January 27 2025

1. New Chinese AI Model Is High Quality and Low Cost, Threatening US Tech Lead
2. US Tech Stocks Get Crushed As New Cold War’s “AI’s Sputnik moment” Leaves Investors Reeling
3. US Home Sales Hit 29-Year Low as High Costs Block Buyers
4. Colombia Accepts US Deportation Flights After Trump Threatens Tariffs
5. Trump Proposes Gaza Relocation, Palestinians Begin Return to Northern Gaza
6. Chiefs, Eagles Super Bowl Rematch After Conference Championships
January 27, 1959: NASA selects 110 candidates for the first U.S. space flight

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1. New Chinese AI Model Is High Quality and Low Cost, Threatening US Tech Lead

A small Chinese artificial intelligence lab stunned the world this week by revealing the technical recipe for its cutting-edge model, turning its reclusive leader into a national hero who has defied US attempts to stop China’s high-tech ambitions.  DeepSeek, founded by hedge fund manager Liang Wenfeng, released its R1 model on Monday, explaining in a detailed paper how to build a large language model on a bootstrapped budget that can automatically learn and improve itself without human supervision. US companies including OpenAI and Google DeepMind pioneered developments in reasoning models, a relatively new field of AI research that is attempting to make models match human cognitive capabilities. In December, the San Francisco-based OpenAI released the full version of its o1 model but kept its methods secret.  DeepSeek’s R1 release sparked a frenzied debate in Silicon Valley about whether better resourced US AI companies, including Meta and Anthropic, can defend their technical edge. Please use the sharing tools found via the share button at the top or side of articles.  After Washington banned Nvidia from exporting its most powerful chips to China, local AI companies have been forced to find innovative ways to maximise the computing power of a limited number of onshore chips — a problem Liang’s team already knew how to solve. DeepSeek claimed it used just 2,048 Nvidia H800s and $5.6mn to train a model with 671bn parameters, a fraction of what OpenAI and Google spent to train comparably sized models. Ritwik Gupta, AI policy researcher at the University of California, Berkeley, said DeepSeek’s recent model releases demonstrate that “there is no moat when it comes to AI capabilities”.  

Editor note: Ad Astra has long been skeptical of US semiconductor bans on China, but it’s now clear the chip export ban backfired spectacularly. We imposed a constraint and the Chinese came up with an AI model that runs on older chips and is more efficient than US models. Necessity is the mother of innovation.

Article Source: FT

2. US Tech Stocks Get Crushed As New Cold War’s “AI’s Sputnik moment” Leaves Investors Reeling

Tech stocks tumbled on Monday as advances by Chinese artificial intelligence start-up DeepSeek cast doubt on whether the US could sustain its leadership in AI by spending billions of dollars on chips. DeepSeek last week released its latest large language AI model, which achieved a comparable performance to those of US rivals OpenAI and Meta but claims to use far fewer Nvidia chips. The results sent a shockwave through markets on Monday, with Nvidia on course to lose more than $300bn of market value, the biggest recorded drop for any company, as investors reassessed the likely future investment in AI hardware. Venture capital investor Marc Andreessen called the new Chinese model “AI’s Sputnik moment”, drawing a comparison with the Soviet Union stunning the US by putting the first satellite into orbit.

Article Source: FT

3. US Home Sales Hit 29-Year Low as High Costs Block Buyers

A. U.S. existing-home sales fell in 2024 to the lowest level since 1995, the second straight year of anemic sales due to stubbornly high mortgage rates. High costs related to homeownership sapped sales again. The average rate for a 30-year fixed mortgage has hovered between 6% and 8% since late 2022, making it prohibitively expensive for many Americans to buy homes at current prices, which hit record highs last year. Rising home insurance and property tax costs are also adding to homeowners’ expenses. Unlike mortgage rates, which fluctuate, these costs are poised to continue rising.  

