Artificial intelligence

Samsung faces slowdown in AI chip sales

Samsung Electronics has warned of weak sales for its AI chips in the first quarter, citing US export restrictions on high-bandwidth memory (HBM) chips to China. These restrictions, combined with the company’s struggle to meet Nvidia’s HBM chip requirements, are expected to impact demand. Samsung’s reliance on Chinese customers for about 20% of its HBM sales makes it particularly vulnerable. Despite this, the company plans to release upgraded HBM3E products in March to address shifting market demands.

The company also reported a 29% drop in operating profit for the fourth quarter, totalling 6.5 trillion won ($4.48 billion). Samsung expects limited earnings growth in the first quarter, driven by sluggish demand in the memory chip market, particularly for smartphones and personal computers. In addition, delays in GPU production, mainly due to strong demand and engineering challenges, have affected memory chip requirements for servers in data centres.

Samsung’s mobile phone division also faced challenges, with a 22% drop in operating profit in the fourth quarter. The company’s decision to use Qualcomm’s application processors instead of its own Exynos chips for the Galaxy S25 lineup has weakened its position in the mobile chip market. Despite these hurdles, Samsung anticipates a recovery in the memory market by the second quarter, depending on its ability to supply Nvidia with advanced HBM3E chips.

While competitors SK Hynix and TSMC have benefitted from the AI boom, with record profits, Samsung’s performance in the AI chip market has fallen behind. The company’s future performance will heavily depend on its ability to secure a stronger foothold in the rapidly growing AI sector.

US tech giants defend AI spending amid Chinese competition

DeepSeek, a Chinese tech company, has made waves in the AI sector with a breakthrough that challenges the dominance of US tech giants. The company claims it can develop AI models that rival or surpass Western counterparts at a fraction of the cost, sparking concerns about America’s lead in the industry. In response, the CEOs of Microsoft and Meta have defended their substantial investments in AI infrastructure, emphasising that such spending is necessary to meet growing demand and stay competitive.

Microsoft and Meta have committed billions to AI, with Microsoft earmarking $80 billion for the current fiscal year and Meta pledging up to $65 billion. Both companies argue that expanding their computing networks is critical to addressing the increasing demands of AI applications. Microsoft’s CEO Satya Nadella highlighted the need to overcome capacity constraints, while Meta’s Mark Zuckerberg stressed that heavy investment would give them a strategic advantage over time.

Despite these bold investments, there are signs of investor frustration. Microsoft’s shares recently fell 5% following disappointing growth forecasts for its cloud business, and Wall Street analysts are calling for clearer plans on how these investments will translate into profits. Meta also sent mixed signals, reporting a strong fourth quarter but offering a weak sales outlook, leaving some to question the long-term payoff of their AI ventures.

There are indications that both companies may adjust their approach. Microsoft’s CFO, Amy Hood, noted that while they will continue investing in AI, the pace of spending will slow in the coming years, signalling a shift towards more sustainable growth. As the AI race heats up, it remains to be seen whether these large investments will eventually lead to the anticipated returns.

India minister highlights DeepSeek’s impact on AI industry

India’s IT minister, Ashwini Vaishnaw, has praised the Chinese startup DeepSeek for its breakthrough in affordable AI, which has disrupted the sector with a powerful model costing just $5.5 million. He likened DeepSeek’s efficient approach to his government’s efforts to develop a local AI model through the IndiaAI mission, a $1.25 billion initiative to support AI startups and infrastructure development in India.

DeepSeek’s rapid success, claiming it took just two months to build its model using Nvidia’s H800 chips, has challenged the belief that China lags behind the US in AI. The startup’s app recently surpassed OpenAI’s ChatGPT in downloads on the Apple App Store, further highlighting its impact. Vaishnaw’s comments were seen as a response to remarks made by OpenAI’s CEO Sam Altman, who had previously expressed doubts about India’s ability to compete in the AI space with a $10 million budget.

Vaishnaw pointed out that while some questioned the government’s large AI investment, DeepSeek’s achievements prove that significant results can be achieved with more modest spending. As Altman prepares to revisit India in early February, his comments from last year continue to stir debate online, especially following DeepSeek’s unexpected success in the AI race.

