The launch of DeepSeek’s cost-efficient AI model has sent shockwaves through Australian tech markets, with shares in AI-related companies experiencing steep declines. Investors are increasingly worried that the Chinese startup’s affordable technology could undermine the dominance of established players in the sector.
Among the biggest losers were AI software firm Appen, which saw its stock drop by 3.3%, and chipmaker Brainchip, which lost 10.3%. The technology sub-index fell by 1%, with major data centre operators also taking a hit. Analysts expressed concerns that DeepSeek’s success might reduce demand for AI infrastructure, which had driven heavy investments in Australian data centres.
DeepSeek’s AI assistant, launched last week, has already outpaced US competitor ChatGPT in downloads on Apple’s App Store. This rapid rise has sent ripples through the global tech sector, contributing to Nvidia’s record $592.7 billion market loss.
As Australian investors reassess their exposure to AI stocks, market strategists predict a shift towards safer sectors such as healthcare and consumer staples, after DeepSeek’s disruptive impact.
Retail investors made a record purchase of Nvidia shares on Monday, buying a net $562.2 million worth of stock, following a sharp 17% drop in its market value. The decline came after concerns arose over a low-cost AI model from Chinese startup DeepSeek, which contributed to Nvidia losing $593 billion in market value. According to Vanda Research, this marked the largest retail investment in Nvidia since data tracking began in 2014.
Nvidia has seen steady retail investment over the past few years, with approximately $7.3 billion in shares purchased last quarter. However, this was nearly half the amount recorded in the peak quarter of September 2024.
While global tech stocks showed some recovery on Tuesday, the sector remains under pressure as investors grapple with concerns over the high valuations and dominance of AI leaders like Nvidia, amid rising competition from new players like DeepSeek.
SAP anticipates growing demand for its AI services as energy-efficient models become more accessible. The company’s CEO, Christian Klein, stated that advancements like China’s DeepSeek model signal a shift toward scalable AI infrastructure, which is crucial for running general AI systems effectively.
Klein emphasised the increasing competition in the AI landscape, suggesting that the market will feature multiple large language models rather than dominance by a single player. He noted these developments as positive for SAP’s position in the industry.
Despite recent volatility in technology stocks triggered by concerns over the profitability of AI investments, SAP remains optimistic. The potential of cheaper and more efficient AI systems could reinvigorate confidence in the sector, benefiting companies with robust AI offerings.
Google has appealed to the EU’s top court to overturn a record 4.3-billion-euro antitrust fine imposed seven years ago, arguing that the penalty punished the company for its innovation. The fine was originally levied by the European Commission, which accused Google of using its Android operating system to suppress competition by forcing manufacturers to pre-install Google Search, Chrome, and the Google Play store on devices. While the fine was later reduced to 4.1 billion euros by a lower court, Google maintains that its actions fostered competition, not hindered it.
During Tuesday’s hearing, Google lawyer Alfonso Lamadrid stated that the Commission failed to meet its legal obligations and relied on errors in law. Lamadrid defended Google’s agreements with phone manufacturers, insisting they were not anti-competitive, but rather beneficial to the market. The case centres on whether the European Commission acted appropriately in its investigation and decision to reshape markets through such penalties.
The judges of the Luxembourg-based Court of Justice of the European Union will make a final ruling in the coming months, with no further opportunity for appeal. In addition to this case, Google remains under scrutiny by EU regulators for its advertising business, with another major decision expected later this year.
US President Donald Trump revealed on Monday that Microsoft is in discussions to acquire TikTok, expressing a desire for a bidding war over the popular app. While Microsoft declined to comment, TikTok and its Chinese parent company, ByteDance, did not immediately respond to media inquiries. TikTok, which has around 170 million US users, faced a brief shutdown just before a law that could force ByteDance to sell the app or face a ban took effect in January.
Trump mentioned last week that he was in talks with various parties regarding TikTok’s future, promising a decision within 30 days. The president also indicated that he would be open to Elon Musk acquiring TikTok, although the Tesla CEO has yet to comment. In addition to Microsoft, AI startup Perplexity AI proposed merging with TikTok, suggesting a potential deal where the US government could hold up to half of the new company.
This marks the second time Microsoft has been involved in potential talks to acquire TikTok. Back in 2020, Microsoft emerged as a frontrunner in buying the app, but those discussions eventually collapsed. Microsoft CEO Satya Nadella later described the situation as “the strangest thing” he had ever worked on, noting how the deal abruptly disappeared after the Trump administration pushed for a divestment.
Several prominent Indian media outlets, including those owned by billionaires Gautam Adani and Mukesh Ambani, are taking legal action against OpenAI. These outlets, such as NDTV and Network18, along with organisations like the Indian Express and Hindustan Times, have filed to join an ongoing lawsuit against OpenAI in a New Delhi court. They allege that OpenAI has been improperly scraping their copyrighted content to train its AI model, ChatGPT, without permission or payment.
The legal claim, which is being led by the Digital News Publishers Association (DNPA), argues that OpenAI’s practices pose a significant threat to the copyrights of its members. The publishers claim that OpenAI’s actions amount to ‘wilful scraping’ and the use of their work for commercial gain, especially as the company generates revenue through ads linked to AI-generated content. This lawsuit highlights broader concerns in the media industry about the influence of large tech companies on content distribution and monetisation.
The legal proceedings are part of a larger global trend, with authors, musicians, and news organisations worldwide suing AI firms for using their works without compensation. In the US, the New York Times has filed a similar lawsuit against OpenAI and its major backer, Microsoft. This new case in India adds significant pressure to OpenAI, which has denied the allegations, arguing that its AI systems rely on publicly available data and that deleting such data could violate US law.
