Tech

DeepSeek is Here

Tech stocks tank with the Chinese AI companies boom.

China’s impact was felt in the marketplace when it came to the AI world. The S&P 500 dropped 1.5%, in large part because of the 17% Nvidia dip, following the announcement of DeepSeek.

However, it wasn’t just Nvidia, as other big tech stocks also took heavy losses, pulling the Nasdaq composite down 3.1% for its worst loss in more than a month.

The rest of the market held up much better, as the Dow Jones Industrial Average rose 289 points (0.7%) and the majority of U.S. stocks climbed.

DeepSeek already hit the top of the chart for free apps on Apple’s App Store by the start of this week, a feat that analysts deemed impressive, given how the U.S. government has restricted Chinese access to top AI chips.

Despite the initial shockwaves, skeptics still remain in regards to the long term impact DeepSeek could have on the AI industry and its economy.

“It remains to be seen if DeepSeek found a way to work around these chip restrictions rules and what chips they ultimately used, as there will be many skeptics around this issue, given the information is coming from China, explained Dan Ives, an analyst with Wedbush Securities. Pointing out China’s track record when it comes to transparency.

The impact wasn’t just felt in the U.S. though, as the Dutch chip making equipment company ASML slid 7%, while Japan’s Softbank Group Corp. lost 8.3%, as well.

What’s New:

😮 OpenAI says it has proof DeepSeek used its technology to develop its AI model.

🏈 NFL has been testing optical-tracking technology for first-down measurements.

Politics

Freeze!

The Trump Admin put a spending hold on basically the whole government.

President Trump’s attempted pause on federal funding has been temporarily blocked by a federal judge, following his ruling on Tuesday. Trump’s attempt to pause was to allow his administration time to conduct an across-the-board review to uproot progressive initiatives.

U.S. District Judge Loren L. AliKhan blocked the freeze with only minutes to spare before it was scheduled to take effect. This was prompted by a lawsuit brought on by nonprofit groups that receive federal money. The block only lasts until Monday afternoon, with another court hearing scheduled that morning to further discuss the issue.

While Democrats have called the president’s actions in question, administration officials have said that the decision to halt loans and grants was necessary to ensure that spending complies with Trump’s recent blitz of executive orders.

However, many, including public officials and the American public, are still trying to figure out what programs would be affected by the pause. Even temporary interruptions in funding could cause layoffs or delays in public services.

“This sort of came out of the blue,” said David Smith, a spokesperson for the Shawnee Mission School District in Kansas, one of the many districts that receive federal funding. Smith is still trying to decipher all of this, “based on zero information” provided.

Just minutes after AliKhan made her ruling, Democratic attorneys general from 22 states and the District of Columbia filed their own lawsuit seeking to permanently prevent the administration from cutting off federal funding.

From The Hill:

🙃 RFK Jr.’s confirmation battle has turned politics upside down.

🥶 Funding freeze sparks Democratic uproar as party grapples with how to take on Trump.

Business

Target Out On DEI

The Twin Cities is letting them know how they feel about it.

Twin Cities Pride has reached its breaking point, as it excludes Target from its annual festival and parade following the retailer’s decision to scale back diversity initiatives, like many other companies in recent months.

For years, Target has been a visible and generous supporter of Pride events in Minneapolis and around the country. The company has donated $50-70k each year to Twin Cities Pride and was expected to be a sponsor once again this year.

However, Andi Otto, Twin Cities Pride Executive Director, said in an interview this week that Target’s decision to curtail DEI programming was “the breaking point” that pushed them to (temporarily) cut ties with the Minneapolis-based corporation.

Target executives have “always been supportive of hearing me out and the impact that their choices have made on the community,” Otto continued. “But unfortunately, in a time where it’s been a really, really rough week for our community, given everything that has come down from the new administration, this was kind of the straw that broke the camel’s back.”

Target had said that it remains committed to an inclusive workplace, but will conclude its three-year DEI goals and Racial Equity Action and Change initiatives that it committed to following the death of George Floyd in 2020. Of course this also hits closer to home, as Floyd was killed in Minneapolis, Minnesota.

Target will also stop participating in outside surveys regarding diversity and inclusion, including the Human Rights Campaign’s efforts.

“I was absolutely shocked,” Otto said.

Target had been a sponsor of the festival and parade for the last 18 years, serving as the second largest donor, only behind Delta Air Lines. Otto said that Target’s donations have helped them pay entertainers and lower costs for LGBTQ people and people of color who run festival booths. Losing that financial support could affect this year’s festivities, which are scheduled for June 28-29.