Altman’s visit coincides with ongoing legal issues for OpenAI in India, as the company is engaged in a copyright dispute with local digital news and book publishers. The growing attention on AI developments in India underscores the shifting dynamics in the global AI race.

White House expresses alarm over DeepSeek’s AI techniques

Top White House advisers have raised concerns over China’s DeepSeek using a technique known as “distillation” to potentially replicate US AI models, a method where one AI system learns from another. This could allow DeepSeek to benefit from the extensive investments made by US rivals, such as OpenAI, without incurring the same costs. DeepSeek recently made waves by releasing an AI model that rivals those of US giants, at a fraction of the cost, and giving away the code for free. US tech companies, including OpenAI, are now investigating whether DeepSeek’s model may have improperly used this distillation method.

Distillation, while common in the AI industry, may violate the terms of service of models like OpenAI’s. The technique allows a newer, smaller model to benefit from the learnings of a larger, more advanced one, often without detection, especially when using open-source models. Industry experts have pointed out that blocking such practices is difficult, particularly with freely available models like Meta’s Llama and French startup Mistral’s offerings. Some US tech executives, however, are advocating for stricter export controls and customer identification measures to limit such activities.

Despite the concerns, DeepSeek has not responded to the allegations, and OpenAI has stated it will work with the US government to protect its intellectual property. However, as AI technology continues to evolve, finding a way to prevent distillation may prove to be a complex challenge. The ongoing debate highlights the growing tensions between the US and China over the use of AI and other advanced technologies.

SoftBank explores $25 billion deal with OpenAI

SoftBank is reportedly in talks to invest up to $25 billion in OpenAI, the owner of ChatGPT, as part of its broader push into the AI sector. The investment, which could range from $15 billion to $25 billion, would go towards supporting OpenAI’s commitment to Stargate, a joint venture between SoftBank, Oracle, and OpenAI aimed at securing the US’s lead in the global AI race. This deal would be in addition to the $15 billion SoftBank has already committed to the Stargate initiative, although the talks are still in the early stages.

Stargate, which plans to invest up to $500 billion, has garnered attention as a major player in the competition between the US and China over AI dominance. However, the recent rise of DeepSeek, a Chinese startup that has shaken up the market with its low-cost AI model, has put pressure on SoftBank’s plans. Despite a surge in SoftBank’s share price following the Stargate announcement, the company has seen its stock drop more than 12% due to the market response to DeepSeek’s success.

SoftBank CEO Masayoshi Son’s strategy to secure a significant stake in OpenAI and fulfil Stargate’s goals has reportedly been reviewed and approved by OpenAI’s board. SoftBank had previously acquired a $1.5 billion stake in OpenAI, which was valued at $157 billion in its latest funding round. Despite the ongoing discussions, both SoftBank and OpenAI have declined to comment on the latest investment talks.

Chinese celebrate DeepSeek’s global rise with pride

DeepSeek’s AI assistant has surged ahead of competitors, overtaking ChatGPT in downloads on Apple’s App Store. The Chinese startup’s success has raised concerns among US tech firms while sparking national pride in China. Many see it as a symbol of the country’s resilience against Washington’s tech restrictions.

The company’s ability to offer AI services at a lower cost than OpenAI has prompted discussions about the future of US firms like Nvidia and Microsoft. State media and local commentators have celebrated the achievement, with some arguing it proves US containment efforts have failed. A widely shared article from Zhejiang’s provincial media office argued that China can compete on equal footing in technological innovation.

Public sentiment echoes reactions to Huawei’s surprise 2023 smartphone release, which was seen as defying US sanctions. Social media users have expressed pride in DeepSeek’s rise, with many hoping the country’s AI sector will continue advancing. Some view it as evidence of China’s growing strength in AI.

Strong software demand lifts IBM’s profits

IBM’s fourth-quarter profits exceeded expectations, driven by a surge in software demand as businesses increased IT spending. Shares rose by about 10% in extended trading, reflecting investor confidence in the company’s strategy.

The software unit posted its strongest revenue growth in five years, as companies prioritised cloud infrastructure to support data-intensive generative AI applications.

Revenue growth of at least 5% is expected for 2025, outpacing the previous year’s 3% rise. IBM’s AI-related business, covering bookings and sales, has grown to over $5 billion, gaining $2 billion in just one quarter.

