Headlines this week - Jan 26, 2025
A look at how capital is being deployed across future opportunities
This week in the future:
Trump launched Project Stargate, a plan to invest $500bn in the next 4 years ($100bn already committed) to build AI infrastructure (data centers), together with OpenAI (without Microsoft), Oracle and SoftBank. “Data-center dominion” is now viewed a geo-strategic priority for nations. Still… could all this be made less relevant by innovative technologies? (please see next point)
China’s DeepSeek, an AI startup, released (and open sourced) R1, a model that matches OpenAI o1’s performance, with a much smaller size (and at a much lower cost). It is based on innovations probably triggered by US chip export restrictions. Some people see the release as a “Sputnik moment” for the American AI industry. Others view it as the first step in the commoditization of large AI models, and (potentially) a way to make giant data centers (and Project Stargate) irrelevant.
Beyond AI, China is surprising the world with progress in Nuclear Fusion and Autonomous Car technologies:
China’s flagship Nuclear Fusion project (EAST, aka “Artificial Sun”) has set a new world record by sustaining plasma confinement for more than 15 min
WeRide, a Chinese robotaxi company startup, has plans to expand globally, with initial focus on Japan, Europe, and Middle East. Other Chinese autonomous vehicle startups are looking for funding in the West
OpenAI launched its first AI Agent, “Operator”, initially available as a “research preview”, only for some users.
DeepMind’s biotech spinoff, Isomorphic Labs, revealed plans to release an AI-designed drug for trials by the end of this year, according to comments by Demis Hassabis (the company’s leader, and now a Nobel Prize winner, too)
Retro Biosciences, a startup, announced plans to raise $1bn for their project to expand lifespan by 1 decade. The company, where Sam Altman is a seed investor, is using an AI model to improve a process in which a set of proteins, added to human skin cells, morph them into stem cells.
“Bio-hybrid” brain-computer interfaces were discussed as a promising alternative for high-speed exchange of data with human brains. Science Corp, a startup, is using lab-grown neurons to augment brain function (with some advantages vs. other, more invasive approaches, e.g.: Neuralink’s). The devices are expected to work as gateways to read and write information in human brains.
A German AI researcher published his vision of robots as a big strategic opportunity for Germany (and Europe) to lead the world in a general purpose technology. He believes that the traditional German strength in (hardware) manufacturing processes could be an advantage with robots.
In his inauguration, Trump launched a bullish message on fossil fuels, but investors are skeptical that the revival can be as intense as the President seems to expect, because the numbers don’t seem to add up (at current market prices).
Trump also mentioned his ambition to have the American flag in Mars’ surface, but he didn’t specify any timings. Most probably, this won’t happen in the next 4 years. A NASA project for a space station orbiting the Moon, considered an intermediate step, won’t deliver before 2027.
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1 - Population & natural resources
Biotech
VC investors becoming more optimistic about the biotech industry, with startup acquisitions by pharma companies having reactivated recently, and in spite of remaining uncertainties (e.g. concerns for inflation). Biotech Venture Investors Optimistic, but Uncertainties Persist
Opportunities abound, driven by AI. In this interview with the FT, Demis Hassabis, co-founder and CEO of DeepMind, and now a Nobel Prize too, talks about AI in general, but also about his company’s work in biochemistry models. AI and the potential for a revolution in healthcare
DeepMind expects an AI-designed drug to be in trials by the end of this year. This was the “scoop” of the interview with Hassabis, when he talked about specific plans at Isomorphic Labs, a DeepMind spin-off. AI-developed drug will be in trials by year-end, says Google’s Hassabis
Longevity
AI is also the engine of efforts to increase human longevity.
