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.
OpenAI has introduced a new AI tool called deep research, designed to conduct multi-step research on the internet for complex tasks. The tool is powered by an optimised version of the upcoming OpenAI o3 model, enabling it to browse and analyse online content, including text, images, and PDFs, to generate detailed reports.
Deep research significantly reduces the time required for research, with OpenAI stating that it accomplishes tasks in minutes that would take a human several hours.
Despite its capabilities, the tool remains in its early stages and has limitations, such as difficulties in distinguishing credible sources from rumours and challenges in conveying uncertainty accurately.
The feature is already accessible via the web version of ChatGPT and will be extended to mobile and desktop applications later in February.
Deep research is the second AI agent introduced by OpenAI this year, following the January preview of Operator, which assists users with tasks like to-do lists and travel planning.
SoftBank Group CEO Masayoshi Son announced on Monday that he has agreed with OpenAI CEO Sam Altman to establish a joint venture in Japan, called SB OpenAI Japan, to offer AI services to corporate clients. This venture will be jointly owned by OpenAI and a company set up by SoftBank and its telecoms arm. In addition, SoftBank will pay $3 billion annually to integrate OpenAI’s technology across its group companies.
Son’s involvement with OpenAI is deepening, with reports indicating that SoftBank plans to invest between $15 billion and $25 billion in the company. SoftBank is also committing $15 billion to Stargate, a joint venture with OpenAI and Oracle to build AI capacity in the US. Son’s support for OpenAI follows a period of retrenchment for the investment giant, but he is reasserting his influence in the tech sector after setbacks in SoftBank’s tech portfolio.
In the context of rising competition, China’s DeepSeek has prompted some investors to question the immense funds being poured into US-based AI companies. However, Altman believes global demand for AI computing power will continue to surge. Son and Altman also met with Japanese Prime Minister Shigeru Ishiba on Monday to discuss further developments.
DeepSeek, a Chinese AI company, is shaking up the ΑΙ landscape by offering technology at a significantly lower cost compared to US competitors like OpenAI. Hemanth Mandapati, CEO of German startup Novo AI, recently switched to DeepSeek’s chatbot services, noting that the transition was quick and easy, and the cost savings were substantial. Mandapati reported that DeepSeek’s pricing was five times lower than what he was paying, with no noticeable difference in user performance. Analysts estimate that DeepSeek’s prices are 20 to 40 times cheaper than OpenAI’s, making it an attractive option for many startups.
The rise of DeepSeek is seen as a potential game-changer, particularly in Europe, where tech startups have struggled to compete with their US counterparts due to limited funding. Some believe DeepSeek’s low-cost offerings could democratise AI and help level the playing field with major tech companies. However, concerns about DeepSeek’s data practices, particularly regarding the potential copying of OpenAI’s data or censorship of Chinese content, have raised regulatory questions across Europe.
Despite scepticism around the actual cost of DeepSeek’s training and data usage, the company has garnered significant attention, especially after its model topped the productivity app rankings on the Apple App Store. Industry leaders argue that this shift in pricing could spark a broader movement in AI, with smaller companies gaining more access to advanced technologies without needing large budgets. This could foster innovation across the sector, although major corporations remain cautious due to security and integration concerns.
As the cost of AI continues to fall, competition is intensifying. For example, Microsoft recently made OpenAI’s reasoning model available for free to users of its Copilot platform. While price is becoming a dominant factor in AI adoption, industry experts suggest that trust and security certifications will still play a critical role for larger businesses when choosing their AI partners.
SoftBank Group is in talks to lead a funding round of up to $40 billion for OpenAI, aiming to value the AI developer at $300 billion, including the new investment. This potential round, which would set a record for a private company, comes amid the growing competition in the AI sector, notably from Chinese startup DeepSeek. Despite this, SoftBank has valued OpenAI at $260 billion, up from $150 billion just a few months ago. The funding is expected to come via convertible notes and is contingent on OpenAI restructuring its business to limit the control of its non-profit arm.
The move would be a bold bet for SoftBank and its CEO Masayoshi Son, who has about $30 billion in cash available for investment. SoftBank’s commitment to OpenAI could be as much as $25 billion, with some funds potentially directed towards OpenAI’s joint venture Stargate, which aims to secure the US position in the global AI race against China. This would add to SoftBank’s previous $15 billion commitment to Stargate.
