The US Department of Homeland Security published a notice in the Federal Register on 20 October 2026 setting out Exclusion and Removal Order #2026-01. The order, originally issued on 24 July, was made under the Federal Acquisition Supply Chain Security Act of 2018 after a recommendation from the Federal Acquisition Security Council.
What the order requires
Federal civilian agencies must:
- exclude Hangzhou DeepSeek Artificial Intelligence Basic Technology Research Co., its affiliates and their products from procurement, including approved product lists and e-commerce marketplaces; and
- remove DeepSeek products, and third-party products and services developed using DeepSeek implementations, from their IT systems, unless they obtain an exception.
The order does not cover national security systems or secure compartmented systems. Agencies had 60 days from issue to ask the Cybersecurity and Infrastructure Security Agency for an exception. It cites the location of DeepSeek's servers in China and, for DeepSeek-hosted models, the collection of personal data when accounts are created. DHS will review the order within a year and annually after that.
The knock-on effect for contractors
Under the federal contract clause FAR 52.204-30, contractors may not provide or use covered products in performing a contract that an applicable order prohibits, unless a waiver has been issued. Because the order reaches products built using DeepSeek implementations, software vendors that use DeepSeek's open-weight models inside their tools will need to check their supply chains, not just their own direct use.
Why it matters financially
The order shuts DeepSeek, and any product built on its models, out of the US federal civilian market and flows down to government contractors. Vendors selling AI tools to agencies may face re-engineering costs to swap out DeepSeek components, and the risk of losing contracts if they cannot show compliance. No value of affected contracts has been published.