Wall Street Rattled By Chinese AI Bombshell

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In Today’s Brief

• Maine: Earthquake hits

• Asia: Flight diplomacy

• House: Sanctuary cities

• Amazon: Grocery push

• Coldplay: Historic shows

... and more

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Top Tips

1) Red scare

A new Chinese artificial intelligence model's reveal sent financial markets into a tizzy yesterday.

• The news: DeepSeek, a startup founded by a Chinese hedge fund manager, has developed a large language model at a fraction of the cost compared to rivals like OpenAI's ChatGPT while using less-advanced computing chips. The rollout sparked geopolitical fears and questions about Silicon Valley's spending and strategies just days after President Donald Trump heralded the $500B Stargate project.

• The reaction: AI giant Nvidia lost almost $600B in market cap, the biggest single-day drop in history. Other tech firms also saw their share prices plummet. The tech-heavy Nasdaq dipped over 600 points; the S&P 500 went down almost 100 while the Dow Jones jumped almost 300 (Dow +0.65%, Nasdaq -3.07%, S&P 500 -1.46%). The world’s top-500 richest people lost over $100B in projected net worth on the day.

• Next steps: Trump called DeepSeek a "wake-up call" for American tech companies while OpenAI CEO Sam Altman conceded the product is "impressive.” But many financial analysts felt the sell-off was unnecessary panic. Experts said DeepSeek is more affordable, but will likely address the budget sector of AI and is not indicative of an industry bubble that is about to burst. There was also some skepticism about the Chinese company’s claims.

2) Surprising spread

Kansas is currently experiencing the largest documented tuberculosis outbreak in national history.

• The news: Health officials have confirmed 67 active TB cases in the Kansas City metropolitan area on the Kansas side as of Jan. 24. There were also 79 latent cases -- infections without disease symptoms -- in the region dating back to last year. Both figures are records since the Centers for Disease Control and Prevention began monitoring and reporting on TB in 1950.

• The illness: TB is a curable, preventable infectious disease caused by bacteria that typically affects the lungs. It is spread when infected people cough, sneeze or spit. The World Health Organization estimates about 25% of the world's population has been infected with the bacteria, but only 5-10% of the infected get symptoms and develop the disease. TB is believed to have moved back ahead of Covid-19 as the world's deadliest infectious agent.

• Big picture: There are TB vaccines, but they are typically not given in the U.S. due to the bacteria's limited presence; suspected cases are instead treat by need. TB cases are on the rise nationally in recent years, but the health officials said the threat to the public remains low. Frequent international travelers and people who live in communal settings are at higher risk, as well as the immuno-compromised.

3) Rebel claim

One of Africa's longest-running wars has escalated further.

• What happened: The M23 militia has reportedly captured Goma, the largest city in the eastern part of the Democratic Republic of the Congo. The United Nations said the rebels were supported by some Rwandan troops; the neighboring country is a benefactor of the insurgents.

• Key context: The M23 group is primarily made up of ethnic Tutsis. Hutu militias killed between 500K and 1M Tutsis during the Rwandan geniocide in 1994; Tutsi forces then pushed almost 2M Hutus to flee into the DRC, where they have remained. Conflicts between various armed factions have flared up for decades in the war-torn region.

• Big picture: Goma is a key regional hub and its airport is critical to trade and supply chains. The DRC has an estimated $24T in largely untapped mineral resources. M23 appears determined to hold the city as leverage in talks with the DRC (and some analysts believe Rwanda may be angling for its own control using the rebels as proxies). There are already 4M people displaced in the region; those numbers are expected to rise. The DRC has severed diplomatic ties with Rwanda while the U.S. and other Western countries are pressuring Rwanda to back down while African leaders try to begin ceasefire talks.