Retro Biosciences, a startup, is raising $1bn for a project to expand lifespan by 1 decade. Sam Altman from OpenAI provided the initial $180m seed capital. Sam Altman-backed Retro Biosciences to raise $1bn for project to extend human life
The company is using an AI model by OpenAI to improve a process in which Yamanaka factors, a set of proteins, are added to human skin cells, and morph them into young-seeming stem cells. OpenAI has created an AI model for longevity science
Healthcare
The founder of Spotify wants to create “the Apple of healthcare”. His startup, Neko Health, is deploying “next-generation clinics” in Sweden and the UK, where people can have health check-ups in spa-like environments. Daniel Ek’s Neko raises $260mn in push to be ‘Apple’ of healthcare
Space
Ambitious space projects are on the way, partly pushed by the new Trump administration:
Trump mentioned a mission to Mars in his first speech. But he was not very specific about the details (does this mean actually landing people on Mars?) or even the timing (not very probable in the next 4 years). What Trump’s Pledge to Plant the U.S. Flag on Mars Really Means
NASA is planning for a new space station (Gateway) orbiting the Moon. It will be the first place where humans will live long-term in deep space, and NASA views it as step on the way to Mars. First pieces will be launched in 2027. Gateway: The 21st-Century Moonshot Mission
The Trump narrative is creating a favorable climate for raising money. Voyager Technologies, a startup that is building components for NASA’s Gateway space station, just filed for an IPO. The expected valuation is between $2bn and $3bn. Exclusive | Defense and Space Company Voyager Technologies Files to Go Public
Materials
The global supply of nickel (a critical element for EV batteries) could be reduced. Indonesia, the largest global provider, is worried about low prices (-40% in the last two years, partly driven by lower than expected demand for electric cars). Indonesia eyes nickel production cuts to support price of ‘unloved’ metal
2 - Efficiency & Productivity
Energy
Nuclear
Will China win the battle for Nuclear Fusion Energy? The flagship Chinese magnetic confinement reactor (EAST, aka “Artificial Sun”) has set a new world record by sustaining high-confinement plasma operation for 1,066 seconds. Chinese ‘artificial sun’ sets milestone record toward fusion power generation
Renewables
Trump is (drastically) stopping US public investment in renewables. More than $300bn of potential federal infrastructure funding are at risk, including loans and grants to “clean energy” developers. Trump halts more than $300bn in US green infrastructure funding
In India, competition for land is slowing down solar energy projects. E.g.: Tata Power’s deployment to support a steel factory is facing strong resistance from local farmers. Indian government’s green energy ambitions could be at risk. The fight over land holding back India’s green energy revolution
In the meantime, startups keep working on innovative “clean energy” ideas:
Koloma, a startup, has raised $350m to do geologic hydrogen exploration. An enormous amount of hydrogen (around 1trn tons) is estimated to rest in underground deposits, and this gas can be used as a “green” fuel. Why the next energy race is for underground hydrogen
Borobotics, a Swiss startup, is using robots to make geothermal a viable energy source. They have developed an autonomous drilling machine that can work in homes’ backyards, at depths of around 250m, to build geothermal heat pumps. This robot worm digs for geothermal energy in your backyard
Fossil Fuels
At Davos, Trump confirmed his plans to reaccelerate investment in fossil fuels. He said coal was a “great backup”, because “nothing can destroy it”, and the stocks of coal companies reacted positively. Trump’s Coal Comments to Davos Audience Boost US Miners
However, it is not clear that investors are going to support the vision (at least in the case of oil):
Investment funds don’t see a clear case to invest in oil drilling companies, given the current pressure on oil prices, seen as “a bigger signal than politics”. Wall Street will stymie Donald Trump’s US oil surge plan, shale bosses say