The company made its ‘Granite’ AI models open-source, contrasting with rivals that charge for access, positioning itself as a leader in open AI development.

Software performance contrasted with weaker consulting results, which declined by 2% to $5.2 billion. Around 80% of IBM’s AI business comes from consulting, with the rest from software.

While businesses focus on integrating AI into long-term projects, this shift has yet to translate into higher consulting revenue. Overall, total revenue remained steady at $17.55 billion, aligning with analyst estimates.

Startup Waterlily secures funding to expand care planning tech

San Francisco-based startup Waterlily has raised $7 million in seed funding to expand its AI-driven platform for long-term care planning. Founded by Lily Vittayarukskul, the company helps families and financial advisors predict care costs and create tailored financial strategies. Using machine learning and data from government and insurance sources, Waterlily provides personalised recommendations on funding options, such as life insurance and long-term care policies.

Waterlily’s technology was inspired by Vittayarukskul’s personal experience of caring for her aunt, which exposed the financial and emotional strain of long-term care. The platform’s predictive AI can be used for individuals over 40, offering insights into when and how they may need care. The startup already serves major insurance carriers, including Prudential, and hundreds of independent advisors.

With its latest funding round, Waterlily plans to enhance its AI models, expand its team, and strengthen its partnerships. The company is also exploring international expansion to markets such as the UK and Canada, aiming to bridge the gap in long-term care planning and ensure more families are prepared for the future.

French privacy watchdog to investigate DeepSeek AI over data concerns

France‘s data protection authority, the CNIL, announced it will question DeepSeek to better understand how the Chinese company’s AI system operates and assess potential privacy risks for users. The move comes as European regulators intensify scrutiny of AI, following concerns raised by Italy and Ireland over DeepSeek’s handling of personal data.

DeepSeek recently gained international attention after revealing its latest AI model, DeepSeek-V3, was trained using less than $6 million worth of Nvidia H800 computing power. European authorities have been particularly vigilant about data protection, with the EU’s General Data Protection Regulation (GDPR) setting stringent standards for privacy. Under GDPR, violations can result in fines of up to 4% of a company’s global turnover.

The CNIL’s investigation follows a broader European push to regulate AI technology, with new rules imposing strict transparency obligations on high-risk AI systems. Other countries, such as Italy and Ireland, have also launched inquiries into DeepSeek, reflecting growing concerns over AI’s implications for data privacy across the continent.

DeepSeek: Speeding up the planet or levelling with ChatGPT?

Although the company’s name somewhat overlaps with Google DeepMind, which was launched earlier, the new player in the market has sparked a leap in attention and public interest, becoming one of the biggest AI surprises on the planet upon its launch.

DeepSeek, a company headquartered in China, enjoys significant popularity primarily because its most sought-after features keep pace with giants like OpenAI and Google, as well as due to notable stock market changes that are far from negligible.

In the following points, we will explore these factors and what the future holds for this young company, particularly in the context of the dynamics between China and the US.

How did it start? Origins of DeepSeek

DeepSeek is an AI company from China based in Hangzhou, Zhejiang, founded by entrepreneur and businessman Liang Wenfeng. The company develops open-source LLMs and is owned by a Chinese hedge fund, High-Flyer.

It all started back in 2015 when Liang Wenfeng cofounded High-Flyer. At first, it was a startup, but in 2019, it grew into a hedge fund focused on developing and using AI trading algorithms. For the first two years, they used AI only for trading.

In 2023, High-Flyer founded a startup called DeepSeek, and Liang Wenfeng was appointed CEO. Two years later, on 10 January 2025, DeepSeek announced the release of its first free-to-use chatbot app. The app surpassed its main competitor, ChatGPT, as the most downloaded free app in the US in just 17 days, causing an unprecedented stir on the market.

Unprecedented impact on the market

Few missed the launch of the DeepSeek model, which is why the stock market felt the impact, and so did some of the biggest giants.

For instance, the value of Nvidia shares dropped by as much as 18%. Similar declines were experienced by giants like OpenAI, Google, and other AI companies focused on small and medium-sized enterprises.

On top of this, there is justified concern among investors, who could quickly shift their focus and redirect their investments. However, this could lead to an even more significant drop in the shares of the largest companies.

