That crashing sound you heard was the stock market

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• DeepSeek rattles the markets: AI models from Chinese tech company DeepSeek evolved from competitive curiosity to a market-panicking force over the weekend. Shares of tech companies with extensive AI exposure — Nvidia, Microsoft, and others — lost hundreds of billions worth of collective value. Concerns that AI models could become cheaper to train and, therefore, less compute-intensive worried investors who had previously bid up companies supplying ever-larger computers built for artificial intelligence workloads.

• OpenAI faces fresh suits: While Western AI companies sort out if DeepSeek just leapfrogged them, challenges to how they sourced — and use — data to train their models remain a thorny issue. More Indian publications are joining a suit against OpenAI; there are a host of similar suits around the world, with media companies concerned that their work is being ingested sans proper compensation. Technologists mostly consider the use of copyright-protected data to train AI models covered under fair use rules.

• Startup shutdowns accelerate: More startups shut down last year than in 2023, data from a variety of providers indicate — with one seeing an over 50% increase in deaths. Seeing some 2021-era startups fall apart is not a huge shock, even if some of the shutterings have been surprisingly abrupt. A good question to ponder is whether or not we’ve seen most of the ZIRP-era excess drained from the startup market. If not, then 2025 could be set for another banner year of Slack instances sent to the great corporate graveyard in the sky.

TWiST500

Since DeepSeek walked into the AI party, kicking over the punchbowl and giving the hosts noogies for fun, much attention has been paid to the potential impact of its work on hardware providers—you know, the companies that make chips, switches, and other gear.

But there’s a lot of work upstream from those chips that is also potentially impacted. Recall that until very recently, the idea of de-mothballing nuclear power plants was becoming normal. People were curious if fusion would solve the AI power crunch. Or would it be space solar?

All that’s sci-fi babble if it turns out that the market doesn’t need as much power. Lower demands, less need for innovative solutions, right? Right.

But while how much new power might — or might not — be needed to power the next few hundred human datacenters, TechCrunch’s Tim De Chant points out that we’re still a ways out from the new generation coming online:

Who wants to bet that by then, we will need the power? I would. That’s why I am still pretty confident in our energy companies on the TWiST500, including Sila, Fervo Energy, KiteKraft, and others. In fact, I suspect that a few more will join the list. One cheaper, more efficient model doesn’t delete the fact that inference alone is still compute-intensive, right? — Alex

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This Week in Startups

E2076: Jason and Alex break down Twilio’s team size cuts and what it says about AI’s impact on jobs. They spotlight DeepSeek, a $6M AI startup punching above its weight, and then dive into the wild GameOn fraud saga that has to be heard to be believed. Plus, a look at Meta’s big data center bets, OpenAI’s new Operator feature, and the tough conversations around automation and empathy for workers.

E2075: Alex covers The Stargate Project, other hot news items, and two great interviews. Created By Humans’ Co-founder Trip Adler talks about the future of copyrights and AI. Gene Berdichevsky, Co-founder and CEO of Sila discusses the future of batteries and our clean energy future.

E2074: Jason and Alex kick off the show by discussing tech's growing role in politics, including Gen X's rising influence and the prominence of tech CEOs at major events. They cover key election factors like inflation and abortion rights, dive into COVID origins investigations, and debate immigration policy. The conversation shifts to AI regulation, crypto risks, and how the new administration might shape M&A, antitrust laws, and startups. They wrap up with insights on upcoming tech IPOs and the broader impact of tax policy changes.

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