRC e-commerce company and Amazon competitor.



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The FTC reached out to Temu before January 20, when the new Trump-appointed FTC Chair Andrew Ferguson took over the role from Biden-appointee Lina Khan. The Biden-era FTC did not seem to appreciate that Temu is not just a competitor to Amazon. It is a PRC champion that is gaining more and more data from Americans every day.

Temu has relationships with the Chinese Communist Party (CCP) and it is required to comply with the PRC’s National Intelligence Law, creating significant data security and propaganda risks for its users. Temu would willingly support any antitrust case against Amazon. Moreover, the FTC does not even consider Temu to be a competitor to Amazon because its definition of “online superstores” limits the field to Walmart, Target, and eBay. Apparently, the FTC took none of these elements into consideration. It should have.

The FTC should not rush to build a case against a U.S. company with information from a top competitor in an adversarial nation. The new FTC leadership must depart from this narrow-minded approach.

Tech competition with the PRC is one of the most important battles that America must win. Technological leadership ensures the ability to shape the rules of the road, protect our national security, and leverage innovation to improve the lives of all Americans. To do so, all U.S. policymakers should adopt a national security-first lens to ensure that their policies are not harming U.S. tech and helping their PRC competitors.

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The Cipher Brief is committed to publishing a range of perspectives on national security issues submitted by deeply experienced national security professionals.  Opinions expressed are those of the author and do not represent the views or opinions of The Cipher Brief.

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