Call for 'data diplomacy' with China after DeepSeek ban

The move has generally been welcomed but experts say this won't prevent risks to Australians' privacy, and RMIT University technology associate dean Dana McKay recommends the Commonwealth take a broader approach.

Experts say a federal ban on DeepSeek won't protect Australians' data. (Mick Tsikas/AAP PHOTOS)

This is because DeepSeek gathers a lot of data about users which acts as a digital fingerprint that can identify individuals with "a high degree of precision", and all Chinese-based companies are subject to laws which allow its government to access information.

"We saw how quickly DeepSeek emerged, a new company could emerge tomorrow and we would then go through the whole thing again," Dr McKay told AAP.

"We're going to need a more systematic approach to engaging in data diplomacy with China or a more broad-brush stance about Chinese-owned companies.

"Maybe we should be having a conversation, rather than clamping down and banning things."

Australia's action follows similar moves made by the Taiwanese government, which banned its departments from using DeepSeek's services because of the risk it poses to information security, and the Commonwealth's 2023 decision to ban social media platform TikTok from government-issued devices.

"AI is a technology full of potential and opportunity but the government will not hesitate to act when our agencies identify a national security risk," Home Affairs Minister Tony Burke said.

It is unlikely Beijing will respond to the government ban as Australia does not have a DeepSeek equivalent that could be blocked, according to Australian National University search engines and China expert Graeme Smith.

DeepSeek's AI chatbot rocked the tech world because it could provide similar responses to pre-existing competitors while being trained at a fraction of the cost and with significantly less computing power.

Its January launch prompted investors to question the valuation of other AI companies and led to a global tech stock rout that wiped almost $US600 billion ($A968 billion) from the market value of AI chip maker Nvidia in a single day.

Tony Burke says the government will not fail to act on matters of national security. (Dominic Giannini/AAP PHOTOS)

Mr Burke said Australia's measures were "country-agnostic" but the Commonwealth has not placed a blanket government ban on similar services offered by American company OpenAI, despite concerns its ChatGPT assistant could incorporate and expose sensitive information from prompts into its dataset.

The main difference between the two situations is that the US does not require user data be handed to its government, Dr McKay said.

But privacy and data concerns hang over most tech companies, including those based in America, which has prompted many users to give up on trying to protect their information.

"Facebook, Instagram and all the others are not protecting us ... they're monetising our attention, our data in a completely open and cynical way," Dr Smith told AAP.

"Private citizens will choose the (AI) that does it quicker, that does it better and will take the attitude that 'they've all got our data anyway, what does it matter?'"

Australian users have been encouraged to review any company's privacy policies to understand how their data is used, though the Tech Council of Australia maintains AI chatbots are an important tool for businesses and recommends they use this opportunity to consider internal policies and cybersecurity structures.

"It's a positive development for the sector," the council's head of policy Harry Godber told AAP.

"Competition sharpens minds and for Australians viewing these developments, it's clarion call for more investment and support for AI."

China has a significant advantage in tech innovation because it has a vast population from which to draw data.

South Australian politicians on Wednesday also banned DeepSeek from state government networks and devices.