Italy Closes Probe Into DeepSeek After Commitments to Warn Users of AI “Hallucination” Risks

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Italy’s antitrust authority has closed an investigation into Chinese artificial intelligence system DeepSeek after the company agreed to binding commitments aimed at improving warnings about the risk of AI-generated false information.

The probe, launched last June by Italy’s antitrust and consumer protection authority AGCM, focused on allegations that DeepSeek failed to adequately inform users that its AI system could generate inaccurate, misleading, or fabricated content — commonly referred to as “hallucinations.”

The decision to end the investigation was announced in the AGCM’s weekly bulletin published on Monday. According to the regulator, the commitments were submitted by Hangzhou DeepSeek Artificial Intelligence and Beijing DeepSeek Artificial Intelligence, which jointly own and operate the DeepSeek platform.

The agreed measures include clearer and more prominent disclosures explaining the risk that, based on user inputs, the AI model may produce outputs containing incorrect or invented information. The AGCM said the new disclosures are designed to be more transparent, intelligible, and immediately visible to users.

“The commitments presented by DeepSeek make disclosures about the risk of hallucinations easier, more transparent, intelligible, and immediate,” the authority said in its bulletin.

The case highlights growing regulatory scrutiny across Europe over how AI systems communicate their limitations to users, particularly as generative AI tools become more widely adopted in consumer-facing applications.

Microchip Technology Raises Q3 Revenue Forecast on Strong Bookings and Market Recovery

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U.S. semiconductor maker Microchip Technology raised its forecast for third-quarter net sales on Monday, citing strong customer bookings and a broad-based recovery across end markets, sending its shares up 5.6% in after-hours trading.

The company said it now expects net sales of about $1.19 billion for the third quarter of fiscal 2026, exceeding its previous forecast range of $1.11 billion to $1.15 billion issued in November. In early December, Microchip had already indicated that sales were likely to come in at the upper end of that range.

Microchip has been benefiting from a gradual rebound in demand as customers work through excess semiconductor inventories accumulated during the pandemic, which had weighed heavily on orders in recent quarters.

“Our bookings activity was very strong in the December quarter despite a holiday-filled period,” Chief Executive Steve Sanghi said. He added that the company’s backlog for the March quarter started at a significantly higher level than the December quarter, signaling improved visibility for future demand.

The company also said it has made progress in reducing internal inventory levels, a move expected to lower inventory-related write-offs. At the same time, Microchip is preparing to ramp up factory production in the March quarter to reduce under-utilization charges as demand improves.

Microchip Technology is scheduled to report its fiscal third-quarter results on February 5.

Bitcoin Hoarder Strategy Reports $17.44 Billion Unrealized Loss in Fourth Quarter

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Strategy, the company led by Michael Saylor, disclosed a $17.44 billion unrealized loss on its digital asset holdings in the fourth quarter, reflecting a sharp decline in the value of its large bitcoin stockpile.

The loss underscores the volatility facing companies that hold cryptocurrencies on their balance sheets. Strategy’s shares fell about 47.5% in 2025, as fluctuations in crypto markets weighed heavily on the company’s balance sheet and reported earnings.

For the full year ended December 31, 2025, Strategy reported an unrealized loss of $5.40 billion on digital assets. In December, the company also cut its earnings forecast for 2025, citing sustained weakness in Bitcoin prices.

Companies with significant exposure to bitcoin and other digital tokens have come under renewed pressure in recent weeks amid heightened market volatility. Strategy, the world’s largest corporate holder of bitcoin, has been particularly sensitive to these swings due to the scale of its holdings.

The company said that as of January 4, 2026, it held $2.25 billion in U.S. dollar reserves. Strategy maintains this cash reserve to support dividend payments on its preferred stock and to cover interest obligations on its outstanding debt.

Despite the recent losses, Strategy has continued to position bitcoin as a core long-term asset on its balance sheet, even as investors remain cautious about the impact of crypto price movements on the company’s financial performance.