News of the Cyber World

[kyonides]

AI

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Nvidia loses nearly $600 billion in market value after Chinese AI startup bursts onto scene

Shares of chipmaker Nvidia plunged Monday, for its worst day since the global market sell-off in March 2020 triggered by the coronavirus pandemic.

The plunge came amid a global tech stock sell-off over fears about America's leadership in the AI sector. Those fears were largely sparked by advances claimed by a Chinese artificial intelligence startup.

Shares of the chipmaker, one of the primary beneficiaries of the artificial intelligence boom in tech stocks, plummeted as much as 18%. That pushed Nvidia's market value below $3 trillion. Still, shares of the firm are up more than 480% over the last two years.

The drop accounted for nearly $600 billion in lost market value though. It is the biggest market value drop in U.S. stock market history, according to Bloomberg. And nearly double the second worst drop in history, also seen by Nvidia shareholders in September 2024, when the company shed $279 billion in value.

For some perspective, the amount of market value lost by Nvidia on Monday is more than the entire market value of Exxon Mobil, Costco, Home Depot or Bank of America.

Nvidia said in a statement Monday that advances by DeepSeek, a Chinese AI company whose latest large language model has taken Silicon Valley by storm, were an example of what is possible, “leveraging widely available models and compute that is fully export control compliant.”

The company added that the surge in interest in DeepSeek, which topped the Apple app store on Monday, could create more demand for its graphics processing units, or GPUs.

“Inference requires significant numbers of NVIDIA GPUs and high-performance networking,” it said.

Due to the AI-fueled surge in mega-cap tech stocks, Nvidia catapulted into the top five most valuable companies in the world in 2023. The surge didn't stop there, with the company soaring past Alphabet, Microsoft and the most valuable company in the world: Apple. At its most recent peak, Nvidia reached a towering $3.7 trillion.

With Monday's losses, Apple has retaken the title of world's most valuable company and Nvidia's value sank to around $2.9 trillion.

Nvidia's drop was also a drag on the Dow Jones Industrial Average, which finished the day higher but began the day in the red. Nvidia joined the prestigious 30-stock index in November, replacing rival chipmaker Intel. The Nasdaq Composite, which more closely tracks publicly traded tech companies, slid around 3%.

The global sell-off in tech stocks also meant the S&P Technology sector fell into the red for the year so far, the only sector lower over that time.

OpenAI has evidence that its models helped train China’s DeepSeek

Chinese artificial intelligence company DeepSeek disrupted Silicon Valley with the release of cheaply developed AI models that compete with flagship offerings from OpenAI — but the ChatGPT maker suspects they were built upon OpenAI data.

OpenAI and Microsoft are investigating whether the Chinese rival used OpenAI’s API to integrate OpenAI’s AI models into DeepSeek’s own models, according to Bloomberg. The outlet’s sources said Microsoft security researchers detected that large amounts of data were being exfiltrated through OpenAI developer accounts in late 2024, which the company believes are affiliated with DeepSeek.

OpenAI told the Financial Times that it found evidence linking DeepSeek to the use of distillation — a common technique developers use to train AI models by extracting data from larger, more capable ones. It’s an efficient way to train smaller models at a fraction of the more than $100 million that OpenAI spent to train GPT-4. While developers can use OpenAI’s API to integrate its AI with their own applications, distilling the outputs to build rival models is a violation of OpenAI’s terms of service. OpenAI has not provided details of the evidence it found.

The situation is rich with irony. After all, it was OpenAI that made huge leaps with its GPT model by sucking down the entirety of the written web without consent.

President Donald Trump’s artificial intelligence czar David Sacks said “it is possible” that IP theft had occurred. “There’s substantial evidence that what DeepSeek did here is they distilled knowledge out of OpenAI models and I don’t think OpenAI is very happy about this,” Sacks told Fox News on Tuesday.

“We know PRC (China) based companies — and others — are constantly trying to distill the models of leading US AI companies,” OpenAI said in a statement to Bloomberg. “As the leading builder of AI, we engage in countermeasures to protect our IP, including a careful process for which frontier capabilities to include in released models, and believe as we go forward that it is critically important that we are working closely with the US government to best protect the most capable models from efforts by adversaries and competitors to take US technology.”

Microsoft’s AI business is booming — Xbox, not so much

Microsoft’s cloud and AI businesses are doing pretty well — and their impact is being felt across the company. In its Q2 2025 earnings, Microsoft announced revenue of $69.6 billion for the quarter, up 12 percent year-over-year, and net income of $24.1 billion, which is up 10 percent year-over-year.

