OpenAI announced on Thursday that it is evaluating US states as potential locations for data centres supporting its ambitious Stargate project, which aims to secure the US’s lead in the global AI race. The project is seen as crucial for ensuring that AI development remains democratic and open, rather than falling under authoritarian control, according to Chris Lehane, OpenAI’s chief global affairs officer.
Stargate, a venture backed by SoftBank, OpenAI, Oracle, and other investors, is set to receive up to $500 billion for AI infrastructure. A significant portion of this investment, $100 billion, will be deployed immediately, with the rest scheduled over the next few years. Texas has been designated as the flagship location for Stargate’s data centres. An initial site under construction in Abilene is expected to begin operations later this year.
The announcement follows the rise of DeepSeek, a Chinese AI model that challenges the traditional view that AI development requires large, specialised data centres. DeepSeek’s use of cheaper chips has raised concerns among investors, leading to a significant drop in tech stock values, including a record $593 billion loss for Nvidia, the leading AI chipmaker.
OpenAI is considering data centre locations in approximately 16 states, with plans to expand the Stargate network to five to ten campuses in the coming months.
When DeepSeek first emerged in late 2023, it seemed like another ambitious startup in the crowded AI landscape. Founded by Chinese hedge fund manager Liang Wenfeng, DeepSeek began with modest attention, releasing AI models that showed promise but were overshadowed by industry giants like OpenAI, Meta, and Google. However, in December 2024, the company catapulted into the global spotlight with the launch of DeepSeek R1, an AI model that shook the foundations of the tech world. This development was not just a technological marvel but a geopolitical wake-up call.
DeepSeek R1 stunned the industry with its ability to rival the capabilities of market leaders, achieving near-parity with models like GPT-4 and Gemini. What set it apart, however, was its shockingly low cost. While US companies like Meta and OpenAI pour billions into AI research and infrastructure, DeepSeek reportedly developed its model for just $5.6 million, leveraging less advanced chips that bypassed US export restrictions. The revelation underscored a significant shift in the AI arms race: resourcefulness could rival raw financial power. The app quickly became the most downloaded on Apple’s App Store, disrupting markets and causing US tech stocks to shed nearly $1 trillion in value within days.
The conversation shifted to national security as the US government scrambled to respond. DeepSeek’s emergence directly challenged US dominance in AI and called into question the effectiveness of export restrictions imposed by the Biden administration. Returning for his second term, President Donald Trump convened a high-stakes meeting with Nvidia CEO Jensen Huang to discuss tightening chip export policies. Nvidia, whose shares dropped 17% after DeepSeek’s success, found itself at the centre of the geopolitical battle, with its cutting-edge AI chips both coveted and restricted.
The Trump administration is now contemplating additional measures to curb China’s access to advanced technology, including halting Nvidia’s H20 chip exports, initially designed to comply with export controls. Lawmakers from both parties are urging a thorough review of US export policies in light of DeepSeek’s achievements. Reports have even suggested that DeepSeek may have illegally obtained US-restricted chips, prompting investigations by the Commerce Department.
For its part, DeepSeek has embraced the controversy. Liang Wenfeng has framed the company’s success as a triumph of innovation over-dependence on Western technology. However, questions about the company’s transparency linger. Critics argue that DeepSeek’s low-cost claims omit the broader expenses of research and development, while concerns about its alignment with the Chinese government’s strategic goals have fueled scepticism in the West. The fact that DeepSeek’s earlier models censored politically sensitive content only deepens fears about its role in state-led narratives.
DeepSeek’s rise has challenged assumptions about the cost and accessibility of cutting-edge technology, prompting both excitement and unease. While the US tightens its policies and grapples with its response, DeepSeek’s trajectory is proof that the race for AI dominance is no longer confined to Silicon Valley; it’s now a high-stakes game of global power and influence.
US President Donald Trump and Nvidia CEO Jensen Huang discussed the challenges posed by China’s advancements in AI, particularly focusing on the impact of Chinese AI company DeepSeek.
Chinese investors are flocking to AI-related stocks, betting that the success of home-grown startup DeepSeek will propel China to the forefront of the AI race amid the escalating Sino-US technology conflict.
