Suddenly, it looks like a new world in artificial intelligence.
The Chinese startup DeepSeek’s cheap new AI model tanked tech stocks broadly, and AI chipmaker Nvidia in particular, this week as the big bets on AI companies spending to the skies on data centers suddenly look bad — for good reason.
But worries eased a bit as it became apparent it actually cost much more to create this AI model, DeepSeek cheated by helping itself to OpenAI’s data, and it has cybersecurity and privacy issues. Besides, many other efforts at cheaper models, in the U.S. and elsewhere, and often open-source too, are already out there or underway. We’re in a different place with AI but not radically so. Mostly investors got ahead of themselves. More on all that just below.
If tech titans thought new President Trump would be a godsend for their bottom lines, they have to be wondering this week, barely 12 days into his second administration, if they made the right choice. This week he issued a broad spending shutdown, only to rescind it after widespread panic just about everywhere, including in the business world. He threatened potentially huge tariffs on Taiwan chips that would kill U.S. chip and hardware companies’ business. He floated a TikTok deal with Oracle, or maybe Microsoft, or maybe not. And somehow he blamed DEI for a plane crash involving trained air traffic controllers and pilots. I could go on but I won’t.
Check out theCUBE Research Chief Analyst Dave Vellante’s Breaking Analysis earlier this week for his and Enterprise Technology Research Chief Strategist Erik Bradley’s top 10 enterprise tech predictions.
On the earnings front, Microsoft stumbled and so did ServiceNow, but IBM and Meta both beat, making investors happy. Even Intel did OK, such as it was, as did Apple despite an iPhone slowdown and China issues.
There’s no slowdown in antitrust yet: U.K. antitrust hawks may come down on Amazon Web Services and Microsoft in the cloud market, and Justice sued to block HPE from buying Juniper.
The drumbeat of cyber consolidation continued this week with several acquisitions.
Next week comes another spate of important earnings reports, headlined by the two other big cloud players, Amazon and Alphabet, as well as Palantir, NXP Semiconductor, Kyndryl, AMD, Qualcomm, Arm, Uber, Cloudflare and more — full list at the bottom.
You can hear more about this and other news on John Furrier’s and Dave Vellante’s weekly podcast theCUBE Pod, out later today on YouTube. And don’t miss Dave’s weekly deep dive, Breaking Analysis, out this weekend.
Here’s all the news we could fit from News and beyond, in a very busy week:
AI and data: DeepSeek deep-sixes US stocks
Headline news and analysis
Tech stocks tank as Chinese startup DeepSeek stuns AI world with low-cost model rivaling US firms’ best Marc Andreessen’s observation that this is AI’s “Sputnik moment” may not be far off the mark, even if there’s a lot of murkiness around DeepSeek’s training costs, safety and privacy. It always seemed to me that there would be better ways to train these models than endless amounts of compute and data, and now we’re apparently seeing some.
There are many questions — for example, it’s possible DeepSeek “cheated”: OpenAI finds DeepSeek used its data to train R1 reasoning model … which is ironic, of course.
Still, the bottom line is a new outlook on where AI goes from here. A few takeaways:
–Open source usually wins and we’re seeing that start in AI.
—AI giants got a little too comfortable that they would keep their lead, especially with the help of the government that many keep insisting should get out of their way. But clearly they believe that spending billions will help them regain the lead: Report: OpenAI could double valuation to $340B with new $40B funding round
–We’re now past the stage of AI models by themselves determining industry dominance and well into the stage where the value will be creating applications on top of those models — wherever they are.
–But remember, this is China, so enterprises and certainly the government are going to be very careful whether and how they use DeepSeek’s models. But it’s wasting no time pressing its new advantage: DeepSeek launches Janus Pro AI image model it claims can outperform DALL-E And neither are cloud and infrastructure providers wasting any time offering the models: AWS now offers DeepSeek-R1 model on its cloud, and Nvidia announced it’s available as a preview NIM microservice.
