You are invited to join us for Global Crisis Watch 313, on Friday, January 31st at 10:00 GMT.
The highlighted topics will include:
DeepSeek’s AI Shock: How a Chinese Startup Shook Global Markets
The rise of China’s DeepSeek AI chatbot has sent shockwaves through global tech markets, triggering a massive sell-off in semiconductor stocks. DeepSeek, a low-cost AI assistant, quickly became the most downloaded free app in the US, surpassing OpenAI’s ChatGPT. Its reported development cost of just $6 million challenges the notion that China is far behind US AI leaders, raising concerns about the future of AI investments.
Nvidia, the dominant AI chip supplier, saw its stock price plummet nearly 17%, wiping out $600 billion in market value—the largest one-day loss in US history. Other AI-related firms, including Broadcom, Microsoft and Alphabet, also experienced significant declines. While US investors remain uncertain about DeepSeek’s long-term impact, European semiconductor stocks performed better, with ASML rising 5.6% on strong earnings.
DeepSeek’s emergence highlights growing US-China competition in AI. The chatbot is powered by open-source models and developed using a mix of advanced Nvidia A100 chips—stockpiled before US export restrictions—and lower-end alternatives. Its success suggests China may be finding ways to advance AI development despite trade barriers. However, some analysts remain skeptical, citing a lack of transparency about its funding and computing power.
The news also raised concerns about AI investments. US tech giants recently pledged $500 billion to build AI infrastructure, but DeepSeek’s rapid rise could alter expectations about cost efficiency. Meanwhile, the startup reported a cyberattack, leading it to temporarily restrict new user registrations.
As the AI landscape evolves, DeepSeek’s rise challenges established players and may signal a shift in how AI development and investment strategies unfold in the coming years.
AI and Crypto: The New Front in US-China Tech Rivalry
The US-China technological rivalry is entering a new phase, with artificial intelligence (AI) and digital currencies emerging as key battlegrounds. The rise of DeepSeek, a Chinese AI startup that has developed models rivaling top US AI firms at a fraction of the cost, has alarmed Washington. The White House is now reviewing the national security implications of DeepSeek, with concerns over potential intellectual property theft. The emergence of low-cost, high-performing AI models from China threatens the market dominance of US firms like OpenAI and Google.
President Donald Trump has framed DeepSeek’s rise as a challenge for American tech firms to stay competitive. His approach to AI and cryptocurrency balances innovation with regulatory oversight. Meanwhile, China is aggressively promoting its state-controlled digital yuan while banning private cryptocurrencies. The People’s Bank of China (PBoC) is pushing for broader adoption of the digital yuan, including cross-border transactions, to challenge the dominance of the US dollar.
China is also investing $8.2 billion in AI development, focusing on chip production, research and data centers to counteract US semiconductor export restrictions. In response, China has imposed export controls on gallium and germanium, crucial elements for chipmaking.
The convergence of AI and digital currency could reshape global trade, with China leveraging AI-driven financial systems and digital currencies to bypass Western- controlled financial networks. The US, relying on private sector-led innovation, is working to maintain its technological dominance through investment, regulation and security measures. As both nations refine their strategies, the competition between decentralized innovation and state-controlled technological expansion will shape the future of global economic power.
Trump’s Funding Freeze Halted: Judge Throws Wrench in His Power Play
Donald Trump’s recent attempt to freeze federal funding has sparked a political and legal firestorm, shining a light on his broader vision of unchecked executive power. The Office of Management and Budget (OMB) issued a memo halting all federal financial assistance, including grants and loans, except for Social Security and Medicare. This decision caused immediate confusion, with essential programs, from Medicaid to Meals on Wheels, thrown into uncertainty. The White House defended the freeze, claiming it was meant to align spending with the president’s priorities. However, critics argue that it represents a dangerous overreach and violates the separation of powers established by the Constitution.
The freeze directly challenges Congress’s exclusive constitutional authority over government spending. It sought to redirect or withhold funds already allocated by lawmakers, a move that many saw as unconstitutional. The backlash was swift and intense. Several federal judges issued temporary orders blocking parts of the freeze, and multiple organizations filed lawsuits in an attempt to stop it from going into effect. Democratic lawmakers and advocacy groups warned that this action could lead to disastrous consequences for essential services, such as research programs, public health services and local health departments.
This incident is part of a broader trend of Trump’s administration asserting presidential authority without congressional consent. His push for increased executive power has raised alarms about the erosion of checks and balances within the US government. Legal battles over this executive order are expected to continue, raising crucial questions about the balance of power in American democracy.
Trump’s Gaza Displacement Proposal Faces Rejection from Arab Nations and Europe
US President Donald Trump’s proposal to relocate Gaza’s 1.5 million residents to Egypt and Jordan has sparked international condemnation, with strong opposition from Arab nations and European governments. Trump justified the idea by citing the destruction in Gaza and suggested Arab nations could “build housing” elsewhere. However, Egypt’s President Abdel Fattah el-Sisi firmly rejected the plan, calling it an “injustice” and warning of potential unrest, while Jordan’s King Abdullah also dismissed it as a threat to national security.
The proposal, widely seen as a form of ethnic cleansing, has been met with skepticism from analysts who argue it is unlikely to materialize due to geopolitical realities. European nations, including France, Germany and Spain, have also condemned the plan, emphasizing the destabilizing effect it could have on the region and European interests, particularly regarding migration. Meanwhile, Israeli Finance Minister Bezalel Smotrich welcomed Trump’s remarks, suggesting they align with Israel’s broader efforts to depopulate Gaza.
The plan has also raised concerns that Trump may attempt to pressure Egypt and Jordan using US military aid. However, both countries have historically resisted any policies that would lead to further Palestinian displacement, seeing it as an existential issue. Experts warn that such rhetoric could inadvertently strengthen Hamas by reinforcing its image as the defender of Palestinian rights, particularly as the Palestinian Authority remains weak and Israeli settlement expansion continues in the West Bank.
Despite the overwhelming rejection of his proposal, Trump has continued to push the idea, claiming he had spoken with President el-Sisi about it—though no official confirmation of such discussions has been released. As the fragile ceasefire holds in Gaza, hundreds of thousands of displaced Palestinians are returning to the north, determined to rebuild their lives. Analysts argue that any long-term solution must focus on reconstruction, political stability and a permanent ceasefire rather than forced displacement.
Plus, all the stories that are catching our attention wherever we live in the world. Feel free to join us and add your voice to the conversation.