The DeepSeek Ban Hits the Vendors Who Wrapped It

The Department of Homeland Security published notice on October 20, 2026, of an order that bars DeepSeek products from federal civilian agency systems. The signed order is dated July 24, 2026. It also covers third-party software built using DeepSeek implementations.

Hangzhou’s chatbot was already boxed out of Pentagon networks and intelligence systems. The people who have to hunt through code this month are the vendors who wrapped those weights and sold the result to civilian agencies.

A July Order Reached the Public in October

The notice ran in the Federal Register as document 2026-21447, Volume 91, Number 201, pages 66346 to 66350. DHS filed it on October 19, 2026, at 8:45 a.m., under docket DHS-2026-0628. James H. Percival II, the department’s general counsel, signed the notice.

The paper is a notice of an order already issued under the Federal Acquisition Supply Chain Security Act of 2018, 41 U.S.C. 1321-1328, after a Federal Acquisition Security Council recommendation. Homeland Security Secretary Markwayne Mullin signed Exclusion and Removal Order 2026-01 with an original release date of July 24, 2026, 88 days before the Register printed it.

Both duties take effect immediately after issuance. Agencies must stop buying information technology from Hangzhou DeepSeek Artificial Intelligence Co., Ltd and its affiliates, as 48 CFR 2.101 defines control. They must also pull DeepSeek products, affiliate products, and “third-party products and services developed using DeepSeek implementations” out of civilian agency systems, or seek an exception.

THE PAPER TRAIL

1. December 18, 2025: Congress enacts the fiscal 2026 defense authorization act, Public Law 119-60, with DeepSeek limits for the Pentagon and the intelligence agencies.
2. January 17, 2026: The Pentagon contractor ban in Section 1532 takes effect, 30 days after enactment.
3. July 24, 2026: The secretary signs Exclusion and Removal Order 2026-01 for civilian executive branch systems.
4. September 22, 2026: Day 60 after July 24, the date a clock started at issuance would close for agency exception requests.
5. October 19, 2026: DHS files the public notice at 8:45 a.m.
6. October 20, 2026: The Federal Register publishes the notice, and China’s foreign ministry answers questions in Beijing.

The Register’s exclusion and removal of DeepSeek products is the public stamp on work the secretary already ordered in July. A copy of the signed order in the docket appendix is posted on Regulations.gov. Questions go to CISA’s FASCSA team at fascsa.orders@cisa.dhs.gov.

The Ban Also Covers Tools Built on DeepSeek

A DeepSeek-branded app on a government phone was the easy case, and several agencies had already taken that step on their own devices. The order’s harder sentence is the one that names software other companies built on DeepSeek implementations. The notice never defines that phrase.

Exclusion reaches the channels agencies actually buy through, including approved product lists, service provider equipment lists, and e-commerce markets. Removal reaches whatever is already installed. National security systems and sensitive compartmented information systems sit outside this DHS order, because the 2018 law gives those networks to the Defense Department and the Director of National Intelligence.

That split is why a headline that says the United States banned DeepSeek is too wide. Private firms, ordinary users, and state and local governments are not bound by this notice. The civilian executive branch is.

SOFTWARE THE THIRD-PARTY CLAUSE CAN CATCH

• A model picker: A vendor’s chatbot that routes a prompt to whichever model is cheapest that day, including a DeepSeek checkpoint.
• A silent backend: A document tool whose interface never prints the word DeepSeek but calls a DeepSeek implementation to draft or classify text.
• Local open weights: A copy of a DeepSeek model running on a contractor’s own hardware in the performance of a civilian agency contract.

Cheap open weights were already good enough to show up in those products. A ban limited to Hangzhou’s own app would have left the prompt path DHS says it worries about.

What Federal Contractors Have to Report

Agencies can ask DHS for an exception, a delay, or a narrower reading, in writing, within 60 days of issuance. Only the agency can file. A vendor that sold the software cannot. Until removal is finished, the order encourages agencies to watch traffic in and out of their networks, raise logging, and tighten controls on data leaving the building.

Contractors live under a different clock. The Federal Acquisition Regulation clause at 52.204-30 bars them, unless a waiver is in place, from providing or using a covered article or a product from a named source once a DHS FASCSA order applies. During performance they must search SAM.gov for the phrase “FASCSA order.” If they find that a covered article already went to the government, they must report it within 3 business days to the contracting officer.

THE CONTRACTOR CLOCK UNDER FAR 52.204-30

For Defense contracting offices the first report goes to dibnet.dod.mil. For civilian offices it goes to the contracting officer. Subcontractors report up the chain. The clause does not wait for a courtesy email from Hangzhou. A reasonable inquiry, as the FAR defines it, is a search of information the company already has. It does not require a paid audit.

The Pentagon Rule Has Been Live Since January

Civilian agencies are late to a fight Congress already wrote into the fiscal 2026 defense bill. Section 1532 told the secretary of defense, within 30 days of December 18, 2025, to keep DeepSeek AI off department systems and to stop contractors from using that AI in the performance of a Defense contract. That contractor bar took effect on January 17, 2026.

Covered artificial intelligence, as the section defines it, is AI developed by DeepSeek, or by High Flyer, or by an entity High Flyer owns, funds, supports, or holds at least a 20 percent stake in. High Flyer is the hedge fund behind the lab. The text does not care whether the weights sit in a US cloud or on a rack in Virginia. The secretary of defense may waive the rule case by case for research, testing, counter-terrorism and counterintelligence work, and mission-critical functions.

Section 6604 is narrower. It told the Director of National Intelligence to issue standards, within 60 days of enactment, for removing the DeepSeek application and any successor from national security systems run by or for the intelligence agencies, including by contractors. That standards deadline fell on February 16, 2026. Those standards must allow exceptions for national security work and research.

