China’s DeepSeek AI triggers tech sell-off
en
January 28, 2025
TLDR: US tech stocks fall amid AI competition fears from Chinese startup DeepSeek; Latin American leaders to hold emergency summit on Trump's mass deportations; Starbucks tightens access to stores. Podcast produced by Niamh Rowe, Fiona Symon et al.

In this episode of the FT News Briefing, released on January 28, significant market shifts were discussed following the emergence of China's DeepSeek AI technology. This development raised concerns about the durability of the United States' stance in the global AI landscape while delving into other timely issues including Latin American leadership responses to U.S. immigration policies and changes in Starbucks operations.
Key Developments in AI: DeepSeek's Disruption
Overview of DeepSeek's Latest AI Model
- Market Impact: U.S. tech stocks saw a sharp decline, particularly in the semiconductor sector, where shares plummeted by nearly 17%, leading to a staggering $600 billion loss in market value.
- DeepSeek's Achievement: This Chinese startup unveiled an AI model that operates efficiently with fewer NVIDIA chips compared to its American counterparts, igniting worries among investors about the U.S.'s continuing lead in the AI race.
- Significance of DeepSeek's Research: The release of their models represents a groundbreaking moment for AI, as they demonstrated the ability to achieve competitive results similar to OpenAI and Meta’s models using fewer resources.
Expert Insights
- Eleanor Olcott, FT's China technology correspondent, noted that this moment was significant as it could signify a shift in the competitive dynamics of AI development. The advancements include models capable of self-learning, often viewed as a crucial step toward achieving Artificial General Intelligence (AGI).
- The potential risk for the U.S. seems to be tied to the upcoming release of new NVIDIA products that could narrow the gap even further.
Latin America’s Response to U.S. Immigration Policy
Emergency Summit
- Context: In light of President Donald Trump's mass deportations of migrants, Latin American leaders are convening for an emergency summit to strategize a coherent response.
- Diplomatic Tensions: The episode recorded a tense exchange on social media between Trump and Colombian President Gustavo Petro, emphasizing the complexities of diplomacy under current U.S. policies.
Starbucks Adapts to Market Changes
Business Strategy Changes
- Starbucks’ New Policies: Amid declining sales figures, Starbucks is reintroducing features aimed at transforming its stores back into vibrant community hubs. Changes include:
- The return of ceramic mugs to enhance customer experience,
- Implementation of a strict code of conduct prohibiting non-paying customers from loitering.
Financial Outlook
- Customer Engagement: The changes aim to attract more paying customers in a climate where Starbucks has seen a 5% dip in same-store sales reported in the recent quarter.
- Community Focus: New CEO Brian Nickel wants to restore the notion of Starbucks as a welcoming coffee house, navigating the tension between maintaining business viability and addressing customer complaints, especially from potentially marginalized groups needing shelter.
Concerns & Expectations
- Pushback: There are concerns from both community advocates and union representatives regarding the enforcement of the new policies and the potential alienation of certain customer groups.
- The ultimate impact of these changes on Starbucks' financial health is unclear and will need ongoing observation as the company seeks to adapt to evolving consumer behaviors.
Conclusion
This episode underscores the ripple effects of advancements in AI technology, the political responses to immigration challenges, and how major corporations like Starbucks are evolving their business models to adapt to shifting market conditions. As the international focus sharpens on both technological and social strategies, the outcomes of these issues will likely play a pivotal role in shaping future trends in both the tech industry and socio-economic environments.
Listeners are encouraged to continue following these discussions to stay informed on how these dynamics evolve and impact global markets.
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