As for the AI business, CEO Satya Nadella says in a statement that it has “surpassed an annual revenue run rate of $13 billion, up 175 percent year-over-year.” The company’s Azure and other cloud services business grew 31 percent year-over-year, a slight decrease from 33 percent YoY growth the previous quarter.

The company’s gaming revenues didn’t fare so well. Gaming revenue declined 7 percent, and Xbox hardware revenue declined 29 percent. Microsoft has been moving away from a focus on its own hardware with messaging like its “This is an Xbox” ad campaign and bringing Xbox Game Studios games to other platforms, and those changes could be contributing to the decline.

That means the focus is instead on games and services, and that’s where the business is seeing some improvements. Xbox content and services revenue were up 2 percent, “driven by growth in Xbox Game Pass,” Microsoft says. (Last quarter, Microsoft’s software gaming revenues were way up even as Xbox hardware revenue declined.)

During Wednesday’s earnings call, Nadella said that Game Pass “set a new quarterly revenue record” and noted that Xbox Cloud Gaming saw a “record 140 million hours streamed” during the quarter. Nadella also revealed that Indiana Jones and the Great Circle has “already been played by more than 4 million people.”

In its press release, Microsoft said that it saw Windows OEM and Devices revenue growth of 4 percent year-over-year, a slight bump from 2 percent in Q1.

On the earnings call, Microsoft CFO Amy Hood said that Windows OEM and devices should decline low to mid single digits in Q3 2025. Overall gaming revenue is expected to grow in single digits, with Xbox content and services expected to grow low to mid single digits. Xbox hardware revenue “will decline year over year.”

During the call, Nadella also reiterated that the company remains “very happy with the partnership with OpenAI” (the two companies announced last week that they are adjusting their partnership) and acknowledged that DeepSeek had some “real innovations.”

Microsoft makes DeepSeek’s R1 model available on Azure AI and GitHub

Microsoft is bringing Chinese AI company DeepSeek’s R1 model to its Azure AI Foundry platform and GitHub today. The R1 model, which has rocked US financial markets this week because it can be trained at a fraction of the cost of leading models from OpenAI, is now part of a model catalog on Azure AI Foundry and GitHub — allowing Microsoft’s customers to integrate it into their AI applications.

“One of the key advantages of using DeepSeek R1 or any other model on Azure AI Foundry is the speed at which developers can experiment, iterate, and integrate AI into their workflows,” says By Asha Sharma, Microsoft’s corporate vice president of AI platform. “DeepSeek R1 has undergone rigorous red teaming and safety evaluations, including automated assessments of model behavior and extensive security reviews to mitigate potential risks.”

R1 was initially released as an open source model earlier this month, and Microsoft has moved at surprising pace to integrate this into Azure AI Foundry. The software maker will also make a distilled, smaller version of R1 available to run locally on Copilot Plus PCs soon, and it’s possible we may even see R1 show up in other AI-powered services from Microsoft.

DeepSeek’s R1 model has surprised Wall Street this week because it doesn’t need to use as many chips from providers like Nvidia, and it’s far cheaper to train. That’s put a huge dent in Nvidia’s market valuation, which dipped by nearly $600 billion at one point after investors were spooked by DeepSeek’s progress and the popularity of its mobile app.

OpenAI and Microsoft are now reportedly investigating whether the Chinese rival used OpenAI’s API to train DeepSeek’s models. Bloomberg reported earlier this week that Microsoft’s security researchers detected large amounts of data being used through OpenAI developer accounts late last year, which may have been connected to DeepSeek.

Mark Zuckerberg says Meta isn’t worried about DeepSeek

Nearly everyone seems to be suddenly freaking out about the rise of DeepSeek. Meta isn’t worried, though.

That was CEO Mark Zuckerberg’s message to investors during his company’s fourth-quarter earnings call on Wednesday. During the Q&A portion of the call with Wall Street analysts, Zuckerberg fielded multiple questions about DeepSeek’s impressive AI models and what the implications are for Meta’s AI strategy. He said that what DeepSeek was able to accomplish with relatively little money has “only strengthened our conviction that this is the right thing to be focused on.”

