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.
Microsoft’s ambitious push into artificial intelligence is facing growing investor doubts as the company prepares to release its latest earnings report. Despite heavy investment in OpenAI and plans to spend $80 billion on AI infrastructure this fiscal year, its Azure cloud business has shown slowing growth for two consecutive quarters. Analysts now question whether AI-driven demand will be enough to reignite momentum.
The tech giant’s stock has underperformed many of its peers, with further pressure mounting after Chinese startup DeepSeek introduced a cost-effective AI model, sparking concerns about US dominance in the sector. Meanwhile, Microsoft’s AI-powered Copilot assistant has struggled to gain widespread traction beyond pilot programmes, forcing the company to adjust pricing strategies in an attempt to drive adoption.
While Microsoft still handles most of OpenAI’s cloud traffic, competition in AI infrastructure is intensifying. With investor sentiment turning cautious, the upcoming earnings report will be a key test of whether AI investments can translate into sustainable revenue growth.
SoftBank is set to invest $500 million in SkildAI, a fast-growing AI robotics startup, at a valuation of $4 billion. The company, founded just two years ago, specialises in building AI models that can be adapted for different robotic applications. Previous investors include Jeff Bezos, Lightspeed Venture Partners, and Coatue Management, who contributed to a $300 million round last July.
The investment comes amid surging interest in AI-powered robotics, with major backers like Bezos ramping up funding in the sector. Startups such as Physical Intelligence and Figure AI have also secured hundreds of millions in recent months to develop advanced robotic “brains” and humanoid robots.
SkildAI’s latest funding highlights the growing competition in AI-driven automation, with investors betting on smarter, more adaptable robots. As demand for robotics expands across industries, firms like SkildAI are positioning themselves at the forefront of this technological revolution.
Hugging Face has introduced Inference Providers, a new feature that allows developers to run AI models on third-party cloud services. Partnering with companies like SambaNova, Fal, Replicate, and Together AI, the platform now offers users the flexibility to deploy models on different infrastructures directly from their project pages.
Previously, Hugging Face primarily focused on its in-house AI hosting solutions, but the company is shifting towards a more collaborative approach. By integrating with external serverless providers, developers can now scale their models without managing hardware, making deployment easier and more cost-efficient. Users will pay standard provider rates, and Hugging Face Pro subscribers will receive additional free credits.
Since its founding in 2016, Hugging Face has grown into a leading AI model hub, backed by major investors like Google, Amazon, and Nvidia. With its latest move, the company continues to expand its ecosystem, making AI more accessible for developers worldwide.
Donald Trump’s decision to ban the development of a United States Central Bank digital currency (CBDC) has shifted global momentum in the race to establish digital currencies. While the Federal Reserve has never shown strong interest in creating a digital dollar, the move sends a powerful signal internationally, leaving Europe and China as frontrunners in shaping global standards for CBDCs. Experts believe the US ban could enhance China’s influence, enabling it to push its digital yuan in developing countries while Europe advances plans for a digital euro.
Trump’s executive order prohibits US agencies from engaging in any CBDC-related activities, citing concerns over privacy, financial stability, and national sovereignty. Critics, including former allies of the CBDC concept, have raised fears about potential government surveillance through digital currencies. Meanwhile, some argue that stablecoins—private digital tokens pegged to the dollar—could serve as a temporary substitute, though this would require significant adjustments to existing financial systems.
The geopolitical implications of the US withdrawal are already emerging. Analysts see the move as a signal of “de-dollarisation,” with countries like Brazil continuing to develop their CBDCs despite the lack of US participation. The decision also puts collaborative international projects, such as those under the Bank for International Settlements, in jeopardy as they lose American involvement. Experts warn that without US engagement, the global CBDC landscape could shift in favour of China and Europe.
Italy’s data protection authority, the Garante, has ordered the Chinese AI startup DeepSeek to block its chatbot in the country, citing insufficient responses to queries about its privacy policy. The watchdog had requested detailed information on data collection practices, sources, purposes, and storage, particularly concerning whether user data is stored in China. DeepSeek’s failure to adequately address these concerns prompted the Garante to impose an immediate ban and launch an investigation.
DeepSeek had removed its AI assistant from Italian app stores earlier this week but claimed it was not subject to local regulation. Agostino Ghiglia, a member of the Garante’s board, stated that the company’s stance worsened its position. Italian users who had already downloaded the app still reported access to the chatbot, while the web version remains operational. The Garante emphasised that European citizens must have clear consent and data protection guarantees, especially regarding servers located in China.
The Garante’s action highlights growing scrutiny of AI platforms in Europe, with data regulators in Ireland and France also questioning DeepSeek’s privacy practices. Italy‘s proactive approach has drawn attention; the country temporarily banned ChatGPT in 2023 over similar concerns. DeepSeek has positioned its AI as a cost-effective alternative to US models, surpassing ChatGPT as the top-rated app on Apple’s US App Store. However, its refusal to cooperate with European regulators may jeopardise its expansion.
Global technology stocks experienced a sharp decline on Tuesday, with a second day of losses triggered by the emergence of a low-cost Chinese AI model. This new AI assistant, launched by China’s DeepSeek, has raised doubts about the dominance of established AI leaders like Nvidia and OpenAI. Nvidia’s shares plummeted 17% on Monday, erasing $593 billion from its market value. Other major tech companies such as Broadcom, Microsoft, and Alphabet also saw significant declines, fueling broader market concerns.
The unexpected launch of DeepSeek’s AI, which claims to use fewer data and lower costs than existing models, has disrupted the market, causing scepticism among investors. While OpenAI CEO Sam Altman praised the model, calling it ‘impressive,’ the sudden rise of a competitor from China has surprised many and highlighted the rapid pace of advancements in AI technology. This development has led to a global sell-off in tech stocks, with significant drops in companies across the US, Europe, and Japan.
The sell-off has raised concerns about the high valuations of AI and tech stocks, which have seen inflated prices due to the AI boom. Nvidia, for example, had been trading at nearly 60 times its earnings, far above the broader market’s 22 times. The market downturn underscores the risks tied to the heavy concentration of tech stocks in investor portfolios, with many fearing that the industry’s rapid expansion has created an unsustainable bubble.
This market shakeup also reflects the broader issue of leverage in the system, with investors increasingly borrowing to buy high-priced tech stocks. As a result, the unwinding of these positions, combined with algorithmic trading, has intensified the sell-off. With key earnings reports from companies like Apple and Microsoft expected this week, investors are closely watching how tech executives address concerns about capital spending and the future of AI investments.