The funding talks come as OpenAI’s valuation has surged due to its influential AI model, ChatGPT, while competing companies, such as Microsoft and Meta Platforms, continue to ramp up their own AI investments, with Microsoft alone earmarking $80 billion for AI development. Meanwhile, DeepSeek has made waves by claiming that its latest AI model was developed with significantly lower costs than its competitors, further intensifying the race in AI innovation.
India’s IT minister, Ashwini Vaishnaw, has praised the Chinese startup DeepSeek for its breakthrough in affordable AI, which has disrupted the sector with a powerful model costing just $5.5 million. He likened DeepSeek’s efficient approach to his government’s efforts to develop a local AI model through the IndiaAI mission, a $1.25 billion initiative to support AI startups and infrastructure development in India.
DeepSeek’s rapid success, claiming it took just two months to build its model using Nvidia’s H800 chips, has challenged the belief that China lags behind the US in AI. The startup’s app recently surpassed OpenAI’s ChatGPT in downloads on the Apple App Store, further highlighting its impact. Vaishnaw’s comments were seen as a response to remarks made by OpenAI’s CEO Sam Altman, who had previously expressed doubts about India’s ability to compete in the AI space with a $10 million budget.
Vaishnaw pointed out that while some questioned the government’s large AI investment, DeepSeek’s achievements prove that significant results can be achieved with more modest spending. As Altman prepares to revisit India in early February, his comments from last year continue to stir debate online, especially following DeepSeek’s unexpected success in the AI race.
Altman’s visit coincides with ongoing legal issues for OpenAI in India, as the company is engaged in a copyright dispute with local digital news and book publishers. The growing attention on AI developments in India underscores the shifting dynamics in the global AI race.
Top White House advisers have raised concerns over China’s DeepSeek using a technique known as “distillation” to potentially replicate US AI models, a method where one AI system learns from another. This could allow DeepSeek to benefit from the extensive investments made by US rivals, such as OpenAI, without incurring the same costs. DeepSeek recently made waves by releasing an AI model that rivals those of US giants, at a fraction of the cost, and giving away the code for free. US tech companies, including OpenAI, are now investigating whether DeepSeek’s model may have improperly used this distillation method.
Distillation, while common in the AI industry, may violate the terms of service of models like OpenAI’s. The technique allows a newer, smaller model to benefit from the learnings of a larger, more advanced one, often without detection, especially when using open-source models. Industry experts have pointed out that blocking such practices is difficult, particularly with freely available models like Meta’s Llama and French startup Mistral’s offerings. Some US tech executives, however, are advocating for stricter export controls and customer identification measures to limit such activities.
Despite the concerns, DeepSeek has not responded to the allegations, and OpenAI has stated it will work with the US government to protect its intellectual property. However, as AI technology continues to evolve, finding a way to prevent distillation may prove to be a complex challenge. The ongoing debate highlights the growing tensions between the US and China over the use of AI and other advanced technologies.
SoftBank is reportedly in talks to invest up to $25 billion in OpenAI, the owner of ChatGPT, as part of its broader push into the AI sector. The investment, which could range from $15 billion to $25 billion, would go towards supporting OpenAI’s commitment to Stargate, a joint venture between SoftBank, Oracle, and OpenAI aimed at securing the US’s lead in the global AI race. This deal would be in addition to the $15 billion SoftBank has already committed to the Stargate initiative, although the talks are still in the early stages.
Stargate, which plans to invest up to $500 billion, has garnered attention as a major player in the competition between the US and China over AI dominance. However, the recent rise of DeepSeek, a Chinese startup that has shaken up the market with its low-cost AI model, has put pressure on SoftBank’s plans. Despite a surge in SoftBank’s share price following the Stargate announcement, the company has seen its stock drop more than 12% due to the market response to DeepSeek’s success.
SoftBank CEO Masayoshi Son’s strategy to secure a significant stake in OpenAI and fulfil Stargate’s goals has reportedly been reviewed and approved by OpenAI’s board. SoftBank had previously acquired a $1.5 billion stake in OpenAI, which was valued at $157 billion in its latest funding round. Despite the ongoing discussions, both SoftBank and OpenAI have declined to comment on the latest investment talks.
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.
