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.
Samsung Electronics has warned of weak sales for its AI chips in the first quarter, citing US export restrictions on high-bandwidth memory (HBM) chips to China. These restrictions, combined with the company’s struggle to meet Nvidia’s HBM chip requirements, are expected to impact demand. Samsung’s reliance on Chinese customers for about 20% of its HBM sales makes it particularly vulnerable. Despite this, the company plans to release upgraded HBM3E products in March to address shifting market demands.
The company also reported a 29% drop in operating profit for the fourth quarter, totalling 6.5 trillion won ($4.48 billion). Samsung expects limited earnings growth in the first quarter, driven by sluggish demand in the memory chip market, particularly for smartphones and personal computers. In addition, delays in GPU production, mainly due to strong demand and engineering challenges, have affected memory chip requirements for servers in data centres.
Samsung’s mobile phone division also faced challenges, with a 22% drop in operating profit in the fourth quarter. The company’s decision to use Qualcomm’s application processors instead of its own Exynos chips for the Galaxy S25 lineup has weakened its position in the mobile chip market. Despite these hurdles, Samsung anticipates a recovery in the memory market by the second quarter, depending on its ability to supply Nvidia with advanced HBM3E chips.
While competitors SK Hynix and TSMC have benefitted from the AI boom, with record profits, Samsung’s performance in the AI chip market has fallen behind. The company’s future performance will heavily depend on its ability to secure a stronger foothold in the rapidly growing AI sector.
DeepSeek, a Chinese tech company, has made waves in the AI sector with a breakthrough that challenges the dominance of US tech giants. The company claims it can develop AI models that rival or surpass Western counterparts at a fraction of the cost, sparking concerns about America’s lead in the industry. In response, the CEOs of Microsoft and Meta have defended their substantial investments in AI infrastructure, emphasising that such spending is necessary to meet growing demand and stay competitive.
Microsoft and Meta have committed billions to AI, with Microsoft earmarking $80 billion for the current fiscal year and Meta pledging up to $65 billion. Both companies argue that expanding their computing networks is critical to addressing the increasing demands of AI applications. Microsoft’s CEO Satya Nadella highlighted the need to overcome capacity constraints, while Meta’s Mark Zuckerberg stressed that heavy investment would give them a strategic advantage over time.
Despite these bold investments, there are signs of investor frustration. Microsoft’s shares recently fell 5% following disappointing growth forecasts for its cloud business, and Wall Street analysts are calling for clearer plans on how these investments will translate into profits. Meta also sent mixed signals, reporting a strong fourth quarter but offering a weak sales outlook, leaving some to question the long-term payoff of their AI ventures.
There are indications that both companies may adjust their approach. Microsoft’s CFO, Amy Hood, noted that while they will continue investing in AI, the pace of spending will slow in the coming years, signalling a shift towards more sustainable growth. As the AI race heats up, it remains to be seen whether these large investments will eventually lead to the anticipated returns.
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.
DeepSeek’s AI assistant has surged ahead of competitors, overtaking ChatGPT in downloads on Apple’s App Store. The Chinese startup’s success has raised concerns among US tech firms while sparking national pride in China. Many see it as a symbol of the country’s resilience against Washington’s tech restrictions.
The company’s ability to offer AI services at a lower cost than OpenAI has prompted discussions about the future of US firms like Nvidia and Microsoft. State media and local commentators have celebrated the achievement, with some arguing it proves US containment efforts have failed. A widely shared article from Zhejiang’s provincial media office argued that China can compete on equal footing in technological innovation.
Public sentiment echoes reactions to Huawei’s surprise 2023 smartphone release, which was seen as defying US sanctions. Social media users have expressed pride in DeepSeek’s rise, with many hoping the country’s AI sector will continue advancing. Some view it as evidence of China’s growing strength in AI.
Mexico has objected to Google’s decision to rename the Gulf of Mexico as the Gulf of America for US users on Google Maps. President Claudia Sheinbaum confirmed on Wednesday that her government will send an official letter to the tech giant demanding clarification.
The name change follows an announcement by the US government that it had officially rebranded the body of water. In response, Google stated that its platform displays local official names when they differ across countries.
The move has sparked concerns in Mexico over sovereignty and historical recognition. With the government pressing for an explanation, the issue highlights the growing tension between technology firms and national identities in the digital space.
Ireland’s Data Protection Commission (DPC) has asked Chinese AI company DeepSeek to clarify how it processes the personal data of Irish users. The request comes as part of ongoing efforts to ensure compliance with European data protection laws.
Unlike major US tech firms that base their EU operations in Ireland, DeepSeek has not designated the country as its European headquarters. This means the company does not fall under the same oversight framework as other large technology firms, prompting the regulator to seek direct answers on its data handling practices.
The DPC’s inquiry highlights the increasing scrutiny of foreign tech companies operating in Europe, especially those dealing with sensitive user information. As concerns over privacy and data security continue to grow, regulators are expected to tighten enforcement to ensure adherence to strict EU data protection laws.
ASML, the leading maker of computer chip equipment, reported impressive fourth-quarter bookings of 7.09 billion euros ($7.39 billion), significantly surpassing analyst expectations. The surge in orders was driven by the increasing demand for advanced chip production tools fueled by the boom in AI. Following the announcement, ASML’s stock rose 11% to 722 euros, signalling investor optimism despite recent market volatility.
Analysts had expected bookings to total around 3.99 billion euros, up from 2.63 billion euros in the previous quarter. ASML’s CEO, Christophe Fouquet, emphasised that AI growth is a key driver for the industry, with major companies like TSMC, ASML’s largest customer, benefiting from the rise in AI chip demand. The company reported a net income of 2.7 billion euros on sales of 9.3 billion euros for the quarter, surpassing expectations.
Despite the positive results, analysts caution that the long-term impact of DeepSeek’s AI model—released this week and requiring less computing power than competitors—remains uncertain. Some fear it could affect the large investments tech giants make in AI chips. However, ASML’s strong quarterly performance and its 2025 sales forecast, ranging from 30-35 billion euros, suggest continued growth, particularly from companies like TSMC and SK Hynix.
ASML’s largest market was the US in the fourth quarter, accounting for 28% of sales, closely followed by China. However, the company anticipates that sales in China will decline, partly due to export restrictions on chip equipment imposed by the US and Dutch governments for national security reasons.