THREE FEDERAL BARS ON DEEPSEEK

US model vendors are the replacement stack for the civilian side. That is a procurement outcome, not a consumer verdict on who trains the better model.

DHS Says Prompts Could Move Data to China

The signed order’s risk page is short and specific. It says DeepSeek’s models present “multiple threat vectors.” It points to servers in China and to Chinese law that gives state cyber and intelligence services wide access to private companies’ infrastructure. Account sign-up, the order says, collects personal information and may track and fingerprint users.

Use of the product may result in the transfer of sensitive data to the PRC if used by U.S. government employees or vendors. That data, alone or combined with public information, could produce actionable intelligence on U.S. persons and/or government programs. The models themselves may contain malware or other security vulnerabilities.

Department of Homeland Security, Exclusion and Removal Order 2026-01

The prompt-and-response design is the mechanism, not a side issue. Whatever a federal worker or a contractor types in can leave the agency’s perimeter. DHS also cited open research that found serious flaws in DeepSeek’s iOS app. The order does not claim every downstream product is already shipping secrets to Hangzhou. It claims the path exists, and that civilian agencies should not keep walking it.

Beijing Objects, Then Drafts Its Own Export List

China’s foreign ministry answered the October notice, not the July signature. Spokesperson Mao Ning spoke at the regular briefing on October 20, 2026.

China consistently opposes overstretching the concept of national security and politicizing science and technology as well as economic and trade issues. We will resolutely safeguard the legitimate rights and interests of Chinese enterprises.

Mao Ning, Foreign Ministry spokesperson, Beijing briefing

The commerce ministry was sharper the same day. It said Beijing was strongly dissatisfied, urged Washington to “immediately correct wrong practices” and “revoke relevant discriminatory restrictive measures,” and said China would “take all necessary measures” to protect its interests. The ministry also said the order disregarded understandings reached by the two countries’ leaders and pointed to the China-US artificial intelligence dialogue as the channel it wants used.

Four days earlier, on October 16, 2026, the Ministry of Commerce and the Ministry of Science and Technology published a draft adding 40 technologies to China’s catalogue of items banned or restricted from export. Twenty-three of those entries are in AI, with 12 in solar power and 5 in biomedicine. Of the 40, 14 would be prohibited and 26 restricted. The AI block covers large models, agents, computing clusters, and information processing, including chip-design know-how.

The two capitals are building walls in the same week and calling the other side the one politicizing the trade. China’s draft is still a proposal. The DHS order is not.

How Far Do DeepSeek Implementations Reach?

The phrase in the removal duty is the fight vendors will have with contracting officers. Does a fine-tuned model that started from DeepSeek weights still count? Does a one-time distillation run? Does a router that can call DeepSeek, even if the agency never selected that route? The notice does not say. The FAR still expects a reasonable inquiry and a three-day report if the company concludes that a covered article already went out the door.

WHAT WE KNOW

• The duties: Exclusion from civilian procurement and removal from civilian IT both took effect immediately after the July 24, 2026, issuance, including third-party products developed using DeepSeek implementations.
• The public stamp: The Federal Register notice is dated October 20, 2026, and points readers to docket DHS-2026-0628 for the signed order.
• The contractor clause: FAR 52.204-30 already sits in civilian contracts and requires SAM checks plus a three-day report if a new FASCSA order hits something already delivered.

WHAT IS UNCONFIRMED

• The exception clock: The order gives agencies 60 days from issuance to ask for relief. If that clock started on July 24, it closed on September 22, 2026, 28 days before the notice. DHS has not, in the public notice, restated whether any late request will be read.
• The word “implementations”: The notice does not define it, so vendors and agencies will argue over fine-tunes, routers, and self-hosted weights until CISA answers a specific case.
• How much is actually installed: DHS has not published an inventory of DeepSeek use across civilian systems, so the removal job could be a handful of pilots or a long tail of buried model calls.

Agencies that waited for the Register still have a live removal duty written as “immediately.” Contractors who find a hit do not get the luxury of that argument. They get three business days.

Frequently Asked Questions

Does the DeepSeek Federal Order Ban the App for Ordinary Americans?

No. The order does not restrict private companies, consumers, or state and local governments, and it does not apply to Congress or the courts. National security systems are carved out because the Defense Department and the Director of National Intelligence issue their own FASCSA orders for those networks.

Can a Vendor File for an Exception to the DeepSeek Order?

No. Only the executive agency can ask the DHS issuing official for an exception, a delay, or a narrower reading, and CISA answers in writing at fascsa.orders@cisa.dhs.gov. Vendors that sold a covered product still have to tell the contracting officer if they find one in performance.

What Is High Flyer Under the Pentagon DeepSeek Ban?

High Flyer is the quantitative hedge fund that founded DeepSeek. Section 1532 covers AI developed by High Flyer and by any entity High Flyer owns, funds, supports, or holds at least a 20 percent stake in, and the bar does not turn on whether the model is hosted in a US cloud or on a local server.

Does China’s Draft Stop DeepSeek Use Through an App or API?

The commerce ministry said API access, websites, apps, and software-as-a-service would not count as an export under the October 16, 2026, proposal, and technology already public through open-source releases or papers would sit outside the controls. Comments on the draft run through November 15, 2026.

How Often Do Contractors Have to Look for New FASCSA Orders?

They must search SAM.gov at least once every three months, or sooner if the contracting officer directs, using a reasonable inquiry that does not require an internal or third-party audit. A new order found there still has to be reported if a covered article already went to the government.