Security concerns lead to Australian ban on DeepSeek
Concern over potential security threats has prompted Australia to ban Chinese AI startup DeepSeek from all government devices, joining a growing list of nations restricting its use.
A recent investigation has revealed that dozens of WhatsApp users across the globe were targeted by advanced spyware designed to infiltrate their devices without any action on their part.
Imagine 100,000 people standing in utmost silence for 15 minutes, with their phone flashlights pointed at the sky. They pay tribute to the 15 innocent people who died under the rubble of the collapsed, newly reconstructed eave of the railway station in the city of Novi Sad, Serbia. 100,000 students and supporting citizens, standing still and united in palpable silence, in Belgrade, the capital of Serbia. Those present witnessed a moment that sent a chill up their spine.
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DeepSeek’s open-source approach promotes accountability and allows developing countries to leverage AI solutions, potentially levelling the playing field. The shift towards open-source models may also encourage smaller players to create tailored AI systems, fostering a collaborative environment rather than a competitive race. Consequently, trade and technological diffusion can significantly enhance global economic growth and innovation.
John Schulman, a co-founder of OpenAI, has stepped down from his role at Anthropic, the AI startup confirmed on Wednesday. Schulman had joined Anthropic last year after leaving OpenAI in August, aiming to focus on AI alignment and return to hands-on technical work. Anthropic’s chief science officer, Jared Kaplan, expressed regret over his departure but wished him well in his future endeavours.
Anthropic has grown into a key competitor in the AI foundation model space, with annualised revenue reaching approximately $875 million. The company provides access to its AI models both directly and through third-party cloud services such as Amazon Web Services. Schulman’s departure was first reported by The Information.
The move marks another shift in the AI industry as competition intensifies among leading companies. OpenAI, Anthropic, and other key players continue to race towards advancing AI capabilities while addressing concerns around safety and alignment.
Elizabeth Kelly, the inaugural director of the United States AI Safety Institute, has stepped down from her role after a year overseeing efforts to measure and counter risks from advanced AI systems. During her tenure, the institute reached agreements with OpenAI and Anthropic to test their models before release and collaborated with global AI safety organisations.
The institute, created under former President Joe Biden’s administration, operates within the US Commerce Department‘s National Institute of Standards and Technology. Since taking office, President Donald Trump has revoked Biden’s 2023 executive order on AI, raising questions about the institute’s future direction under the new administration.
Kelly did not comment further on her departure but expressed optimism in a LinkedIn post, stating that the institute’s mission remains crucial to the future of AI innovation. The White House has yet to clarify its plans for AI regulation and safety oversight.
OpenAI is set to air its first-ever television advert during the upcoming Super Bowl, marking its entry into commercial advertising. The Wall Street Journal reported that the AI company will join other major tech firms in leveraging the massive Super Bowl audience to promote its brand. Google previously used the event to highlight its AI capabilities.
The Super Bowl is one of the most sought-after advertising platforms, with high costs reflecting its enormous reach. A 30-second slot for the 2025 game has sold for up to $8 million, an increase from $7 million last year.
The 2024 Super Bowl attracted an estimated 210 million viewers, and this year’s event will take place in New Orleans on 9 February at the Caesars Superdome.
OpenAI has seen rapid growth since launching ChatGPT in 2022, reaching over 300 million weekly active users. The company is in talks to raise up to $40 billion at a $300 billion valuation and recently appointed Kate Rouch as its first chief marketing officer. Microsoft holds a significant stake in the AI firm.
OpenAI is set to introduce an education-focused version of its chatbot to around 500,000 students and faculty at California State University. The rollout, covering 23 campuses, aims to provide personalised tutoring for students and administrative support for faculty members. The initiative is part of OpenAI’s broader effort to integrate its technology into education despite initial concerns about cheating and plagiarism.
Universities such as the Wharton School, the University of Texas at Austin, and the University of Oxford have already adopted ChatGPT Enterprise. In response, OpenAI launched ChatGPT Edu in May last year to cater specifically to academic institutions. The education sector has become a growing focus for AI companies, with Alphabet investing $120 million into AI education programs and preparing to introduce its Gemini chatbot into school-issued Google accounts for teenage students.