Open-source approach

DeepSeek embraces an open-source philosophy, making its AI algorithms, models, and training details freely accessible to the public. The company stated that it is committed to transparency and fosters collaboration among developers and researchers worldwide. They also advocate for a more inclusive and innovative AI ecosystem.

Their strategy has the potential to reshape the AI landscape, as it empowers individuals and organisations to contribute to the evolution of AI technology. DeepSeek’s initiative highlights the importance of open collaboration in driving progress and solving complex challenges in the tech industry.

DeepSeek quickly secured the information after being alerted.

With the growing demand for ethical and transparent AI development, DeepSeek’s open-source model sets a precedent for the industry. The company paves the way for a future where AI breakthroughs are driven by collective effort rather than proprietary control.

Cheaper AI model that shook the market

By being cheaper than the competition, DeepSeek has opened the doors of the AI market to many other companies that do not have as much financial power. As dr Jovan Kurbalija, executive director of Diplo, says in his blog post titled ‘How David outwits Goliath in the age of AI?‘, ‘the age of David challenging Goliath has arrived in AI’.

For individuals, this means monthly costs are reduced by 30% to 50%, which can be, and often is, the biggest incentive for users looking to save.

The privileges once enjoyed by those with greater financial resources are now available to those who want to advance their small and medium-sized businesses.

Cyber threats and challenges faced by DeepSeek

Shortly after its launch, DeepSeek faced a significant setback when it was revealed that an error had exposed sensitive information to the public.

This raised alarms for many, especially as the immense popularity led to the AI Assistant being removed from the AppStore more times than OpenAI’s offering, and a large amount of data became accessible.

Experts have expressed concerns that others may have accessed the leaked data. The company has not yet commented on the incident, while the system’s vulnerability provides a foundation for hacking groups to exploit.

DeepSeek for the top spot, ChatGPT defends the throne

The AI race is heating up as DeepSeek challenges industry leader ChatGPT, aiming to claim the top spot in AI. With its open-source approach, DeepSeek is rapidly gaining attention by publicly making its models and training methods available, fostering innovation and collaboration across the AI community.

The race was further spiced up by DeepSeek’s claim that it built an AI model on par with OpenAI’s ChatGPT for under $6 million (£4.8 million). In comparison, Microsoft, OpenAI’s main partner, plans to invest around $80 billion in AI infrastructure this year.

OpenAI’s ChatGPT search tool faces risks of manipulation via hidden content, leading to biased or harmful outputs.

As DeepSeek pushes forward with its transparent and accessible model, the battle for AI supremacy intensifies. Whether openness will outmatch ChatGPT’s established presence remains to be seen, but one thing is sure—the AI landscape is evolving faster than ever.

Why is DeepSeek gaining popularity in 2025?

DeepSeek has emerged as a major player in AI by embracing an open-source philosophy, making its models and training data freely available to developers. This transparency has fueled rapid innovation, allowing researchers and businesses to build upon its technology and contribute to advancements in AI.

Unlike closed systems controlled by major tech giants, DeepSeek’s approach promotes accessibility and collaboration, attracting a growing community of AI enthusiasts. Its cost-effective development, reportedly achieving results comparable to top-tier models with significantly lower investment, has also drawn attention.

As the demand for more open and adaptable AI solutions rises, DeepSeek’s commitment to shared knowledge positions it as a strong contender in the industry. Whether this strategy will redefine the AI landscape remains to be seen, but its growing influence in 2025 is undeniable.

DeepSeek in the future: Development, features, and strategies

Now that it has experienced ‘overnight success,’ the Chinese company aims to push DeepSeek to the top and position it among the most powerful AI firms in the world.

Users can definitely expect many advanced features that will fuel a fierce battle with giants like DeepMind and ChatGPT.

Strategically, DeepSeek will attempt to break into the American market and offer more financially accessible solutions, forcing the key players to make significant cuts.

DeepSeek is undoubtedly a real hit in the market, but it remains to be seen whether price is the only measure of its success.

Whether it will make a leap in its own technology and completely outpace the competition or remain shoulder to shoulder with the giants—or even falter—will be revealed in the near future.

One thing is sure: the Chinese company has seriously shaken up the market, which will need considerable time to recover.

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