Deepseek vs. Google: AI Race Intensifies
Markets React to Trump’s Tariff Plan and Tesla Sales Plunge Amid Musk Backlash
TECH
Deepseek vs. Google: AI Race Intensifies
Google DeepMind CEO Demis Hassabis praised China's Deepseek AI model as "probably the best work" out of China but noted it lacks new scientific advancements. Deepseek’s low-cost AI development shocked markets, triggering a tech stock sell-off and raising concerns about AI infrastructure spending.
Hassabis acknowledged Deepseek’s engineering expertise but downplayed its impact, saying it used existing AI techniques rather than introducing a breakthrough. He suggested that Google's Gemini 2.0 Flash models are more efficient than Deepseek’s.
Meanwhile, Hassabis believes Artificial General Intelligence (AGI) could emerge within five years, defining AGI as a system with human-like cognitive abilities. He urged society to prepare for its impact, balancing benefits with risks.
AGI’s risks remain a major concern, with experts like Max Tegmark and Yoshua Bengio warning of potential loss of human control. OpenAI CEO Sam Altman has also stated he is confident AGI is achievable.
ECONOMY
Markets React to Trump’s Tariff Plan
President Donald Trump announced that the U.S. will impose 25% tariffs on all steel and aluminum imports, including those from Canada and Mexico, with additional import duties expected later in the week. Speaking aboard Air Force One, Trump confirmed that aluminum would also be subject to trade penalties.
He also reaffirmed plans for “reciprocal tariffs” to target countries that impose higher duties on U.S. goods. “If they are charging us 130% and we’re charging them nothing, it’s not going to stay that way,” he said.
The announcement sent financial markets tumbling, as investors feared rising inflation and economic uncertainty. Stock prices fell after consumer sentiment surveys indicated growing concerns about the tariffs’ impact.
Trump previously delayed tariffs on Canadian and Mexican goods for 30 days but moved forward with 10% duties on Chinese imports. He also postponed tariffs on small-package imports from fast-fashion retailers Shein and Temu until customs officials finalize enforcement measures.
TECH
Tesla Sales Plunge Amid Musk Backlash
Tesla’s European sales have collapsed, with Germany seeing a 60% year-over-year decline despite a booming EV market. While some investors blame the Osborne Effect—where consumers delay purchases ahead of a product refresh—others point to Elon Musk’s divisive political stance as a growing liability for the brand.
Once a dominant force in Germany with 23% market share in early 2023, Tesla now holds just 4%, losing ground to local brands. Similar declines occurred in Norway (-38%), Sweden (-44%), and France (-63%), suggesting deeper issues beyond product refresh delays.
Musk’s support for Germany’s far-right AfD party has sparked backlash, with social media mocking Tesla as a “far-right car.” However, UK sales declined only 7.8%, where Musk’s politics are more accepted.
With European brands offering strong EV alternatives, Tesla’s reputation problem may be costing it more than market timing issues. The refreshed Model Y and upcoming entry model may be its best hope for recovery.
DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.