Chinese companies are increasingly backing DeepSeek‘s AI, marking a pivotal moment for the industry. Firms like Moore Threads and Hygon Information Technology are enabling their computing clusters to support DeepSeek’s R1 and V3 models, which use domestically produced graphic processing units (GPUs). Analysts have hailed this as a ‘watershed moment,’ particularly as these models rival those run on global high-end chips.
Huawei has also joined the trend, integrating DeepSeek’s models with its Ascend cloud service and partnering with AI infrastructure start-up SiliconFlow. This integration showcases the growing potential of Chinese-made chips to support competitive large language models, reducing reliance on US hardware. Additionally, major Chinese tech companies such as Alibaba, Baidu, and Tencent have made DeepSeek’s models available through their cloud services.
DeepSeek’s rise has captured significant attention, especially after the launch of its free AI assistant, which surpassed ChatGPT in app downloads within days. The company’s approach, requiring far less computing power than its US counterparts, has further fueled its success. While DeepSeek is gaining traction globally, some countries, including Italy and the Netherlands, have raised privacy concerns, leading to investigations and blocks on its app.
The emergence of China’s DeepSeek, a low-cost AI model that requires less advanced chips, initially sparked a global selloff in tech stocks. Investors raised concerns about the future of Western investments in chipmakers and data centres. Nvidia, a leader in the sector, saw its market value plummet by nearly $600 billion, marking the largest one-day loss in company history. However, since then, tech stocks, particularly in Europe, have rebounded, with some investors turning to a 160-year-old economic theory to explain the market’s recovery: the Jevons Paradox.
The Jevons Paradox, proposed by economist William Stanley Jevons, suggests that as a resource becomes more efficient, its demand can actually increase. In the context of AI, the paradox argues that as AI technology becomes cheaper and more accessible, its use will likely expand. This idea is gaining traction among European investors, with some believing that lower AI costs could drive a new wave of investment in software and AI technologies, particularly in areas like data and inference.
Despite some scepticism, several fund managers have embraced the paradox as a reason for optimism in AI markets. The potential need for data centres and infrastructure to support AI growth remains a key focus, though the rise of more efficient software like DeepSeek has led some to question whether the sector will require as many resources as previously expected. While the long-term outlook remains uncertain, many see the reduction in AI costs as a catalyst for further investment and growth, especially in European companies that rely on AI technologies.
Not everyone is convinced, however, with some analysts pointing to Nvidia’s rapid stock rise as a sign that market dynamics may be more complex than the Jevons Paradox suggests. Nonetheless, for many, the falling costs of AI technology have reinforced the belief that demand for AI-related investments will continue to thrive.
Salesforce is cutting more than 1,000 jobs while simultaneously hiring employees to support its growing AI business, according to a Bloomberg report. Affected workers will have the opportunity to apply for other positions within the company, but it remains unclear which divisions will see the largest reductions. Salesforce has not yet commented on the job cuts.
The customer relationship management software giant had over 72,000 employees as of early 2024. CEO Marc Benioff previously announced that Salesforce had secured more than 1,000 paid deals for its AI-driven platform, Agentforce. The latest layoffs follow previous reductions, including 700 jobs cut in early 2024 and another 300 later in the year.
The job cuts highlight the company’s shift towards artificial intelligence, as it seeks to capitalise on growing demand for AI-powered tools. Despite the reductions, Salesforce continues to invest in AI products and expand its workforce in areas aligned with its future growth strategy.
Belgium‘s new government, led by Prime Minister Bart De Wever, has announced plans to utilise AI tools in law enforcement, including facial recognition technology for detecting criminals. The initiative will be overseen by Vanessa Matz, the country’s first federal minister for digitalisation, AI, and privacy. The AI policy is set to comply with the EU’s AI Act, which bans high-risk systems like facial recognition but allows exceptions for law enforcement under strict regulations.
Alongside AI applications, the Belgian government also aims to combat disinformation by promoting transparency in online platforms and increasing collaboration with tech companies and media. The government’s approach to digitalisation also includes a long-term strategy to improve telecom infrastructure, focusing on providing ultra-fast internet access to all companies by 2030 and preparing for potential 6G rollouts.
The government has outlined a significant digital strategy that seeks to balance technological advancements with strong privacy and legal protections. As part of this, they are working on expanding camera legislation for smarter surveillance applications. These moves are part of broader efforts to strengthen the country’s digital capabilities in the coming years.
Alphabet is set to face investor scrutiny over its heavy spending on AI as it prepares to report earnings. Slower revenue growth in advertising and cloud services has raised concerns, especially as competition in AI intensifies. Chinese startup DeepSeek’s launch of low-cost AI models has fuelled worries about an industry price war. Alphabet’s capital expenditure, estimated at $50 billion for last year, is expected to rise further in 2025 to support AI-driven search features and cloud expansion.
Google Cloud’s growth is forecast to slow in the fourth quarter despite high expectations. Analysts suggest that while heavy investment continues, efficiency gains have helped maintain profits. The company’s search and advertising business remains strong, with an expected 11.2% increase in revenue, though this marks a slight slowdown from the previous quarter. Competition from Amazon and TikTok continues to challenge Alphabet’s dominance in search advertising.
