Bitcoin experienced a 6% drop on 27 January, as stock markets reacted to the debut of China’s open-source AI model, DeepSeek, which some have dubbed ‘AI’s Sputnik moment.’ The new model developed on a modest budget of just under $6 million, raised concerns in US markets as it posed a competitive threat to American AI giants like OpenAI. The surprise launch led to significant losses across tech stocks, including Nvidia, Apple, and Tesla, with Nvidia seeing a record-breaking 17% drop. Energy stocks, which had relied on revenue from power-intensive US AI models like ChatGPT, also suffered.
While the impact on Bitcoin and other cryptocurrencies may seem directly linked to DeepSeek, experts suggest the broader market sentiment played a bigger role. Cryptocurrency, often seen as a “risk-on” asset, typically mirrors the movements in stock markets. As investor fears triggered sell-offs, major coins like Bitcoin and Ether saw their values fall alongside tech stocks. Despite the dip, some analysts remain optimistic, noting that Bitcoin’s quick recovery amidst a broader market decline signals positive prospects.
DeepSeek’s impact on Bitcoin, however, seems minimal in the long run. The open-source nature of the AI model allows others to incorporate its innovations into their own developments, potentially accelerating AI progress worldwide. While concerns about DeepSeek’s political and privacy implications linger, particularly in the US and EU, the model is expected to drive advancements in AI at a lower cost. Yet, its influence on crypto markets is likely to remain limited, with institutional investors continuing to view cryptocurrencies as a risk-heavy asset class.
SoftBank Group is in talks to lead a funding round of up to $40 billion for OpenAI, aiming to value the AI developer at $300 billion, including the new investment. This potential round, which would set a record for a private company, comes amid the growing competition in the AI sector, notably from Chinese startup DeepSeek. Despite this, SoftBank has valued OpenAI at $260 billion, up from $150 billion just a few months ago. The funding is expected to come via convertible notes and is contingent on OpenAI restructuring its business to limit the control of its non-profit arm.
The move would be a bold bet for SoftBank and its CEO Masayoshi Son, who has about $30 billion in cash available for investment. SoftBank’s commitment to OpenAI could be as much as $25 billion, with some funds potentially directed towards OpenAI’s joint venture Stargate, which aims to secure the US position in the global AI race against China. This would add to SoftBank’s previous $15 billion commitment to Stargate.
The funding talks come as OpenAI’s valuation has surged due to its influential AI model, ChatGPT, while competing companies, such as Microsoft and Meta Platforms, continue to ramp up their own AI investments, with Microsoft alone earmarking $80 billion for AI development. Meanwhile, DeepSeek has made waves by claiming that its latest AI model was developed with significantly lower costs than its competitors, further intensifying the race in AI innovation.
The Ministry of Hajj and Umrah have partnered with Mobile Telecommunication Company Saudi Arabia (Zain KSA) to enhance the pilgrim experience through the ‘Direct Hajj’ program, which serves visitors from over 120 countries via the Nusuk Hajj platform. The collaboration aims to improve communication services, provide reliable information, and offer exclusive features for pilgrims, ensuring a seamless and enriched journey.
Zain KSA will sponsor the Nusuk Hajj platform and has achieved 100% 5G network coverage at holy sites, backed by a SAR 1.6 billion investment in digital infrastructure. The partnership aligns with Saudi Arabia’s national goals to enhance the digital capacity of the ‘Guests of God Service Program’ and support the target of hosting 30 million Umrah and Hajj pilgrims by 2030, while providing an unprecedented digital experience that complements their spiritual and cultural journey.
That initiative reflects Zain KSA’s commitment to digital inclusivity and advanced infrastructure, as well as the Kingdom’s broader Vision 2030 objectives to improve the quality of services for pilgrims and strengthen its position as a global leader in Hajj and Umrah services.
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.
Ericsson and Bahrain Telecommunications Company (Batelco) have partnered to expand and modernise Batelco’s mobile broadband network in Bahrain, enhancing 4G and 5G capabilities, coverage, and capacity. Batelco has deployed Ericsson’s latest Radio Access Network (RAN) products, including massive MIMO antennas.
It has upgraded its Core network infrastructure to the latest Network Function Virtualisation Infrastructure (NFVI) release to handle increased voice and data traffic. Energy-efficient solutions like dual-mode triple band radios and Interleaved AIR 3218 have been integrated, reducing space requirements and energy consumption by up to 20% while improving network performance.
Additionally, Batelco has modernised its Ericsson Mediation system to a cloud-native platform, improving operational efficiency and supporting applications such as IoT and 5G standalone use cases. The new platform ensures scalability, flexibility, and faster time-to-market for future-ready network services.
These advancements collectively strengthen Batelco’s network, making it more efficient, sustainable, and capable of meeting the growing demands of consumers and businesses in Bahrain. The collaboration with Ericsson ensures that Batelco’s infrastructure is future-proof, optimised for resource utilisation, and ready to support emerging technologies.
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’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.
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.
Donald Trump’s media company has launched Truth.Fi, a financial services platform aimed at cryptocurrency investments. The initiative, backed by Trump Media & Technology Group, will allocate up to $250 million from its $700 million cash reserves to assets like Bitcoin, crypto-related securities, and ETFs.
This move follows a trademark application last year and reports that Trump Media considered acquiring Bakkt, a licenced crypto service provider. Trump has also voiced support for World Liberty Financial, a decentralised finance protocol. Through his company, which operates Truth Social and various crypto assets, he has become the first US president with direct ties to the industry.
Crypto supporters see this as a potential boost for regulatory acceptance, while critics like Senator Elizabeth Warren have raised concerns over his crypto-linked associates. As Trump deepens his involvement in digital assets, the industry watches closely for signs of shifting policies in Washington.
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.