–And the tables could easily be turned by other models — and at least five new efforts are already underway: Startup backed by top universities aims to deliver fully open AI development platform and Hugging Face wants to reverse engineer DeepSeek’s R1 reasoning model and Alibaba unveils Qwen 2.5 Max AI model, saying it outperforms DeepSeek-V3 and Mistral, Ai2 release new open-source LLMs And on Friday, OpenAI itself weighed in with a mini model: OpenAI makes its o3-mini reasoning model generally available One researcher even says he duplicated DeepSeek’s core technology for $30. It’s not clear exactly what that means, but it seems unlikely it’s not depending on the billions of dollars others have spent.
–Despite appearing now to be ineffective, those government export restrictions, especially on chips, remain important if the U.S. is to maintain the lead it still has. Anthropic CEO Dario Amodei argues, with more credibility than you might expect from a U.S. company with a stake in protecting its position, that export controls are all the more important now.
–Along with Trump axing Biden’s AI rules, we’re well along to removing more guardrails, which won’t be the unalloyed good AI’s fanatics insist.
More new models and services
Meta upgrades its Meta AI chatbot with more personalization features
OpenAI launches ChatGPT Gov to bring AI to government agencies
Kore.ai’s newest AI agents elevate business process automation to the next level
Oracle expands generative AI functions in supply chain cloud
Endor Labs’ newest tool helps developers discover and secure open-source models in their applications
Twitter and Block founder Jack Dorsey launches Goose, an open-source AI agent framework for automating engineering tasks
Money matters
UVeye, which uses AI to enable drive-through vehicle checks, raises $191M
AI voice cloning startup ElevenLabs raises $180M in funding round
Bluwhale raises $100M to build a dedicated ‘intelligence layer’ for decentralized AI agents
Rad AI raises $60M to help radiologists improve accuracy of patient care
Quibim, a startup using AI imaging to aid in disease detection, raises $50M
AI dentistry startup VideaHealth bites off $40M in venture capital funding
Atomicwork raises $25M to bring agentic AI to IT management
Reid Hoffman-backed AI drug discovery startup Manas AI launches with $24.6M
Observo reduces observability costs using agentic AI-powered data pipelines with $15M raise
Athenic AI raises $4.3M seed round led by BMW i Ventures to democratize data analysis
Applied Labs raises $4.2M for its AI-powered business automation platform
Advice: Gartner weighs in on ensuring data quality: Building a business case for continuous data quality assurance
There’s even more AI and big data news on News
Around the enterprise: Our top predictions for 2025
Headline news and analysis
Breaking Analysis: Top 10 enterprise technology predictions: What’s coming in 2025
Justice Department sues to block HPE’s $14B Juniper acquisition
UK regulator identifies competitive issues in public cloud market
Zeus Kerravala looks at the networking and cyber infrastructure needed for the Super Bowl: Preparing for the Super Bowl requires defense to be played off the field
Money matters
Trump plans to impose up to 100% tariffs on foreign-made chips It’s hard to take this seriously even as a negotiating ploy, because it makes so little sense, but he is the president.
