Overview
On October 20, 2026, the U.S. Department of Homeland Security (“DHS”) announced that it had excluded DeepSeek products and services from U.S. Government procurement. DHS issued its exclusion order in July and relied on an authority that the Department of War recently relied on to issue a supply-chain security designation for Anthropic earlier this year.
Based in China, DeepSeek develops open-weight artificial intelligence models that made headlines at the beginning of 2025 for achieving frontier-level capabilities that it claimed were developed at a fraction of the cost of comparable models. DeepSeek’s models are popular among enterprises and developers due to their high performance and ability to be deployed on premises without working through a model developer on its proprietary cloud.
Although contractors can request that affected procuring agencies seek waivers of the rule, the order generally requires civilian agencies to exclude products and services from DeepSeek and its affiliated entities from procurements going forward. However, it also goes further than other supply chain actions taken to date in that it requires civilian agencies to remove from their information technology systems any products or services “developed using DeepSeek implementations” even if an unrelated party performed the development. In other words, the order appears to require civilian agencies to remove and no longer procure for their information technology any products or services developed by U.S. Government contractors using DeepSeek models or potentially other items provided by DeepSeek, such as its open-weights.
Moreover, at the same time, DHS uploaded the exclusion order to a database that triggers requirements under the Federal Acquisition Supply Chain Security Act. As a result, although not clearly stated in the order, contractors that are subject to FAR 52.204‑30 may need to also refrain from using DeepSeek products and services—and potentially other third-party products or services “developed using DeepSeek implementations”—in the performance of civilian agency contracts.
Under this clause, orders do not apply to existing contracts unless required under a contract modification. However, even under existing contracts, contractors are required to report products or services delivered or used in performance from a source covered by an order. This reporting obligation presumably, although not clearly, only covers products and services provided by DeepSeek and its affiliated entities and not third-party developers deemed to be “using DeepSeek implementations.”
In addition, if civilian agencies are required to remove such items from their information systems, contractors may receive instructions to provide replacement items on existing contracts. As a result, contractors may have opportunities to request adjustments in schedule and price.
Regardless, contractors will need to consider whether they use DeepSeek models or weights for any purposes and, if so, whether such use occurs in performance of a civilian agency contract or involves development of a product or service that could ultimately be delivered to a civilian agency. Similarly, contractors will need to consider their supply chains because subcontractors may be using covered products or services without a contractor’s knowledge.
If the Department of War’s approach to the Anthropic determination is any indication, contractors should expect to receive requests to identify any products or services provided by DeepSeek or its affiliated entities, or “developed using DeepSeek implementations,” that have been delivered or used in performance. It will be critical to see how agencies interpret whether a product or service is “developed using DeepSeek implementations” because that concept raises many unanswered questions. For example, if DeepSeek model weights are covered, it is not clear whether fine-tuning or modifications to those weights would be covered as well. It is also not clear whether outputs generated through use of a DeepSeek model or model weights are covered by the order when used to train another model. In fact, outputs themselves, such as software code, could even be covered by the order’s language.
Notably, the order does not cover procurements by the Department of War or the Office of the Director of National Intelligence. These agencies are outside the scope of the DHS's exclusion authority. However, they could take a similar approach and issue a corresponding order in the future.