Zuckerberg noted that “there’s a number of novel things they did we’re still digesting” and that Meta plans to implement DeepSeek’s “advancements” into Llama. DeepSeek caused a massive sell-off in AI stocks due to fears that models will no longer need as much computing power. Zuckerberg tried to dispel concerns that the billions of dollars he’s spending on GPUs will go to waste: “I continue to think that investing very heavily in CapEx and infra is going to be a strategic advantage over time.”

His argument is in line with the growing consensus that computing resources will move from the training phase of AI development towards helping models better “reason.” In Zuckerberg’s own words, this “doesn’t mean you need less compute” because you can “apply more compute at inference time in order to generate a higher level of intelligence and a higher quality of service.” Meta is gearing up to release Llama 4 with multimodal and “agentic” capabilities in the coming months, according to Zuckerberg. He expects Meta’s AI assistant to reach one billion users this year.

He also took a thinly veiled jab at OpenAI, Anthropic, and other unprofitable startups by noting that Meta has a “strong business model” to support the roughly $60 billion it will spend on AI this year versus “others who don’t necessarily have business models to support it on a sustainable basis.”

Zuckerberg also made sure to praise President Donald Trump. “We now have a US administration that is proud of our leading companies, prioritizes American technology winning,” and “will defend our values and interests abroad,” he said. Moments before the earnings call started, news broke that Meta is paying Trump $25 million to settle a lawsuit he brought against the company for banning his account after the January 6th insurrection. (The vast majority of the money is going to pay for Trump’s presidential library.)

Meanwhile, Meta is a cash-printing machine. Revenue for the fourth quarter of 2024 was $48.39 billion — a 22-percent increase from the year-ago period — while net profit was a staggering $20.8 billion (up 43-percent from a year before). During the earnings call, CFO Susan Li said that Meta hasn’t “seen any noticeable impact” from its content policy changes on ad spending. 3.35 billion people used at least one of Meta’s apps daily in the fourth quarter — a 5-percent increase from the year-ago period.

SOCIAL MEDIA

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Meta agrees to pay $25 million to settle Trump account suspension suit

Meta agreed to a $25 million settlement over a 2021 lawsuit President Donald Trump brought against Meta for suspending his accounts after the January 6th insurrection at the US Capitol. The Wall Street Journal was the first to report the news, and Meta spokesperson Andy Stone confirmed the settlement to The Verge.

It’s a step that Trump discussed with Meta CEO Mark Zuckerberg during his recent visit to Mar-a-Lago, The Verge has independently confirmed. One unnamed source told The Journal that Trump indicated the lawsuit would need to be resolved before Zuckerberg would have a chance of being “brought into the tent.”

The White House and an advisor to Trump did not immediately provide comment.

The settlement, which would contribute $22 million toward Trump’s presidential library funds as well as legal fees, is the latest signal of Trump’s powerful influence over corporate America. Trump’s odds of success in the case did not look particularly promising, given that a judge dismissed a similar suit filed against Twitter (now X) and another against Google was administratively closed. The docket has been stagnant since 2023. But now back in the White House, Zuckerberg and many of his tech and business peers have recognized the immense influence Trump could wield over their companies and have taken a much more proactive role in engaging with his administration compared to last time.

Trump filed a class action lawsuit against Meta in 2021, seeking damages for himself and other users whose accounts were allegedly “wrongly restricted or curtailed.” Facebook had announced an indefinite suspension on Trump’s accounts after his posts during the January 6th insurrection at the US Capitol that year. At the time, Zuckerberg said, “The shocking events of the last 24 hours clearly demonstrate that President Donald Trump intends to use his remaining time in office to undermine the peaceful and lawful transition of power to his elected successor, Joe Biden.” Eventually, the company dropped restrictions on his accounts.

ABC News similarly settled a defamation lawsuit Trump brought over anchor George Stephanopoulos’ mischaracterization of the charge Trump was found liable for in the case brought by writer E. Jean Carroll. And CBS owner Paramount has also discussed settling a Trump lawsuit over the news outlet’s interview with his then-opponent Kamala Harris, understanding that his administration could make it difficult to close a merger with Skydance Media, according to the Journal.

GAMING

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Atari’s limited edition Asteroids watch tells time with orbiting spaceships

Atari has released a collection of new watches with a unique design that celebrates the 45th anniversary of Asteroids. In the original version of the game that debuted in 1979, spotting and shooting a passing UFO would earn you extra points. On the Asteroids watch, a pair of orbiting UFOs are less of a threat and are instead used to represent the hour and minute hands — no numbers needed.

