Popular AI app faces US ban (just like TikTok) (2025)

For the many people wondering what artificial intelligence (AI) policy will look like under President Donald Trump, a recent development may offer some insight.

Since before Trump took office, many people have wondered how his administration will address AI regulation, something that plenty of experts believe is necessary for the U.S. economy to continue maintaining healthy growth.

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While both President Trump and Vice President JD Vance have made it clear they support less regulation and want to help the U.S. achieve global AI dominance, few specific details have been offered. So far, the administration’s tariff policies have negatively impacted leaders such as Nvidia (NVDA) , which is caught in the crossfire of fierce trade tensions between the U.S. and China.

However, the White House is reportedly considering something that could benefit certain U.S. tech companies, though it could further strain its already complicated relationship with China.

Trade tensions between the US and China are impacting tech

As the market turned a new corner into 2025, investors carried high hopes that leading AI companies would continue to grow. Both established tech leaders and innovative new startups were making notable progress, while many tech stocks continued to trend upward.

Late in January 2025, though, things took a sharp turn as a previously unknown company entered the ring. A Chinese AI startup called DeepSeek shocked the world as it rolled out its R1 AI model, built on less advanced AI chips and trained for a fraction of what some CEOs claimed it costs to train large language models (LLMs).

This unexpected development triggered a massive selloff, as chipmakers such as Nvidia and Advanced Micro Devices plunged on declining investor confidence. Over the following weeks, DeepSeek’s R1 garnered popularity, producing a spot for itself among models made by OpenAI, Microsoft, and Anthropic.

Now, however, this new competitor may have a much harder time procuring a share of the U.S. market than previously anticipated. The Trump administration imposed restrictions on U.S. companies that sell AI chips to Chinese companies. This is a blow to both Nvidia and DeepSeek, which trained its model on Nvidia graphics processing units (GPUs).

That’s only the beginning, though. Sources have indicated they may also impose penalties that would prevent DeepSeek's purchases from U.S. tech companies and may even ban U.S. users from accessing the AI model.

“The attacks on DeepSeek and Nvidia are an outgrowth of fear in Washington that China could leapfrog the United States in A.I., which would have wide-ranging implications for national security and geopolitics,” the New York Times reports. “If China took the lead, it could more quickly use A.I. systems to design next-generation weapons like autonomous missiles and drones.”

This follows other concerns of China overtaking the U.S. and achieving global AI dominance. Experts such as former Alphabet CEO Eric Schmidt have speculated that such a scenario is becoming increasingly likely, particularly following the rise of DeepSeek.

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In an editorial published by the Washington Post, he stated that “DeepSeek’s R1 and Janus Pro show just how quickly the tides of technological supremacy can turn,” granting an advantage to China. Now escalating trade tensions between the U.S. and China threaten to help the latter gain even more of an edge.

What would a DeepSeek ban mean for the US market?

DeepSeek isn’t the first popular Chinese app the U.S. has considered banning. Video-sharing platform TikTok has been caught in regulatory crossfire for months, though President Trumprecently,for the second consecutive time,pushed back the deadline for its parent company to sell it.

While DeepSeek is by no means as popular, this decision still raises questions regarding what a U.S. ban would mean for the AI market. More than likely, it would be a significant win for companies that produce models, as it would mean one less competitor for companies such as OpenAI and Anthropic.

However, these decisions from the Trump administration still pose negative prospects for Nvidia, as they include restrictions that would block the company from selling AI chips to China. If tech companies in other countries begin relying more on their own technology for AI infrastructure, it stands to severely compromise the U.S.’s global influence.

There’s no denying that tech companies are starting to feel the effects of the trade war. Banning DeepSeek may not seem significant, but the White House is reportedly considering other policies that could set a dangerous precedent for some tech stocks.