Microsoft has officially banned its employees from using the Chinese-based AI app DeepSeek.
The company's Vice Chairman Brad Smith informed the US Senate that the company banned the Chinese-based AI app due to increased data security and propaganda concerns.
Microsoft bans DeepSeek app for employees
The American tech giant further confirmed that it won’t list DeepSeek in its app store, increasing scrutiny of Chinese AI companies following heightened geopolitical tensions.
Smith further said that DeepSeek stores user data on Chinese servers—posing a significant threat under Chinese intelligence laws.
Previously, the company hosted DeepSeek’s open-source R1 model on Azure, it only did so following what Smith called "rigorous red teaming” to remove dangerous content.
The significant move indicates the American tech giant’s strategic transition towards stricter AI governance.
The DeepSeek ban is part of the company’s wider reassessment of its cloud infrastructure strategy.
The company’s Azure cloud business, which now contributes 30% of its revenue, is now positioned as a protected alternative for enterprise clients concerned about foreign data exposure.
A report suggested that Microsoft has called off hundreds of megawatts in US data center leases, reflecting a pivot toward locally compliant configurations.
Notably, the latest move brings both risk and resilience for investors.
However, the geopolitical frictions may weigh on near-term infrastructure development, the company’s 15% year-to-date stock indicates market assurance in its long-term cloud and AI strategy.
