Technology

➚ MOVE FAST: Catch up. Alibaba touted the release of its Qwen 2.5 AI model, saying it outperforms DeepSeek’s blockbuster V3 release, OpenAI’s 4o, and Meta’s most advanced Llama platform. The announcement will likely further rattle Washington as it seeks to contain China’s tech prowess.

➘ BREAK THINGS: Worked up. OpenAI is probing whether DeepSeek improperly obtained its data to train its AI model, which Donald Trump’s AI czar David Sacks says amounted to “theft.” That intensifies the US-China tech cold war, with Sam Altman’s firm banning Chinese-based accounts suspected of distilling its models.

Holy See. AI concerns have reached the highest levels of government systems, and the Vatican is no different. Pope Francis, the leader of the Catholic Church, on Tuesday released a 117-paragraph document detailing AI’s risks and rewards, and reflecting on how it fits into the Christian faith.

The Church regards intelligence as a key component of how humans are created “in the image of God,” according to the Bible, so even in its most advanced form, AI lacks the spiritual and moral dimensions of human thinking, the document says. Even as researchers tout the prospects of AGI, the technology cannot equal or surpass human intelligence because it “lacks the richness of corporeality, relationality, and the openness of the human heart to truth and goodness,” the Pope said.

The document also warns about the dangers of the technology, including its potential to advance instruments of war and further alienate disenfranchised communities.

Pope Francis previously called on developers to create the systems ethically. He spoke at an AI conference last year alongside leaders of other world religions, including Judaism, Islam, Buddhism, and Hinduism. Executives at Microsoft, IBM, and Cisco have signed the Church’s pledge on ethical AI development.

Russia’s breakthrough in the ’60s Space Race did not signal the end of spending big dollars on space research. And DeepSeek’s success doesn’t mean spending billions of dollars on AI infrastructure, such as GPUs, is useless or will stop any time soon.

The US DeepSeek freakout is, instead, our greatest mass hallucination since… well… the drone fantasy in New Jersey a few weeks earlier, similarly amplified by heavy-breathing media reports. Axios reported that DeepSeek represented an “extinction-level event for venture capital firms that went all-in on foundational model companies.” New York Times veteran tech reporter Mike Isaac wrote that the tech companies’ “biz model stands to be vaporized along with the value of their shares, and the billions of dollars already invested.”

This hyperbole festered over the weekend, spreading on X and Reddit and a host of other social media platforms until it hit the stock market like a bomb on Monday, sending any public company making big bets on AI tumbling.

Part of the issue was timing. The DeepSeek R1 release came on the heels of the blockbuster announcement by President Donald Trump that OpenAI, Oracle, and SoftBank were teaming up for a potential $500 billion AI infrastructure investment in Texas.

But as the dust settles, the DeepSeek hysteria may reveal more about how little the market understands the AI industry.

Since the launch of ChatGPT, AI researchers have been figuring out creative ways to distill capabilities of larger models down into smaller, more efficient versions. Meta and the French national champion Mistral have been among the best at this game, launching open-source models that have been popular in the AI research world and in some industries. Pressure from those providers has helped drive prices down quickly.

Simply put: Massive gains in efficiency are a given. We don’t yet know enough about DeepSeek’s R1 model to say exactly how it will perform in real-world scenarios. But even the most rosy predictions don’t really change the landscape.

That’s because appetite for AI is insatiable, especially in software development, where the biggest issue today is “token limits” that get in the way of complex projects. The other bottleneck is capability. We are simply nowhere near a point where AI is good enough for everyday use for average people.

To get there, it will take many more breakthroughs and a lot more investment in infrastructure, like the $500 billion accelerated compute clusters in Texas.

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Smartphone maker Huawei serves as a cautionary tale on limiting Chinese technology, as a similar debate reignites with DeepSeek’s advancements in cheap and efficient AI. Years of tightening US government restrictions targeted Huawei and its global supply chain — intended to impede China’s growing tech prowess. They limited the company’s customer base and tanked its sales, but Huawei has since thrived on diversifying its offerings and expanding its presence domestically.

In recent years, US tech companies have focused on semiconductor spending and building massive infrastructure projects on the promise it is necessary for AI development. Meanwhile, the sanctions may have had the unintended consequence of forcing Chinese companies to operate more efficiently without access to US chips and other components.

Google’s maps business has reportedly marked the US as a “sensitive country,” a classification applied to nations with strict governments and (in this case) border disputes, joining the list with Russia and China, according to CNBC. The reclassification follows an executive order from President Donald Trump that renames the Gulf of Mexico as the “Gulf of America,” and Alaska’s Mount Denali as “Mount McKinley.” In a surprising move to those who initially found Trump’s declaration negligible, Google said it would comply with the name changes when the government updates its official sources, in accordance with its “longstanding practice” of doing so. The US also joins Israel and Iraq, among others, on the sensitivity list.

Google’s move highlights Big Tech’s eagerness to play ball with the Trump administration during its early days. It follows the scaling back of DEI initiatives from Meta and Amazon, as well as Meta’s removal of third-party fact checking on Facebook and Instagram — after Trump’s repeated criticism that the platforms held anti-conservative bias.

The Biden administration held far fewer meetings with corporate executives compared with the first Trump administration, a Semafor analysis found.

According to public calendars, former Treasury Secretary Steven Mnuchin logged three times as many meetings and official conversations as his successor Janet Yellen in the first three years of their respective tenures, Rachyl Jones and Liz Hoffman reported. Such chilliness may help explain why many corporate leaders rallied to support Trump during the 2024 election.