Trump’s focus on “cutting red tape” for new drills won’t be enough, if prices don’t go up (so costs of shale oil production can be covered). A shale boom is not Donald Trump’s gift to give
The current slowdown of oil demand in China will not help. We already talked about this in previous weeks. China is still a big customer, and if they reduce demand, this will affect prices… When peak Chinese oil demand meets ‘drill, baby, drill’
The IPO fiasco of Venture Global (a natural gas specialist) confirms that the “Trump effect” is not enough:
The valuation is about half of the initially expected. It was downsized from $110bn to $60bn just before the IPO, after pushback from investors. And then the stock fell an additional -5% in its first day of trading. The IPO timing suggests an initial plan to capitalize on a “fossil fuel wave” that Trump would drive. But it has not worked that way. Venture Global slides in Wall Street debut after pitching lofty valuation
Analysts see the final value as “more than reasonable”. Even if the company has some competitive advantages, it also has some repetitional risks, with some long-term customers unhappy about its commercial practices. Even Trump Couldn’t Save This Energy IPO
New Transport Technologies
Electric Vehicles
In the EU, alternative solutions to “full” protectionism against Chinese EV vendors are being explored:
German car vendors are aligned with this. The CEO of Mercedes suggests to replicate a traditional Chinese policy, by asking Chinese vendors to deploy local EU factories if they want to sell in the region. Raw import restriction would create risks of a Chinese retaliation that would hurt German manufacturers. EU should welcome Chinese car factories, says Mercedes chief
Another alternative are “biased” demand subsidies. The European Commission is considering a pan-European incentive program which would (somehow, not yet clear how) benefit European vendors. EU plans subsidy for electric vehicle sales to counter China
Autonomous Cars
China emerging as a global power in autonomous vehicles:
A Chinese company wants to be a global leader in robotaxis. WeRide, a Chinese company already operating autonomous taxi fleets in 30 cities across 9 countries, has plans to expand in Japan, Europe, and Middle East. China’s WeRide Wants to Build Global Robotaxi Empire
Chinese self-driving startups look for Western money to accelerate. Inceptio, a Chinese developer of technology for autonomous heavy-duty trucks, would be planning for an IPO in the US, looking to raise up to $200m. Chinese Autonomous-Driving Firm Inceptio Is Said to Weigh US IPO
Artificial Intelligence
AI: Apps
Agents
OpenAI just released its first AI agent, “Operator”. Initially it is available as a “research preview”, only for some users. It can browse the internet with its own browser and can automate tasks like buying groceries and filing expense reports. OpenAI’s ‘Operator’ Agent Can Buy Groceries, File Expense Reports
Expectations are high on these AI agents. The week started with Axios claiming that “a PhD-level AI breakthrough” linked to “super-agents” was expected in the coming weeks. As a consequence we would have to prepare for “a full replacement of human workers”. Behind the Curtain: Ph.D.-level AI breakthrough expected very soon
B2C
Friend’s AI “companion pendant” is delayed. The company behind the “virtual friend” wearable device that was presented last year with a slightly creepy video will not deliver on its promise to start shipping in 1Q2025, because they are still doing “design refinements”. This has always looked a bit fake, so let’s see what happens. Friend delays shipments of its AI companion pendant
B2B
Military applications: the dark side of AI. OpenAI and Anthropic are already selling AI applications to the Pentagon. For now, the objective is to identify, track and assess threats. But concerns are growing on potential AI systems able to also kill people. The Pentagon says AI is speeding up its 'kill chain'
AI: Robots
“Physical AI” promises to automate preventive healthcare. Singapore is planning to use humanoid robots to address the country’s deficit of qualified nurses, amid an increasing healthcare demand, due to a rapidly aging population. Singapore is turning to AI to care for its rapidly aging population
AI: Foundational Models
DeepSeek shows the AI world that China could be catching up.
