The U.S. Navy has issued a directive prohibiting its members from using AI models developed by Chinese startup DeepSeek, citing security and ethical concerns, CNBC reports.

In an internal email, the Navy explicitly banned the use of DeepSeek’s AI “in any capacity,” warning of potential risks associated with the model’s origins and applications.

The decision comes after DeepSeek introduced R1, a reasoning AI model positioned as a competitor to OpenAI’s technology. The startup has drawn significant attention in Silicon Valley by developing its model at a fraction of the cost incurred by industry giants like OpenAI, Anthropic, and Microsoft.

The rapid advancements by DeepSeek have sent shockwaves through the AI sector. On Monday, shares of AI chipmakers Nvidia and Broadcom plunged 17%, wiping out a combined $800 billion in market value.