The Indian plaintiffs argue that OpenAI’s failure to strike content-sharing deals with local publishers, while it has done so with international media outlets, undermines the business of Indian news companies. The publishers warn that OpenAI’s practices could weaken the media landscape and negatively impact democracy, calling for greater protection of intellectual property in the age of AI.
Bosnia and Herzegovina-based Zira has introduced a new AI-powered platform designed to help telecom operators maximise their business support system (BSS) data. The platform uses predictive and generative AI to enhance operations, optimise pricing strategies, and adapt to shifting market trends. Wholesale operators can leverage the tool to improve route efficiency, manage traffic volumes, and boost customer experiences while safeguarding service continuity.
Research highlights the growing interest in AI within the telecoms sector. A recent survey by Arthur D. Little found that 71% of telecom executives cited enhanced customer experience as a key benefit of AI integration. Intelligent network optimisation and predictive maintenance were also identified as critical advantages, reducing downtime and operational costs by up to 30%.
Zira’s Chief Product Officer Amir Turalić emphasised the platform’s potential, stating its forecasting capabilities address capacity and pricing challenges while informing better decision-making. Turalić noted Zira is collaborating with clients on live projects to support diverse use cases and refine the platform.
The telecom industry’s adoption of AI remains largely theoretical, with limited deployment stories to date. Zira’s innovation seeks to bridge this gap, providing a tailored solution for the BSS layer and accelerating the adoption of AI-driven tools across networks.
Rivian, the US electric vehicle maker, and Volkswagen are in talks with other automakers about supplying them with software and electrical architecture through their joint venture. This collaboration, which began in November with Volkswagen’s $5.8 billion investment, aims to integrate advanced electrical infrastructure and Rivian’s software technology into both companies’ future EVs. Rivian’s streamlined vehicle architecture, which reduces weight and manufacturing complexity, also allows for over-the-air software updates, an area where traditional automakers have struggled to catch up.
Rivian‘s Chief Software Officer, Wassym Bensaid, revealed that other automakers are interested in the joint venture’s technology, though he declined to name them or provide details on the ongoing discussions. The venture is a key opportunity for established automakers to quickly access the technology they have long sought to develop themselves. For Rivian, the partnership provides higher volumes, better supplier deals, and a chance to reduce costs, especially important as EV demand slows.
Rivian focuses on launching its smaller, more affordable R2 SUV by 2027, while also expanding the integration of its technology into Volkswagen’s other brands. With increasing interest from additional OEMs, the joint venture is poised to become a significant player in the global EV market, particularly in the West, alongside Tesla. Analysts suggest the partnership helps Rivian address its capital concerns and positions it as a key player in the transition to software-defined vehicles.
LG Energy Solution, a major South Korean battery maker, has announced plans to reduce its capital expenditure by up to 30% this year, citing slowing demand for electric vehicles (EVs). The decision was made after the company reported a quarterly loss for the first time in three years. For the October-December period, LGES posted an operating loss of 226 billion won ($158 million), compared to a profit of 338 billion won during the same period in 2023.
The company, which supplies batteries to automakers like Tesla, General Motors, and Volkswagen, attributed its poor performance to a drop in demand from General Motors, one of its key clients. LGES expects demand to recover in the second quarter as GM launches new EV models. Additionally, the company highlighted that changes to US tariffs and potential reductions in EV tax credits could impact short-term growth in the US market, though it believes the long-term outlook for the battery industry remains strong.
In response to these challenges, LGES intends to prioritise using existing production capacity rather than expanding with new plants in North America. Despite the reduced spending, the company remains focused on growth, targeting a revenue increase of 5-10% this year. LGES will also launch joint battery production with Stellantis and Honda later this year. CEO Kim Dong-myung has expressed optimism about a recovery in the EV market after 2026, though he also acknowledged growing competition from Chinese rivals.
Shares of LGES remained flat following the announcement, while the broader KOSPI index saw a slight rise.
The UK‘s Competition and Markets Authority has appointed former Amazon executive Doug Gurr as its interim chairman, signalling the government’s push to boost economic growth and support the tech sector. Gurr, who brings extensive experience at Amazon, including leading the company’s UK and China operations, will guide the CMA as it fosters competition in industries such as cloud services and AI. The move aligns with the UK’s broader strategy to streamline regulations and position itself as a pro-business nation.
Gurr’s appointment comes amid a critical phase in the CMA’s investigation into the domestic cloud services market, which has been scrutinising Amazon’s dominant position. While Gurr will serve in an interim role, the government hopes his commercial background will help drive pro-business decisions that stimulate growth. This marks a shift from the previous chair, Marcus Bokkerink, whose tenure was shorter than expected, possibly due to dissatisfaction among government officials.
Industry experts note that Gurr’s appointment is timely, as the CMA is stepping up its oversight of Big Tech, particularly with the expanded powers under the Digital Markets, Competition, and Consumers Act. Critics and lobby groups like the Open Cloud Coalition closely watch how the CMA will handle its regulatory responsibilities, particularly in the cloud services sector, where Amazon holds a significant market share. They urge the CMA to maintain a strong stance on promoting fairness and competition.
As the CMA navigates its investigations and enforces new rules, stakeholders are keen to see how Gurr’s leadership will shape the future of competition regulation in the UK. The outcome could have far-reaching implications for businesses and consumers, particularly in the rapidly evolving tech landscape.