DeepSeek, a startup, has open-sourced R1, a model that matches OpenAI o1’s performance, with a much smaller size. The consensus is that this shows how chip export controls have actually created incentives for China to innovate and improve models’ performance in different ways. Open-source DeepSeek-R1 uses pure reinforcement learning to match OpenAI o1 — at 95% less cost
DeepSeek’s models use only a fraction of the chips that US leading AI companies rely on to train their systems. As a result, the models are much cheaper to train (e.g. 10 times less than Meta’s most advanced Llama model). How Chinese A.I. Start-Up DeepSeek Is Competing With OpenAI and Google
DeepSeek is not alone. Other Chinese tech companies, like Alibaba, Tencent, ByteDance, Moonshot and 01.ai may also be reducing the gap vs. US giants. Chinese start-ups such as DeepSeek are challenging global AI giants
This is already being viewed as a “Sputnik moment” for the American AI industry. steve hsu (@hsu_steve) on X
Gary Marcus (a famous contrarian) sees DeepSeek’s low cost model as a threat to OpenAI’s valuation. Gary Marcus (@GaryMarcus) on X
And Meta is claimed to be in “panic mode”, after a rival open-sourced model is performing better at a much lower cost. Bearly AI (@bearlyai) on X
“Thinking models” could sustain progress, but they change the economics of the internet. Better results in models like OpenAI’s o3 rely in more computing at the inference level, which leads to a higher cost per query. As a result, a key attribute of the previous years of the “digital age” (zero-marginal cost) would now be being left behind. OpenAI’s latest model will change the economics of software
Thinking models are a hot research topic, and they are improving fast. A new paper by Google DeepMind engineers presents a method to make models think “deeper” . The new approach, “Mind Evolution”, uses a language model to generate, recombine and refine candidate responses. Paper page - Evolving Deeper LLM Thinking
Anthropic’s CEO expects the “singularity” after 2027. In an interview at Davos, D Amodei said that the timing of the event when AI models become better than humans “at almost everything” will plausibly be later than 2027. Anthropic chief says AI could surpass “almost all humans at almost everything” shortly after 2027
Google is hedging its bets. At the same time as they keep developing their own models (see below), Google is also expanding its stake (+$1bn) in Anthropic (officially a rival), which is now valued at $60bn. Google invests further $1bn in OpenAI rival Anthropic
Google has also released a model that helps them show their strength. The new Gemini 2.0 Flash Thinking model is able to process 5x more tokens than OpenAI’s o1 Pro, and has faster response times. It’s using an expanded context window allows the model to analyze multiple research papers or extensive datasets simultaneously. Google releases free Gemini 2.0 Flash Thinking model, pressuring OpenAI’s premium strategy
In other news:
Mistral (the leading European AI startup) says they’re not for sale. Some people have reacted to this claiming that this might actually be a sign of the opposite (as shown by many examples in the history of corporate moves). French AI Champion Mistral Isn’t for Sale, CEO Mensch Says
Ex-Open AI Mira Murati’s has a new AI startup. The company is focused on developing “Artificial General Intelligence”, but not much else is known. She’s been hiring people from both OpenAI and Google DeepMind. Mira Murati’s AI Startup Makes First Hires, Including Former OpenAI Executive
AI: Safety
Has Elon Musk changed his mind, regarding AI risks? Parmy Olson at Bloomberg believes that the guy’s silence on the reversal of US guidelines for building safer artificial intelligence shows that his priorities are his own business interests. Elon Musk’s Silence on AI Risks Is Deafening
Can community notes keep Meta’s users safe? After the company’s decision to remove content reviewers, concerns remain on the effectiveness community notes (supposed to be similar to X’s) to reduce misinformation in the platforms. Facebook Without Fact-Checkers Will Put Truth to the Test
AI: Infrastructure
Trump announced a huge ($500bn over 4 years) investment in AI infrastructure (“Stargate Project”):
OpenAI’s Sam Altman looks like the winner here. He was with Trump at the announcement event, and OpenAI is the leader of the consortium that will exploit the assets. Oracle and SoftBank are the other two key partners. Tech Leaders Pledge up to $500 Billion in AI Investment in U.S.