B. In January 2012, the household income required to afford the typical home in the U.S. was $39,223, according to Redfin. As of November 2024, home buyers need to earn $126,764, a 223% increase.

Article Source: WSJ

4. Colombia Accepts US Deportation Flights After Trump Threatens Tariffs

Under threats from President Trump that included steep tariffs, President Gustavo Petro of Colombia has relented and will allow U.S. military planes to fly deportees into the country, after turning two transports back in response to what he called inhumane treatment. The two leaders had engaged in a war of words on Sunday after Colombia’s move to block Mr. Trump’s use of military aircraft in deporting thousands of unauthorized immigrants. But on Sunday night, the White House released a statement in which it said that because Mr. Petro had agreed to all of its terms, the tariffs and sanctions Mr. Trump had threatened would be “held in reserve.” Other penalties, such as visa sanctions, will remain in effect until the first planeload of deportees has arrived in Colombia, the statement said.

Article Source: NYT

5. Trump Proposes Gaza Relocation, Palestinians Begin Return to Northern Gaza

A. President Trump’s Saturday night proposal that Palestinians vacate a devastated Gaza marked a sharp break with his predecessor and introduced a contentious new initiative into his unfolding Middle East diplomatic plans. Trump said the resettling of the Palestinians from Gaza “could be temporary or long term.”  His statement could mark a dramatic shift in U.S. policy toward Palestinians under presidents of both parties. No recent White House has suggested the “long-term” departure of Palestinians from Gaza, which most U.S. presidents have seen as a part of an eventual Palestinian state. “It’s literally a demolition site right now,” he said. “So, I’d rather get involved with some of the Arab nations, and build housing in a different location, where they can maybe live in peace for a change.”  

B. Palestinians displaced from northern Gaza began a long-awaited journey home Monday morning after Israel and Hamas resolved a hostage dispute overnight that had threatened the fragile ceasefire agreement and delayed their ability to return. Video footage showed throngs of people walking along the coastal al-Rashid road, marking the first time since the early weeks of the 15-month war that Israel has allowed Palestinians to cross the Netzarim Corridor, which splits the enclave in two, to the north, where some of the worst fighting and destruction has happened.  

Article Source: NYT, WaPo

6. Chiefs, Eagles Super Bowl Rematch After Conference Championships

For the third straight season and for the fifth time in six years, the Kansas City Chiefs are returning to the Super Bowl. The two-time reigning champions held off the Buffalo Bills in a 32-29 thriller Sunday night in the AFC Championship Game and will look to make NFL history by winning three Super Bowls in a row. To do it, they’ll have to take down a familiar foe. The Philadelphia Eagles demolished the Washington Commanders 55-23 on Sunday in the NFC Championship Game and will look for vengeance against a Chiefs team that vanquished them in the Super Bowl two seasons ago.

Article Source: NYT

January 27, 1959: NASA selects 110 candidates for the first U.S. space flight

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Sources

2. https://www.wsj.com/economy/housing/housing-shortage-not-volatile-rates-is-biggest-obstacle-for-buyers-zillow-ceo-says-62db72c5?st=25rN9v&reflink=article_copyURL_share

3. https://smallwarsjournal.com/2025/01/22/the-new-front-in-americas-national-security-combating-narcoterrorism/

4. https://www.bbc.com/news/articles/cy8pgp0e1g6o

5. https://www.nytimes.com/2025/01/24/climate/trump-says-states-should-manage-disasters-former-fema-leaders-agree.html?smid=nytcore-ios-share&referringSource=articleShare

6. A https://truthsocial.com/@realDonaldTrump/113872782548137314
B https://www.wsj.com/world/russia/russia-brushes-off-trumps-threats-on-ukraine-2e1e306c?st=qDN3DL&reflink=article_copyURL_share
C https://www.politico.eu/article/ukraine-russia-donald-trump-vietnam-steve-bannon-richard-nixon-war-room/