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Data & AI Market Pulse DeepSeek and the Sovereignty Risks of AI by Gabby Fredkin and Dr. Michael G. Kollo Mar 1, 2025 | 3 mins

DeepSeek AI has stunned markets by developing a model with fewer resources than its U.S. counterparts, raising eyebrows among investors and governments alike.

Its R1 model is reasoning-centric, cost-efficient, and open source, making it an attractive option for enterprises looking to integrate AI into their operations.

However, it also introduces a new and often-overlooked risk: the sovereignty of AI models.

For CIOs and CTOs, this is an issue that is both obvious and urgent.

Sovereignty concerns already shape decisions in cloud computing and data governance, yet AI remains a grey area.

While businesses rigorously assess the security and compliance of their cloud vendors, few are looking under the hood of their AI-powered SaaS and software tools to examine which models are being used, where they come from, and what risks they carry.

The question is no longer just about AI adoption, but whether organisations are choosing models that align with…

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