China appears to be taking drastic measures to ensure that homegrown AI startup DeepSeek doesn't become a conduit for leaking sensitive technology to the US. According to a report by The Information, the Chinese government has imposed strict travel restrictions on some of DeepSeek's employees, while also exerting control over the company's investment landscape.

The sudden clampdown comes on the heels of DeepSeek's remarkable rise to fame in January, when it released its open "reasoning" model, R1. The model's impressive capabilities have likely caught the attention of the Chinese government, which is now keen to ensure that the company's intellectual property remains within the country's borders.

As part of the new restrictions, DeepSeek's parent company, quantitative hedge fund High-Flyer, has been tasked with holding onto certain staff members' passports. This move effectively prevents these employees from traveling abroad freely, a development that has significant implications for the company's operations and employee morale.

The Chinese government's intervention in DeepSeek's affairs is also extending to the company's investment landscape. According to sources, the government is now playing a role in screening potential investors, a move that is likely intended to prevent foreign entities from gaining access to the company's sensitive technology.

The developments at DeepSeek come against the backdrop of growing tensions between China and the US over technology and trade secrets. Just a few weeks ago, it was reported that the Chinese government was instructing AI researchers and entrepreneurs to avoid traveling to the US, fearing the loss of trade secrets. The move is seen as a response to the US government's efforts to limit China's access to American technology and intellectual property.

The implications of China's actions on DeepSeek are far-reaching. The company's ability to collaborate with international partners and attract foreign investment may be severely curtailed, potentially stifling its growth and innovation. Moreover, the move sets a worrying precedent for other Chinese tech companies, which may also find themselves subject to similar restrictions in the future.

TechCrunch has reached out to DeepSeek for comment, but the company has yet to respond. As the situation continues to unfold, it remains to be seen how DeepSeek will navigate these new restrictions and what the long-term consequences will be for the company and China's tech industry as a whole.

In the broader context, the developments at DeepSeek highlight the growing importance of technology and intellectual property in the ongoing trade war between China and the US. As both countries seek to gain an upper hand in the tech race, it is likely that we will see more such moves aimed at protecting sensitive technology and preventing its leakage to rival nations.