Global stockmarkets slumped as investors panicked over the Chinese startup DeepSeek’s low-cost artificial-intelligence model. America’s tech-heavy NASDAQ 100 dropped by more than 3% on Monday and Japan’s Nikkei 225 fell by 1.7% during trading on Tuesday. Investors fear that DeepSeek’s emergence could cut demand for AI hardware. Shares in Nvidia fell by 17%, wiping more than $589bn from the American chipmaker’s market value.
Meanwhile President Donald Trump said that DeepSeek’s breakthrough should be a “wake-up call” for American tech firms. Mr Trump insisted that the Chinese firm’s low-cost model was “very much a positive development” for the AI industry. Sam Altman, the founder of OpenAI, an American start-up, acknowledged that DeepSeek’s AI offering was “impressive”, but insisted that his firm would “deliver much better models”.
America’s Senate confirmed Scott Bessent’s appointment as treasury secretary. The hedge-fund titan has a moderate interpretation of Mr Trump’s economic agenda. According to the Financial Times, Mr Bessent wants to impose a universal tariff on imports that would start at 2.5% and rise gradually. But speaking hours after Mr Bessent’s confirmation hearing, Mr Trump said he wanted “much, much bigger” tariffs.
Denmark announced plans to boost security in the Arctic, in partnership with the Faroe Islands and Greenland, two of its autonomous territories. The proposed plan, which includes an investment of $2bn in surveillance, comes after Mr Trump’s recent statements about America acquiring Greenland. Denmark’s defence minister said his country faces serious security challenges in the Arctic.
China and India agreed to resume direct flights to each other for the first time in five years, a further sign that relations between the neighbours are improving. In 2020 dozens of soldiers were killed in border clashes between their armies. But in October last year Narendra Modi and Xi Jinping held their first official meeting since 2019.
TheM23 rebels in the Democratic Republic of Congo marched into Goma, after attacking the eastern city on Sunday. The Congolese government insisted that its troops still controlled the majority of Goma. Earlier it accused Rwanda, which backs M23, of “declaring war”. Paul Kagame, the president of Rwanda, and Félix Tshisekedi, his Congolese counterpart, agreed to hold talks on Wednesday.
America’s Justice Department sacked more than a dozen lawyers who worked on criminal prosecutions against Mr Trump. The cases—in which Mr Trump was charged with election interference and mishandling classified documents—were led by Jack Smith, the special counsel, who has already resigned. Separately, Pete Hegseth, the new defence secretary, said that Mr Trump will sign executive orders eliminating diversity, equity and inclusion initiatives from the army.
Figure of the day: 92, the number of vessels that navigated Russia’s Northern Sea Route last year, up from 19 in 2016. Read the full story.
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