This week, the world of technology policy is at a tipping point, with Washington and the tech industry reeling from a seismic shift. A Chinese AI startup’s breakthrough has wiped $1 trillion off U.S. tech valuations, sparking fears of an AI "Sputnik moment" and raising urgent questions about America’s competitive edge. Meanwhile, Indian media giants are taking legal action against OpenAI, Davos debates the promise and perils of generative AI, and surveillance tech fuels contentious immigration policies. Dive into this week’s newsletter for an in-depth look at the market turmoil, policy battles, and ethical dilemmas reshaping the future of tech.

In this week’s Nimitz Tech:

• Elon: The Musk-Trump rift over AI funding sparks tensions and questions about loyalty in Silicon Valley.

• Surveillance: Tech, built over decades, becomes the centerpiece of Trump’s sweeping immigration crackdown.

• China: DeepSeek AI shakes global markets, challenging U.S. dominance and redefining the AI race.

WHO’S HAVING EVENTS THIS WEEK?

Tuesday, January 28th

• 📎 Senate Hearing: “To Receive Testimony on Defense Innovation and Acquisition Reform.” Senate Committee on Armed Services. Hearing scheduled for 9:30 AM in G50 Dirksen SOB. Watch here.

TECH NEWS DRIVING THE WEEK

In Washington

• Elon Musk’s criticism of President Trump’s $500 billion Stargate AI infrastructure project, involving OpenAI’s Sam Altman, has created a public rift between the Tesla CEO and the president. Musk, a long-time Trump ally, questioned the financial backing of the project, sparking a tense online exchange with Altman, who defended the initiative as vital for U.S. innovation. While Trump dismissed Musk’s criticisms as personal grievances, analysts suggest the clash could test Musk’s influence within Trump’s administration, where he holds a key advisory role. This dispute highlights growing tensions in the tech world, where leaders must balance political alliances with corporate rivalries, as the stakes for U.S. AI leadership continue to rise.

• President Trump’s immigration agenda relies heavily on an expansive arsenal of surveillance technologies developed over decades by both Democratic and Republican administrations. Tools like GPS trackers, biometric databases, phone-cracking software, and facial recognition systems allow agencies like ICE to locate, monitor, and analyze migrants with unprecedented precision. While many of these technologies were originally intended for investigations into organized crime, they are now being repurposed for mass deportation efforts under Trump's executive orders. The growing use of these tools raises significant privacy concerns, as critics warn that vulnerable populations may face disproportionate harm. Meanwhile, tech companies and private contractors stand to profit immensely from the heightened demand for their products.

National

• The launch of China’s DeepSeek AI assistant sent shockwaves through global markets, erasing $1 trillion from the Nasdaq composite index and raising concerns about U.S. dominance in artificial intelligence. DeepSeek's R1 model rivaled or outperformed leading AI models like OpenAI’s ChatGPT, achieving this with significantly fewer resources and lower costs, undermining the necessity of massive investments by U.S. tech companies. Nvidia, a key player in AI chip manufacturing, suffered historic losses, with its market value dropping nearly $600 billion. DeepSeek’s success, achieved using downgraded Nvidia chips barred by U.S. sanctions, challenges the efficacy of Washington's efforts to curb China’s tech progress and has sparked debates over the sustainability of current AI spending strategies. With its open-source approach and affordability, DeepSeek has been hailed as a democratizing force in AI, but its emergence also casts uncertainty on the future of U.S.-led AI innovation.

International

• Indian media outlets, including billionaires Gautam Adani’s NDTV and Mukesh Ambani’s Network18, have joined a lawsuit against OpenAI, accusing it of using their copyrighted content without permission to train its ChatGPT models. The filing, which follows a similar lawsuit by ANI, alleges OpenAI’s "wilful scraping" of news content poses a "clear and present danger" to copyright protections and undermines local media. While OpenAI has argued its use of publicly available data is protected under fair use principles, the publishers claim the company’s failure to form agreements with Indian outlets, as it has abroad, is unlawful and harms the nation’s press. The case escalates India’s role in global debates over AI ethics and copyright, with hearings expected to test the balance between technological progress and intellectual property rights.

• At this year’s World Economic Forum in Davos, artificial intelligence, particularly tools like ChatGPT, dominated conversations, signaling a major shift in technological focus. Industry leaders and experts were both awed and alarmed by the rapid advancement of generative AI, discussing its potential to revolutionize fields like healthcare, expand access to services, and reshape the workforce, while also acknowledging risks such as misinformation, bias, and misuse against vulnerable groups. Optimists highlighted AI's potential to lower costs and enable precision medicine, while skeptics warned of ethical pitfalls and societal disruption. Regulators are beginning to tackle these challenges, with the EU's AI Act as a notable example. As generative AI rapidly evolves, the consensus is clear: it holds incredible promise but requires thoughtful oversight to mitigate its risks.

FOR FUN

• 🐍 Chinese Lunar New Year Parade | 2 p.m. | Free | Gallery Place

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