Officially, “data-center dominion” is now a geo-strategic priority for nations. The FT’s Lex Column supports this, and talks about an “arms race”, in which OpenAI would be “building a weapon”… Supercomputers: the new superpower status symbol
Interestingly, Microsoft was absent from the deal. This follows months of tensions between them an OpenAI, according to some sources, and could be the start of a new relationship, in which Microsoft has much less influence. OpenAI’s Stargate Deal Heralds Shift Away From Microsoft
This is also viewed as a big win for Oracle. They have been fighting to catch up with the 3 giants of cloud computing (Amazon, Microsoft and Google), and this deal positions them as a leading player, in maybe the hottest game for the cloud industry right now. They might have leveraged their efficient data center designs to achieve this. How Oracle Plays Cheaply in AI
Elon Musk (part of the Trump team) is not happy. He’s currently an enemy of Sam Altman (even in the legal space), and the owner of a rival AI company (xAI). He’s also been tweeting his unhappiness these days. Musk Pours Cold Water on Trump-Backed Stargate AI Project
Meta has reacted with its own announcement. They have given a CapEx forecast of $60bn to $65bn for 2025 (+70% vs. 2024), that will be partly dedicated to build a massive (2GW) AI data center in Louisiana. The stock price keeps rising. Meta Spending to Soar on AI, Massive Data Center
Trump is positioning as a “kingmaker” amid all this competition, and the uncertainties about what will be the final scenario (most tech giants in direct rivalry, plus potential startups emerging) will benefit him in the short term. Trump is becoming the technoking of America
The first Stargate data center is already being built in Texas. It will occupy a space roughly the size of Central Park (NY), with a total budget of $100bn. Over 1,000 construction workers are already on the site. Trump’s First AI Data Center Is Size of Central Park, With 57 Jobs to Start
VMware wants to be Europe’s cloud infrastructure partner. Broadcom views its VMware asset as the alternative for those who do not want to hand over all their data to US cloud providers, especially in Europe. Looks like a rationale bet, given the strategic importance that AI data centers are gaining. Broadcom chief eyes AI opportunity after confronting VMware backlash
Will we see a data center on the Moon? The idea of space-based data centers (which could leverage abundant solar energy and cost-effective cooling systems) is gaining traction as an alternative to reduce the energy expenses of infrastructure on Earth. Lonestar's moonshot: Firm aims to place data center on lunar surface
AI: Chips
China is growing fast in AI, in spite of US commercial restrictions. ByteDance, the owner of TikTok, is planning to spend $12bn of CapEx in AI chips this year (2x vs. last year). 60% will be spent with Chinese vendors (including Huawei), with the mix shifting from Nvidia to local companies as a result of US export control. TikTok owner ByteDance plans to spend $12bn on AI chips in 2025
Huawei wants to be the leading AI chip vendor in China. They are initially focusing on inference chips, which they see as a big opportunity as AI commercial applications of AI. Nvidia argues that you can recycle training chips for that. Huawei seeks to grab market share in AI chips from Nvidia in China
SK Hynix reports a record quarterly profit, driven by high demand from Nvidia. The Korean vendor makes high-end memory chips for the leading AI semiconductor company. Nvidia Supplier SK Hynix Posts Record Profit on AI Boom
Intelligence Augmentation
Augmented Reality
What is Google planning in AR? This is not clear at all in a company of this size, but they just announced the acquisition of HTC’s XR business for $250m. Yes, it’s a tiny figure for Google… Google buys part of HTC's XR business for $250M
Brain-Computer Interfaces
“Bio-hybrid” brain-computer interfaces emerge as a promising alternative. Science Corp, a startup, is using lab-grown neurons to augment brain function through the ability to read and write information in the brain, from outside. The company’s claim is that this approach is less damaging to the brain and more general-purpose (e.g.: vs. Neuralink). Science Corp. Aims to Plant Ideas in Brains with New Device
3 - Economic / Business trends
Tech & Geopolitics
Are robots an opportunity for Germany (and the rest of Europe)? This German (and not very humble) AI expert argues (in a long tweet) that they indeed are. The idea is that Germany won’t be able to catch up in “digital” AI, but that it has the right resources and skills to win the race to build intelligent robots. Jürgen Schmidhuber (@SchmidhuberAI) on X
While Trump wants to revive fossil fuels, the Gulf states want to diversify into tech. The Emirates want to lead the world in AI, while Saudi Arabia is interested in robotics (see above about Europe, too). For now, efforts are focused on (1) AI models, (2) infrastructure (including projects to build data centers in other regions), and (3) chip manufacturing. Can the Gulf states become tech superpowers?
The EU wants to re-negotiate some chip export restrictions with Trump. The latest regulations from Biden place Poland and other East EU countries in a second-tier group, and now the EU expects Trump to change that (not clear he will…) EU to Raise Biden’s AI Chip Curbs with Trump Administration