DeepSeek, Trump and Hegseth’s Pentagon and USAID
12:14 Share

Today, why China's surprise AI success is upending the tech universe and the stock market. How Trump's defense secretary seeks to make his mark on the Pentagon. And what America first means for USAID worldwide. It's Tuesday, January 28th. This is Reuters World News, bringing you everything you need to know from the front lines in 10 minutes every weekday. I'm Jonah Green in New York. And I'm Tara Oaks in Liverpool.

When you hear LSEC Data & Analytics, what do you think of? Comprehensive data you can trust. Exclusive access to Reuters news. Industry-leading analytics and unique insights. Discover new possibilities with LSEC Data & Analytics.

Chinese AI startup DeepSeek sent U.S. stocks reeling on Monday. Chipmaker NVIDIA lost $593 billion in market value in a single day. And yes, that's a record for any company on Wall Street. The low-cost startup even caught the eye of President Trump. DeepSeek.

AI from a Chinese company should be a wake-up call for our industries that we need to be laser-focused on competing to win. Global tech industry editor Ken Li has been looking at the threat DeepSeek poses to the tech world order. DeepSeek is actually a set of AI models that were released recently.

late last year to not a whole lot of fanfare. But what it purported to do was a couple of things. One, it was able to either meet or exceed benchmarks set by far more powerful and well-financed AI companies like OpenAI and Google. And the more surprising thing was it did so with a lot less resources. It's not fully transparent exactly how much they spent to develop the two models. We

We only know about one of them, and that's the one that the whole world is seizing on. The V3 model, they said, had used kind of lower-end NVIDIA chips and spent under $6 million to develop this model that, in many cases, were able to beat OpenAI's ChatGPT. So it's a big mystery as to exactly what is real here and how much it costs. What is real is the performance of these models are pretty fantastic.

And that has stooped the entire market, which has been trained essentially to accept the fact that big tech requires vast sums of money to buy vast amounts of chips and use vast amount of data to show AI improvements. We heard President Trump weighing in earlier. What does this mean for the AI race in the U.S.? Trump eliminated AI.

So the AI guardrails put in place by Biden, and they're seizing this moment as a rationale for eliminating even more guardrails. That in order to keep America competitive, that they need fewer controls over what they can do and really compete against China.

Turbulence in some of the biggest tech names is reminding investors of one of the major risks to the US stock market's record-setting rally. Reliance on a handful of mammoth companies to power those gains. Nvidia is one of the magnificent seven mega caps who, combined, contributed more than half of the S&P 500's 25% total return in 2024.

And on Reuters.com and the Reuters app, we have a neat Magnificent 7 monitor to track those tech stocks which have dominated the market. There's a link in the pod description. In Democratic Republic of Congo, Rwanda-backed M23 rebels have faced pockets of resistance from the army and pro-government militia in the city of Goma overnight. Residents have reported small arms fire and loud explosions this morning, including at the airport.

Sources say the airport is still being held by UN peacekeepers and government troops. Trump is pushing ahead with military deportation flights, sending another plane load of migrants to Guatemala on Monday. Meanwhile, in a reversal to her previous position, Mexican President Claudia Sheinbaum says Mexico has received non-Mexican migrants in the last week, and that other Central American countries could also cut similar deals with the U.S.

President Trump is making moves against his perceived enemies within the Justice Department. On Monday, he fired more than a dozen DOJ lawyers who brought two criminal cases against him, an official said. At the same time, a source tells Reuters that the top federal prosecutor in Washington, a Trump appointee, has opened an internal review into the prosecutions of those who took part in the January 6th riot.

Trump says Microsoft is in talks to acquire TikTok, adding he'd be up for a bidding war over the social media app. TikTok and its owner ByteDance did not comment. And Google Maps has a direction for the Gulf of America slash Gulf of Mexico controversy.

Once a name is officially updated in the US Geographic's names system, Google Maps users in the US will see it change to Gulf of America. For users in Mexico, it will still be called Gulf of Mexico. And for people everywhere else, both options will come up on their screens. Secretary of Defense Pete Hexer, who was narrowly confirmed by a tie-breaking vote in the Senate on Friday, arrived to his first day at the Pentagon Monday.

Hegseth highlighting the executive orders that Trump would sign later in the day. Removing DEI inside the Pentagon, reinstating troops who were pushed out because of COVID mandates. Hegseth, like his boss, is promising major change with a focus on culture war issues like diversity, equity and inclusion. Idrissa Lee covers the Pentagon.

Coming into this job, there was sort of lots of statements that he had made that really created tension right off the bat. In one of his books recently, he suggested that the top U.S. General, General C.Q. Brown, who was black, might have been selected because of his skin color.

When Pete Hexeth arrived at the Pentagon, General Brown was waiting to greet him on the steps. The two shook hands and we yelled a question about whether he would fire the chairman of the Joint Chiefs of Staff, General Brown, who was standing next to him. He looked at General Brown, smiled and said, I am standing right next to him. And he said, I'm looking forward to working with him. He patted him on the back and the two walked into the Pentagon.

What will Hegseth's immediate focus be on? What's becoming clear to us is that his focus initially will be internal, within issues at the Pentagon that he sees as problematic or potentially controversial. Talking to reporters on his first day at the Pentagon, he

He referred to bases that were named after Confederate generals that have now been changed by their original names. And Pete Hexet has made clear that it's not just about foreign wars and foreign conflict. It's going to be about DEI looking at troops who are serving in the military and sending troops to the border to sort of, in the words of President Trump, defend the United States.

As Trump makes his mark on the U.S. military, his administration is also shaking up foreign policy objectives at the U.S. Agency for International Development. Sources tell Reuters 60 career staffers have been put on leave after a memo warning employees to get in line with their America First policy or face disciplinary action. The threat comes after the president effectively put a freeze on U.S. foreign aid worldwide.

Humaira Pamuk is our Deputy Foreign Policy Editor. A lot of people at USAID are definitely on edge. One thing that a lot of humanitarians and people who work in this area have told me is just this abrupt and very blanket and wide freeze is really shocking. Because some of these programs, it's not like turning on and off a faucet.

Do we know who will be most impacted by this freeze? It's so broad. It basically creates chaos. Everyone's asking, all of the USAID sources, all of the State Department sources that I've been talking to, they are wondering, is my program part of this? There are a few exemptions. The exemptions are basically for Israel, for foreign military financing, same for Egypt. And you

yes, there is a waiver for emergency food programs, but those are not the only crucial programs. To stay ahead in fast-moving markets, you need to transform quality data into tailored, practical, and valuable intelligence. Access your choice of pre-built and market-validated models fast, and choose AI-powered analytics tools to suit your specific business needs.

For our recommended read, welcome to Reutersville. Our team have put together a gorgeous Reuters simulation of a cozy game.

A cozy game is defined by its easy, relaxing nature and constructive rather than destructive challenges. And recent research has shown that welcoming, cute, and low-skill video games could be an antidote to stress and anxiety. Go and read more and enjoy some constructive play by following the link below. For more on any of the stories from today, check out Reuters.com or the Reuters app.

Don't forget to follow us on your favorite podcast player. We'll be back tomorrow with our daily headline show.