Competition in AI-driven education is intensifying. In the UK, Prime Minister Keir Starmer inaugurated the first Google-funded AI university in London, providing teens with AI and machine learning resources. As AI adoption in schools increases, major tech companies are vying for a dominant role in shaping the future of digital learning.
Snap has introduced an AI-powered text-to-image model designed to run efficiently on mobile devices, generating high-resolution images in just 1.4 seconds on an iPhone 16 Pro Max. Unlike cloud-based systems, this model operates entirely on the device, reducing costs while maintaining impressive visual quality. The company plans to integrate it into Snapchat’s AI Snaps and Bitmoji features in the coming months.
By developing its own AI model, Snap aims to provide users with more advanced creative tools while lowering operational expenses. The move aligns with a broader trend among tech companies investing heavily in AI to enhance their platforms. Previously, Snap relied on external providers like OpenAI and Google, but its in-house model gives it more control over future innovations.
Snapchat’s AI investment highlights the growing competition in mobile AI technology, with major players racing to deliver faster and more efficient features. As the company prepares to roll out these new capabilities, it remains to be seen how they will shape user experiences and engagement on the platform.
India‘s finance ministry has issued an advisory urging employees to refrain from using AI tools like ChatGPT and DeepSeek for official tasks, citing concerns over the potential risks to the confidentiality of government data. The directive, dated January 29, highlights the dangers of AI apps on office devices, warning that they could jeopardise the security of sensitive documents and information.
This move comes amid similar actions taken by other countries such as Australia and Italy, which have restricted the use of DeepSeek due to data security concerns. The advisory surfaced just ahead of OpenAI CEO Sam Altman’s visit to India, where he is scheduled to meet with the IT minister.
Representatives from India’s finance ministry, OpenAI, and DeepSeek have yet to comment on the matter. It remains unclear whether other Indian ministries have implemented similar measures.
A federal judge in California has indicated that some aspects of Elon Musk’s lawsuit against OpenAI may proceed to trial. Musk will be required to testify, with a jury ultimately deciding the outcome. The lawsuit challenges OpenAI’s transition from a nonprofit to a for-profit entity, a move Musk argues contradicts its original mission.
Judge Yvonne Gonzalez Rogers is reviewing Musk’s request to block OpenAI’s conversion before the trial. While she has not yet ruled on the injunction, she suggested Musk’s legal team may need to present more evidence. OpenAI’s lawyers argue that the restructuring is necessary to secure investment and continue developing advanced AI models.
The dispute has intensified as OpenAI seeks billions in funding, which is conditional on its corporate restructuring. Experts note that such nonprofit-to-for-profit transitions are rare, typically occurring in healthcare rather than AI startups. OpenAI maintains that Musk should compete in the market rather than pursue legal action.
OpenAI has announced a new partnership with Kakao to develop AI products for South Korea. This marks OpenAI’s second major alliance in Asia this week, following a similar deal with SoftBank for AI services in Japan. OpenAI CEO Sam Altman, who is on a tour of Asia, also met with leaders from Samsung Electronics, SoftBank, and Arm Holdings. The partnership with Kakao is seen as part of OpenAI’s broader strategy to expand its AI presence in the region, with a focus on messaging and AI applications.
Kakao, which operates South Korea’s dominant messaging app KakaoTalk, plans to integrate OpenAI’s technology into its services as part of its push to grow its AI capabilities. Although Kakao has lagged behind rival Naver in the AI race, the company is positioning AI as a key growth engine. Altman highlighted the importance of South Korea’s energy, semiconductor, and internet sectors in driving demand for AI products, noting that many local companies will play a role in OpenAI’s Stargate data centre project in the US.
In addition to his work with Kakao, Altman met with executives from SK Group and Samsung to discuss AI chips and potential cooperation. SK Hynix, a key player in the production of AI processors, has been in discussions with OpenAI regarding collaboration in the AI ecosystem. Altman also indicated that OpenAI is actively considering involvement in South Korea’s national AI computing centre project, which is expected to attract up to $1.4 billion in investment.
Following the announcement, Kakao’s stock fell by 2%, after a 9% surge the previous day.