Created in collaboration with watchmaker Nubeo (which previously released a collection of Space Invaders-themed timepieces) the new Asteroids collection features five styles, each with a differently colored band — nebula blue, plasma pumpkin, supernova red, nova nightfall, and celestial citrine — and varying colors for the watchface elements. They’re available through Nubeo’s website, which lists each watch’s price as being discounted to $499 from $1,650. You can also order them through Atari’s website, which just lists the price as $499 each, although some have already sold out. Each style is limited to just 125 pieces.

The watch uses a Japanese automatic movement that powers three spinning discs. The smallest features a recreation of the game’s simple triangular spaceship in the center that serves as the watch’s second hand, while two larger discs, rotating at different speeds, portray asteroids drifting through space and the UFOs that function as the hour and minute hands.

All of the graphical elements on the Asteroids watch’s face are printed with glow-in-the-dark “Swiss Super-LumiNova” pigments and are protected beneath a durable sapphire lens and a stainless steel case. The watch is water resistant with a 21 ATM (atmosphere) rating and a screw-down crown, making it durable enough for recreational diving. It comes in a protective case with an interior that borrows design elements from the Atari Video Computer System (VCS) that launched in 1977.

Comcast is rolling out ‘ultra-low lag’ tech that could fix the internet

If you use Comcast Xfinity internet, your FaceTime calls might be about to get better. Instead of bumping up the amount of data that your internet connection can send or receive at one time (usually called bandwidth or throughput), a new upgrade is coming to reduce the amount of time it takes for each packet of information to make the trip.

Comcast is officially starting to roll out the “pioneering new, ultra-low lag connectivity experience” to cities including Atlanta, Chicago, Colorado Springs, Philadelphia, Rockville (in Maryland), and San Francisco. (Disclosure: Comcast is an investor in Vox Media, The Verge’s parent company.)

The technology powering this upgrade is based on a standard called L4S, which stands for “Low Latency, Low Loss, Scalable Throughput.” My former colleague Mitchell Clark has a thorough explainer of what L4S is supposed to do, but the intention is that the tech can significantly reduce latency so that things like video games are smoother and video calls feel more like talking in real life without awkward delays and pauses.

L4S pulls this off by giving internet packets an indicator that lets them know if they’ve run into congestion or queueing along any of the hops in their trip between a user and whatever they’re connecting to. If there is a delay, then the devices can start to adjust to stop making the congestion worse — and possibly eliminate it entirely.

Destiny 2 is getting Star Wars-themed armor next month

Bungie and LucasFilms are bringing Star Wars armor sets and other items into the Destiny universe, so you can dress your Guardian like a stormtrooper. As part of Destiny 2: Heresy, Act I, which launches next week, you’ll be able to access outfits, accessories, and emotes that come straight out of the Star Wars universe into the Eververse. The news came as a “one more thing” surprise during the Destiny 2: Heresy Act I developer livestream on Twitch yesterday.

The Star Wars armor sets will include a death trooper-inspired Covert Rangers set for Hunters, a Royal Protector set for Warlocks, inspired by the red-cloaked Imperial Guards, and a classic stormtrooper Shock Enforcer set for Titans. There’s also a new Ghost shell that looks like the second Death Star. Sadly, there isn’t any mention of lightsabers in this announcement. However, Bungie does promise a new Sparrow, ship, and a finisher.

Star Wars items will launch day one with Heresy on February 2nd. Destiny has had other collaborations in the past, including ones with Fortnite, Mass Effect, Assassins Creed, The Witcher, and others. Heresy is the third episode in Destiny 2 and is the final epilogue of the Light and Darkness saga.

PlayStation is dropping its PSN account requirement for some PC games

Sony announced Wednesday that you won’t need to log in to a PlayStation Network account to play four of its single-player games on PC: Marvel’s Spider-Man 2 (which comes out tomorrow), The Last of Us Part II Remastered (which launches on April 3rd), God of War Ragnarök, and Horizon Zero Dawn Remastered.

However, to incentivize you to still sign in with a PSN account while playing those games, Sony says that it will “soon” be adding “in-game content unlocks” like outfits and resources. You can see the full list of bonuses in Sony’s blog post about the news. Sony also says that using a PSN account gives you benefits like “trophies and friend management.”

Sony’s PSN account requirement for some of its PC games hasn’t been a popular one. Backlash to the requirement for Helldivers 2 led Sony to reverse the decision after the game was review bombed on Steam.