Chinese Chip Makers and Cloud Providers Rush to Support DeepSeek’s AI Models

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Chinese chip makers and cloud service providers are quickly integrating DeepSeek’s artificial intelligence models into their systems, marking a significant turning point for the nation’s AI industry. Companies like Moore Threads and Hygon Information Technology, both AI chip manufacturers, announced that their computing clusters and accelerators are now compatible with DeepSeek’s R1 and V3 models. Moore Threads even shared a celebratory post on WeChat, praising DeepSeek’s ability to drive China’s AI sector forward by utilizing domestically produced graphic processing units (GPUs).

Huawei Technologies, which also develops AI chips, revealed it is collaborating with AI infrastructure startup SiliconFlow to integrate DeepSeek’s models into its Ascend cloud service. This integration has been described as a “watershed moment” by Bernstein analysts, highlighting the growing independence of China’s AI sector from advanced U.S. hardware.

Cloud giants like Alibaba, Baidu, and Tencent have also jumped on board, offering DeepSeek’s models through their respective services. DeepSeek’s AI assistant, launched last month, quickly gained popularity by offering a more data-efficient alternative at a fraction of the cost of global competitors, surpassing ChatGPT in app downloads from Apple’s App Store within days.

The company has drawn attention globally with its groundbreaking approach. DeepSeek’s research, published in December, claimed that its V3 model’s training cost less than $6 million in Nvidia’s H800 chips—significantly lower than the billions spent by companies like Meta and Microsoft. This has been a major factor in DeepSeek’s rising prominence, with its founder, Liang Wenfeng, becoming a cultural figure in China.

While Microsoft and Amazon have started offering DeepSeek’s models, some countries, including Italy and the Netherlands, have raised concerns over privacy, leading them to either block or investigate the AI app.

 

Alphabet Plans Massive Capex Increase as Cloud Revenue Growth Slows

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Alphabet (GOOGL.O) announced plans to spend $75 billion on its AI infrastructure in 2025, a 29% increase over Wall Street’s expectations. This announcement led to a 9% drop in Alphabet’s stock in after-hours trading as investors expressed disappointment with the company’s missed cloud revenue target and growing concerns over its profitability.

Alphabet’s planned capex for 2025 exceeds analysts’ expectations of $58 billion and marks a dramatic increase from the $52.5 billion spent in 2024. CEO Sundar Pichai defended this surge in investment, citing the enormous potential of the AI space and promising that the cost of AI technology would continue to decrease, making it more accessible. Despite this optimism, Alphabet reported a slowdown in its cloud revenue growth, which failed to meet projections.

The company’s cloud business saw a 30% rise in revenue, reaching $11.96 billion for the fourth quarter. However, this was a deceleration from the 35% growth in the previous quarter and missed the expected $12.16 billion. Pichai emphasized that the Gemini family of AI models would drive further growth within the cloud platform, noting that developer usage of Gemini had doubled in the last six months.

Alphabet’s capital spending is primarily focused on building servers and data centers to support its AI initiatives. The company’s cloud segment has faced heightened competition, especially from rivals like Microsoft and Amazon, with the latter set to release its quarterly results soon.

Meanwhile, Alphabet’s core advertising business, which represents around 75% of total revenue, showed positive performance, with ad revenue growing 10.6% to $72.46 billion in the fourth quarter. YouTube contributed significantly to this growth, with ad revenue increasing by 13.8%.

Alphabet’s overall revenue for the quarter rose 12% to $96.47 billion, surpassing analyst expectations, while profits came in at $2.15 per share, above the forecasted $2.13 per share.

 

Emerson Reports Strong First-Quarter Profit Amid Increased Demand for Industrial Components

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Emerson (EMR.N), an engineering solutions provider, reported better-than-expected first-quarter profits on Wednesday, driven by robust demand for its valves and regulators in the industrial components sector. This surge in demand is attributed to increased energy and power investments by businesses.

Sales in Emerson’s final control unit, which manufactures valves, regulators, and actuators, saw a 4% rise, reaching $976 million in the reported quarter. On an adjusted basis, Emerson earned $1.38 per share for the quarter ending December 31, surpassing analysts’ estimates of $1.28 per share, according to data from LSEG.

CEO Lal Karsanbhai expressed confidence in the company’s future, noting that the resilient demand in process and hybrid markets, along with a projected recovery in the second half of the year, will continue to drive sales and earnings. Emerson reaffirmed its forecast for 2025 per-share adjusted profit to be in the range of $5.85 to $6.05.

However, the company’s total quarterly revenue rose just 1% to $4.18 billion, slightly missing analysts’ average estimate of $4.23 billion, due to a slowdown in demand for its automation technology.