DeepSeek’s Explosion Onto the Scene

From Stock App to AI Darling.

The latest in the AI world includes a Chinese disruptor flipping “the industry on its head.” China has begun a startup, to rival ChatGPT, titled “DeepSeek,” that has startled the tech gurus, stunned investors and stupefied geopolitical commentators.

Venture capitalist Marc Andreessen referred to it as a “Sputnik moment,” in the AI world.

The idea, previously, was that AI would require more and more computing power to advance the industry. Companies were poised to line up in droves to buy Nvidia’s latest chips, while others (like Nvidia), required these huge sprawling data centers to house their operations. Or so we thought.

DeepSeek is serving as a disruptor, as it’s claiming to need less data and a fraction of the cost, to do what the already established companies are doing. Skepticism still lingers over such claims.

However, Nvidia did lose about 17% (close to $593 billion in market value) on Monday. It was a record one-day loss for ANY company, as shares of companies in semiconductor, power and infrastructure companies exposed to AI collectively shed more than $1 trillion!

The low-cost DeepSeek, if proven to be legitimate, could deliver quite the blow to the U.S. dominance of AI.

JJ Kinahan, president of tastytrade brokerage in Chicago, called the Nvidia dip “an initial reaction. Today investors are asking if anybody did any sort of homework and made sure DeepSeek is exactly what they say it is. Can we have more proof that they really built it for so much less?”

Developers at leading U.S. AI firms did praise the DeepSeek AI models, while also questioning if their technology has truly been bested by a low-cost alternative.

Around the Water Cooler:

🤷‍♂️ Back to the office, Bosses Are Done Caring How You Feel.

🥔 Lay’s recall of classic chips in 2 states classified at highest risk level, FDA warns it could cause 'death'.

U.S. News

ICE Raids, They’re Not Playing

Miami, Chicago, Atlanta, NYC, Atlanta, & more.

The new administration has begun its immigration enforcement operations immediately, with prompt sweeps through major U.S. cities.

U.S. Immigration and Customs Enforcement (ICE) said it arrested 956 people on Sunday alone. According to an NBC News report, that number was actually closer to 1,200 arrests, with only 52% of them considered “criminal arrests.”

The others appeared to be nonviolent offenders or people who have not committed any criminal offense other than crossing the border illegally. Being undocumented is considered a civil offense, not a crime.

According to ICE, another 1,179 arrests were made on Monday.

The Trump administration is planning to conduct major immigration raids in three U.S. cities per week, according to sources familiar with the planning. One of the sources described the operation as “all hands on deck.”

Operations began on Sunday in Chicago and on Tuesday in New York City. The next operation is planned for today in Colorado. Next week, three more cities are expected to be targeted.

There was also an ICE raid in Philadelphia this week, as well as San Diego, Denver, Miami, Atlanta and various cities in Texas. These raids were much smaller than the other sweeps, resulting in only a handful of arrests.

Around the Country:

🚔 Indiana man pardoned for Jan. 6 crimes is killed in traffic stop shooting by deputy.

😷 Kansas officials say tuberculosis outbreak is largest on record in US history.

Economy

Fed is Going to Halt Rate Cuts

Even though the thought was to that they would be lowered.

Bad news for the borrowers hoping for more financial relief from the Federal Reserve… you might have to wait a while…

The central bank is expected to hit the pause button on additional rate cuts at it’s meeting this week. The Fed is expected to hold its benchmark rate steady at its current range of 4.25-4.5%. Most economists also predict the Fed will hold off on cutting at its March 19th meeting, too!

Therefore, the next rate cut would not occur until the central bank’s May 7^th meeting… at the earliest.

The pause would mark an end to the Fed’s flurry of rate cuts, which began in September, that has helped trim borrowing costs for credit cards, home equity lines of credit, and other debt.

However, in December, Fed Chair Jerome Powell pointed to the steady inflation, which remains above the goal of 2%, as a cause for concern and contributor to fewer cuts in 2025.

“The reason why the Fed isn’t jumping the gun at lowering the rates faster and further is that, on one hand, inflation is not gone. They looked carefully at the data, and it is still stubbornly above target, so there is concern [that] if you lower rates further, inflation would tick up again,” explained Erasmus Kersting, a professor of economics at Villanova University.

The impending tariffs and mass deportations are also a concern, which is why the Fed is “right to be careful about lowering rates,” according to Kersting.

From The Street:

🎰 Investors bet on Nvidia share recovery with buying of leveraged ETFs.

💵 Dollar steadies ahead of Fed rate decision.