Political advertising linked to the US presidential election may have boosted Google’s revenue, following a similar trend at Meta. However, Meta’s cautious outlook for the first quarter has raised concerns about broader ad market trends amid economic uncertainty. Alphabet’s shares have climbed 7% this year after a strong rally in 2023, largely driven by confidence in its AI strategy.
Investors will closely watch whether Alphabet faces the same cloud business challenges as Microsoft, whose Azure growth slowed due to a shift in AI priorities. Google Cloud revenue is expected to rise by 32% in the fourth quarter, slightly down from the 35% growth seen previously but still outpacing Microsoft and Amazon. Maintaining momentum in AI while balancing cloud growth remains a key challenge for Alphabet.
Mitsubishi Heavy Industries expects continued strong demand for gas turbines, even as concerns rise over AI-driven energy efficiency. Chief financial officer Hisato Kozawa dismissed fears that Chinese AI model DeepSeek could reduce power consumption, reaffirming that global electricity demand remains on an upward trend.
Kozawa noted that MHI was unexpectedly viewed as an AI-related stock during last week’s market turbulence. The company reported record third-quarter earnings, with robust sales of gas turbines helping to lift full-year profit forecasts. The financial outlook for the year ending in March was raised to 240 billion yen (£1.55 billion), over 8% higher than previous estimates.
MHI’s strong performance extends beyond energy, with rising orders for jets, naval vessels, and missiles amid Japan’s expanding defence programme. The company’s stock has more than doubled in the past year, though it dipped 0.6% on Tuesday, closing at 2,218 yen per share, while the Nikkei 225 gained 0.7%.
Indian entrepreneur Bhavish Aggarwal is investing $230 million into Krutrim, an AI startup he founded, as part of India’s push to establish itself in the global AI market. The company, which develops large language models (LLMs) for Indian languages, aims to raise a total of $1.15 billion by next year, with Aggarwal seeking additional funding from external investors.
In a significant move, Krutrim has made its AI models open source and announced plans to build India’s largest supercomputer in partnership with Nvidia. The firm recently introduced Krutrim-2, a 12-billion parameter model that has demonstrated strong performance in Indian language processing and code generation. It has also launched BharatBench, a new evaluation framework designed to assess AI models’ proficiency in Indian languages.
The investment follows the launch of Krutrim-1, India’s first large language model, and aligns with broader efforts to position India as a key player in AI, traditionally dominated by the US and China. Krutrim has also begun hosting Chinese AI lab DeepSeek’s models on domestic servers, signalling India’s growing role in the AI ecosystem. With a supercomputer set to go live in March, the company is poised for rapid expansion in the coming months.
Dubai-based startup Qeen.ai has raised $10 million in a seed funding round led by Prosus Ventures to scale its AI-powered e-commerce platform. Founded by former Google and DeepMind researchers, the company develops autonomous AI agents that help businesses automate marketing, content creation, and sales, allowing smaller merchants to compete more effectively without relying on costly agencies or ad expertise.
Qeen.ai’s proprietary AI technology, which continuously learns from consumer interactions, has already generated over a million product descriptions and helped boost merchant sales by 30%. Its AI-powered Dynamic Content agent personalises online shopping experiences, adjusting marketing strategies in real time based on user behaviour. Since launching in mid-2024, the platform has served 15 million users, with notable clients including Dubai Store, 6th Street, and Jumia.
The startup plans to use the fresh funding to expand its team and enhance its AI capabilities, focusing first on the Middle East before expanding globally. With the e-commerce market in the MENA region expected to reach $50 billion by 2025, Qeen.ai aims to establish itself as a key player in AI-driven retail automation.
Paris-based startup Neuralk-AI has raised $4 million to develop AI models tailored for structured data, such as databases and spreadsheets. Unlike traditional AI, which excels at unstructured content like images and text, Neuralk-AI’s approach aims to help businesses extract deeper insights from their existing data warehouses. Retailers, in particular, could benefit from its models, using AI to optimise inventory, detect fraud, and refine customer recommendations.
The company, co-founded by Alexandre Pasquiou, plans to launch its AI models as an API for data scientists in commerce-focused industries. By automating complex workflows and enhancing data analysis, Neuralk-AI hopes to offer a more efficient alternative to traditional machine learning tools. The startup is already collaborating with major French retailers such as E.Leclerc and Auchan to test its technology.
Backed by Fly Ventures, SteamAI, and industry leaders including Hugging Face’s Thomas Wolf, Neuralk-AI is working towards becoming the leading AI solution for structured data. The first version of its model is expected to launch in the coming months, with a full benchmark release planned for later this year.
Meta has introduced a new policy framework outlining when it may restrict the release of its AI systems due to security concerns. The Frontier AI Framework categorises AI models into ‘high-risk’ and ‘critical-risk’ groups, with the latter referring to those capable of aiding catastrophic cyber or biological attacks. If an AI system is classified as a critical risk, Meta will suspend its development until safety measures can be implemented.
The company’s evaluation process does not rely solely on empirical testing but also considers input from internal and external researchers. This approach reflects Meta’s belief that existing evaluation methods are not yet robust enough to provide definitive risk assessments. Despite its historically open approach to AI development, the company acknowledges that some models could pose unacceptable dangers if released.
By outlining this framework, Meta aims to demonstrate its commitment to responsible AI development while distinguishing its approach from other firms with fewer safeguards. The policy comes amid growing scrutiny of AI’s potential misuse, especially as open-source models gain wider adoption.
