Shares of Nvidia rose in Europe on Wednesday, signalling a potential recovery after a sharp decline earlier in the week. The company, a key player in the AI sector, saw its Frankfurt-listed shares increase by 2%, following an 8.9% gain on Wall Street the previous day. This bounce came after a steep drop in Nvidia’s market value on Monday, triggered by the emergence of China’s DeepSeek AI tool, which posed a challenge to established players like OpenAI’s ChatGPT.
The decline in Nvidia’s stock earlier in the week saw the company lose nearly $600 billion in market value, marking the largest single-day loss in history for any company. However, markets showed signs of stabilising on Wednesday, bolstered by a surge in shares of ASML, the Dutch company that manufactures tools for chip production. ASML’s 11% jump helped lift European tech stocks, with chipmakers BE Semiconductor and ASM International also posting solid gains.
Investors seemed to regain confidence, with some believing that DeepSeek’s advancements might not disrupt the broader AI market. According to market strategist Chris Weston, the innovation from DeepSeek could even generate new demand for Nvidia’s GPUs, which are critical for AI applications. Meanwhile, Microsoft and OpenAI are investigating whether DeepSeek improperly used data from ChatGPT’s technology.
As markets remain volatile, investors are now looking ahead to earnings reports from major tech giants like Nvidia, Apple, and Microsoft, which could provide more clarity on the sector’s outlook. Despite ongoing uncertainties, the overall sentiment in the tech sector appeared more positive by midweek.
ASML, the leading maker of computer chip equipment, reported impressive fourth-quarter bookings of 7.09 billion euros ($7.39 billion), significantly surpassing analyst expectations. The surge in orders was driven by the increasing demand for advanced chip production tools fueled by the boom in AI. Following the announcement, ASML’s stock rose 11% to 722 euros, signalling investor optimism despite recent market volatility.
Analysts had expected bookings to total around 3.99 billion euros, up from 2.63 billion euros in the previous quarter. ASML’s CEO, Christophe Fouquet, emphasised that AI growth is a key driver for the industry, with major companies like TSMC, ASML’s largest customer, benefiting from the rise in AI chip demand. The company reported a net income of 2.7 billion euros on sales of 9.3 billion euros for the quarter, surpassing expectations.
Despite the positive results, analysts caution that the long-term impact of DeepSeek’s AI model—released this week and requiring less computing power than competitors—remains uncertain. Some fear it could affect the large investments tech giants make in AI chips. However, ASML’s strong quarterly performance and its 2025 sales forecast, ranging from 30-35 billion euros, suggest continued growth, particularly from companies like TSMC and SK Hynix.
ASML’s largest market was the US in the fourth quarter, accounting for 28% of sales, closely followed by China. However, the company anticipates that sales in China will decline, partly due to export restrictions on chip equipment imposed by the US and Dutch governments for national security reasons.
Italy’s data protection authority, the Garante, has launched an investigation into Chinese AI model DeepSeek over its use of personal data. The regulator is seeking details on the types of data collected, its sources, purposes, legal basis, and whether the information is stored in China. DeepSeek and its affiliates have been given 20 days to respond, marking one of the first regulatory challenges faced by the startup.
The inquiry comes as DeepSeek gains global attention, recently overtaking OpenAI’s ChatGPT as the top app on Apple’s United States App Store. The Chinese firm positions itself as a low-cost competitor to United States AI models, a claim that has drawn scrutiny from governments and markets alike. In the United States, White House officials have expressed concerns over the app’s potential national security implications.
Italy‘s Garante is known for its assertive stance on AI regulation, having briefly banned ChatGPT in 2023 over alleged EU privacy violations. The investigation into DeepSeek underscores the growing global focus on the privacy and security risks posed by emerging AI technologies.
Alibaba launched a new version of its Qwen 2.5 AI model on Wednesday, claiming it outperforms competitors like DeepSeek-V3, GPT-4, and Llama-3.1-405B. The release, timed on the first day of the Lunar New Year when most Chinese workers are on holiday, highlights the growing pressure from DeepSeek’s rapid rise in the AI sector. The Chinese tech giant’s announcement emphasised that Qwen 2.5-Max delivers better performance across various AI benchmarks compared to some of the top models from OpenAI and Meta.
DeepSeek’s recent success, particularly after its January releases of the DeepSeek-V3 and R1 models, has shaken the AI market, including both international competitors and Chinese firms. The company’s low development and usage costs have raised concerns about the sustainability of large AI investments from US tech giants. The competition within China has intensified, with Alibaba’s Qwen 2.5-Max release and ByteDance’s update to its AI model shortly after DeepSeek’s R1 release, signalling a rapid response to the new market dynamics.
DeepSeek’s previous model, V2, had already disrupted the market last year, triggering a price war with Chinese firms slashing prices on AI models. Alibaba and other major tech companies, including Baidu and Tencent, had to follow suit, offering significantly cheaper options. Despite this, DeepSeek’s founder, Liang Wenfeng, has expressed that his company is focused on achieving Artificial General Intelligence (AGI) rather than competing on price, contrasting DeepSeek’s agile, research-driven approach with the more structured and costly operations of larger tech firms.
As the battle for AI supremacy intensifies, the emergence of DeepSeek, with its lean team of researchers, continues to challenge China’s tech giants, who may find themselves under pressure to innovate faster and more efficiently to keep up with the rapidly evolving AI landscape.
Apple’s iPhone devices are now eligible to test SpaceX’s Starlink’s direct-to-cell service, which offers satellite-based coverage, according to T-Mobile. The trial, which started after receiving approval from the Federal Communications Commission (FCC) in November, currently provides “text via satellite” capabilities, with plans to add voice and data features in the future.