Quick Tips

U.S. News

• A 3.8 magnitude earthquake occurred off the coast of Maine near York Harbor. The quake was felt in Boston as well as parts of New Hampshire and Rhode Island; there were no immediate reports of damage (More)

• The U.S. has experienced its first outbreak of H5N9 bird flu in poultry. A duck far in California was impacted; the strain is rarer than the H5N1 one that has been most prevalent nationally and globally (More)

• A Colorado man was killed by an errant hammer throw during a high school track and field meet. A throw during competition "cleared certified barriers and struck" the deceased; police said it was not a criminal incident (More)

World News

• China and India will resume direct commercial flights between the nations, ending an almost five-year pause. Relations between the countries were strained in recent years, but there has been a recent diplomatic thaw (More)

• There are fewer than 220K Holocaust survivors remaining worldwide, according to a new study. Yesterday was the 80th anniversary of the liberation of the Auschwitz-Birkenau death camp (More)

• The European Union will renew its sanctions on Russia for at least another six months. Hungary reportedly backed down from a veto threat after President Trump threatened the Kremlin with sanctions if it does not negotiate to end the war in Ukraine (More)

Political News

• House Republicans plan a Feb. 11 hearing on sanctuary cities. The mayors of Boston, Chicago, Denver and New York were called to testify on their cities' policies handling migrants who are in the county illegally (More)

• President Trump fired over a dozen Justice Department employees involved in federal prosecutions against him. His administration has ordered a sweeping freeze of all federal aid in an unexpected move (More | More)

• Billionaire investor Scott Bessent was approved as Treasury Secretary. He is the highest-ranking LGBTQ official in the nation's history; the position is fifth in line to the presidency while former Transportation Secretary Pete Buttigieg was 14th (More)

Business & Markets

• Whole Foods CEO Jason Buechel will now add Amazon's entire grocery business to his oversight portfolio. The e-commerce giant has struggled to establish itself in the sector despite significant investments, including buying the retail chain; Coca-Cola has recalled some drinks in Europe due to concerns about chlorate contamination (More | More)

• There will be no last-second Paramount Global takeover drama. The entertainment giant's board said it is bound to close out its deal with Skydance Media and cannot entertain 11th-hour offers after a late bid from a rival consortium (More)

• President Trump claimed Microsoft is in talks to buy TikTok. He said he would like to see a bidding war break out for the controversial social media platform, which is controlled by Chinese parent company ByteDance (More)

Entertainment & Sports

• Coldplay played the largest stadium concerts of the 21st century last weekend, according to Live Nation. The British band performed for almost 112K fans on back-to-back nights at Narendra Modi Stadium in Ahmedabad, India (More)

• Fenway Sports Group is shopping a minority share in the NHL's Pittsburgh Penguins. The ownership group also controls MLB's Boston Red Sox and Liverpool in the English Premier League (More)

• Warner Bros. will adapt Dr. Seuss' final book for big screen. Oh, the Places You'll Go! will be released in 2028; Jon M. Chu will direct the animated musical and J.J. Abrams is among the producers (More)

Quick Hitters

• Feel Good: A Chicago woman said a man's kindness right before Christmas made her whole year. So she has decided to pay it forward.

• Take Note: Many world cultures have devised ways for individuals to carry loads far heavier than their body weight. Here is what we can learn from their strategies and techniques.

• Go Deep: Cryopreservation has moved well beyond rumors about Walt Disney and headlines about Ted Williams. The technology could completely change how we think about death.

• New Idea: Researchers at Penn State have invented an "electric tongue." The device mimics how humans taste and uses artificial intelligence and tiny sensors to detect food contamination, fraud and spoilage within minutes.

• Life Hack: Heating bills can be hefty at this time of year. Here are some smart steps to stay warm and save money.

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Looking Ahead …

Hollywood's fiercest current feud -- the dueling lawsuit battles between actors Justin Baldoni and Blake Lively -- is now scheduled to go to trial in the spring of 2026. But hearings on whether gag orders should be instituted could start much sooner.

Question of the Day — Trivia Tuesday

Yesterday’s results:

Who will win the Super Bowl?

• Chiefs (58%)

• Eagles (42%)