Big earnings week:
Microsoft’s AI revenue grows, but its stock falls on lower guidance and concerns over spending
IBM stock soars on strong profit and bullish 2025 forecast
Meta crushes Wall Street’s profit targets as Zuckerberg dismisses DeepSeek threat Meanwhile, Zuckerberg keeps sucking up to Trump: Meta back in the ‘tent’ after agreeing to settle Trump’s $25M censorship lawsuit
ServiceNow stumbles with revenue miss and tepid guidance for the year ahead
Tesla expects 2025 growth despite missing estimates in fourth quarter
SAP beats sales and profit estimates, hints at forthcoming ‘game-changing innovation’
Intel’s stock inches up on solid earnings and revenue beat
Apple reports record quarterly revenue despite iPhone sales miss
Samsung’s stock falls on fears of weakness in memory chip markets
Netscout and Dynatrace report solid quarterly growth with increased revenue and earnings
Atlassian’s shares surge 18% after it smashes earnings expectations in latest quarter
ASML shares jump as surge in orders defies fears of DeepSeek hitting AI chip demand
Western Digital expects third-quarter revenue below estimates on weak demand but stock rises
Extreme Networks Q2 earnings and revenue top estimates but stock falls 3%
NinjaOne announces intent to acquire SaaS backup and data protection leader Dropsuite for $252M
Data center operator DataBank nets $250M equity investment (per News)
TravelPerk raises $200M as valuation nearly doubles to $2.7B
Onebrief raises $50M to transform military staffs
Ex-Autodesk execs snag $46M to build the next gen of architecture design (per News)
Finout raises $40M Series C for its cloud cost management service (per News)
SuperOps secures $25M to supercharge IT teams everywhere
Formance raises $21M to build the AWS for fintech infrastructure (per News)
Nue reels in $20M for its revenue management platform
We have more news on cloud, infrastructure and apps
Cyber beat: DeepSeek’s cyber and privacy issues
Attack & response
Chinese AI startup DeepSeek faces malicious attacks after surging in popularity and Sensitive DeepSeek database exposed to the public, cybersecurity firm Wiz reveals Not to mention, it turns out all the prompts and user info is stored on Chinese servers, not surprisingly — but that’s not going to go over well among enterprises, let alone governments.
Google report finds state-based hackers are using AI for research and content generation
FBI seizes domains of Cracked.io and Nulled.to in latest cybercrime crackdown
Zimperium reports warns of phishing campaign targeting mobile users with malicious PDFs
New report warns of sophisticated techniques being used by ransomware group Arcus Media
New services
Komprise introduces new sensitive-data management capabilities for AI and cybersecurity
AuthID unveils PrivacyKey for secure biometric authentication without data retention
Money matters
Cyber sector earnings:
Commvault stock inches up after positive earnings
F5 reports better-than-expected earnings results with double-digit revenue growth
Check Point delivers quarterly earnings beat with 6% revenue growth and strong billings
Tenable buys rival Vulcan for $150M to enhance its vulnerability remediation platform
CYE acquires security and infrastructure technology from Solvo to strengthen cloud security management
CHEQ acquires Deduce, expanding security platform with identity graph for human- and AI-generated fraud prevention
Study finds cybersecurity startup exits require record-high revenue and funding
Oligo Security raises $50M for its eBPF-powered application security platform
Seraphic raises $29M to secure browsers in the enterprise
Clutch grabs $20M to build out its nonhuman security ID platform (per News)
Hypori raises $12M to expand security virtual mobile access platform
More cybersecurity news here
Elsewhere in tech: TikTok keeps talking
Trump administration reportedly considering deal for Oracle to acquire TikTok Then again, who really knows? Now Trump says Microsoft is in talks to acquire TikTok.
X announces Visa partnership for X Money in step toward becoming an ‘everything app’
SoftBank to invest $500M in robotics startup SkildAI
Fusion power startup Helion raises $425M in funding
Alice & Bob raises €100M to build the world’s first error-resistant quantum computer by 2030
D3 raises $25M to put internet domain names on the blockchain
Decentralized identity project Humanity Protocol raises $20M
And check out more news on emerging tech, blockchain and crypto and policy
Comings and goings
Quest Software names a new CEO, industry veteran and most recently CloudSoda acting CEO Tim Page.
Adobe Chief Strategy Officer Scott Belsky is leaving to join film and TV production studio A24 as a partner leading tech and innovation projects.
Wissam Jabre is NetApp’s new CFO.
Former Okta and Zuora CIO and longtime Dell exec Alvina Antar is F5’s first chief digital officer.
What’s next: Another big earnings week
Monday, Feb. 3: Palantir, NXP Semiconductor, Kyndryl
Tuesday, Feb. 4: Alphabet, AMD, PayPal, Snap
Wednesday, Feb. 5: Qualcomm, Arm, Uber, Tenable
Thursday, Feb. 6: Amazon, Cloudflare, Fortinet, Qualys, Synaptics, OpenText
Image: News/Ideogram
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