Initially, only select Android smartphones were eligible for the test, but T-Mobile has expanded compatibility to include iPhones running the latest iOS 18.3 software update. The partnership between Apple, SpaceX, and T-Mobile has been kept under wraps, with the companies working together to integrate Starlink support into Apple’s devices.
The FCC’s approval last year also allowed Starlink’s direct-to-cell service to assist in providing coverage in areas like North Carolina, which were severely impacted by Hurricane Helene. While Apple and SpaceX did not comment outside business hours, the initiative marks a significant step in expanding satellite coverage for mobile users.
Indian fintech platform Cred, backed by Tiger Global and Peak XV, has become the first payment firm to offer access to India’s central bank digital currency (CBDC), the company announced on Tuesday. The Reserve Bank of India (RBI) began piloting the e-rupee, a digital equivalent to cash, in December 2022, initially limiting access to banks. In April 2024, the RBI expanded eligibility to payment firms, paving the way for wider adoption.
Cred’s e-rupee wallet will initially be available to select users, with YES Bank facilitating the issuance of digital currency tokens. Cred’s founder, Kunal Shah, said the initiative aims to streamline e-rupee transactions and promote adoption among India’s most creditworthy individuals. The company joins a competitive landscape, as major firms like Google Pay, PhonePe, Amazon Pay, and MobiKwik have also sought participation in the pilot.
While the e-rupee saw an initial surge in usage, adoption rates have since slowed, reflecting the challenges central banks face in popularising digital currencies globally. Cred’s involvement marks a significant milestone in advancing the accessibility and usability of India’s digital currency.
OpenAI has raised concerns about Chinese companies attempting to access US AI technologies to enhance their models. In a statement released on Tuesday, OpenAI highlighted the critical need to protect its intellectual property and the most advanced capabilities in its AI systems. The company emphasised that it has put in place countermeasures to safeguard its innovations and is working closely with the US government to protect the technology from being exploited by competitors and adversaries.
These comments come in response to the White House’s ongoing review of national security risks posed by Chinese AI companies, particularly the rapidly growing startup DeepSeek. The US government has been looking into potential threats as China increasingly seeks to advance its AI capabilities. David Sacks, the White House’s AI and crypto czar, explained that Chinese firms are using an AI technique called “distillation,” which allows them to extract knowledge from leading US AI models, further raising concerns about intellectual property theft.
OpenAI’s statement underscores the challenges and security risks that arise as AI becomes a critical technology with broad applications, from national defence to economic competitiveness. The company’s efforts to protect its proprietary AI models are part of a broader push by the US to ensure that its technological edge is not compromised by foreign competitors who might attempt to bypass intellectual property protections. The situation highlights the increasing geopolitical tension surrounding AI development, especially as China continues to make significant strides in the field.
Liang Wenfeng, the 39-year-old founder of DeepSeek, has rapidly become a central figure in China’s AI ambitions. Previously maintaining a low profile, he gained national attention after being invited to a closed-door symposium with Premier Li Qiang. His company has made waves by developing an open-source AI model that rivals the capabilities of industry leaders while operating at a fraction of the cost.
Unlike many Chinese tech firms that focus on commercial applications, DeepSeek has prioritised fundamental AI research. Liang argues that China must shift from imitation to original innovation to bridge the gap with the United States. His decision to open-source DeepSeek’s models aligns with his belief that collaboration and transparency will accelerate AI development, much like Silicon Valley’s early approach.
Liang’s background in finance and engineering has shaped his strategic vision. After co-founding a successful quantitative hedge fund, he pivoted to AI, founding DeepSeek in 2023. His leadership has attracted top talent from China’s elite universities, drawn by the challenge of developing artificial general intelligence. As DeepSeek gains global recognition, it signals China’s intent to play a leading role in the future of AI.
Chinese startup DeepSeek has claimed to build an advanced AI model at a fraction of the cost and time required by US tech giants, raising questions about the industry’s spending. The company stated it developed its V3 AI model in just two months for under $6 million, using Nvidia’s less-advanced H800 chips. An app powered by this model became the most downloaded app on the US iPhone store on Monday.
Founded in 2023, DeepSeek claims its AI models rival or outperform top competitors despite significantly lower costs, challenging the notion that scaling AI demands massive resources. This comes as US tech firms, part of the “Magnificent Seven,” have collectively added $10 trillion in market value since the AI boom sparked by ChatGPT in late 2022.
Industry analysts, however, remain sceptical of DeepSeek’s claims. Bernstein‘s Stacy Rasgon questioned whether the startup’s advancements could outpace those from established global AI labs, suggesting the company’s narrative might be overstated. The developments have drawn attention as investors scrutinise AI spending ahead of earnings reports from key industry players.
Metaplanet, a Tokyo-listed company, has unveiled a bold corporate treasury plan aiming to accumulate 10,000 Bitcoins by the end of 2025 and 21,000 by 2026. The initiative is designed to position the company as one of the world’s largest corporate holders of Bitcoin, with over $180 million worth of assets already in place.
The strategy dubbed the ’21 Million Plan’, involves issuing 21 million shares through moving strike warrants to raise nearly $740 million. This capital raise is set to be one of Asia’s largest bitcoin-focused equity raises. The plan aims to protect shareholder value by setting an exercise price at 100% of the previous day’s closing price, thus avoiding dilution.
Metaplanet has achieved impressive BTC yields, including a 309.82% return for Q4 2024, reinforcing the success of its strategy. The company’s Director of Bitcoin Strategy, Dylan LeClair, emphasised that the firm measures success by bitcoin yield, not fiat currencies. The company’s ultimate goal is to maximise Bitcoin per share for its shareholders, positioning Bitcoin not only as an asset but as an exit strategy.
