US Tech Billions Respond to China AI Threat

WHAT’S INSIDE

• Tech In The News: Top news in tech, markets, finance and policy

• Companies to watch: Some of the top companies to watch this week

• Feature: Elon Musk’s “Smartest AI on Earth” Goes Live, GPT-4.5 soon!

• Buzzy Tools: Latest Buzzy tech, AI and financial tools

• Deep Tech: The latest in deep tech, biotech, futurism and more

• Space Tech: Latest news in the space race and aerospace tech

• Crypto: Blockchain and crypto policy and startups or protocols to watch

TECH IN THE NEWS

Trump-China Trade — President Trump signals an openness to new China trade negotiations after China’s Jiangsu halts US lithium processing tech exports.

Retail Weakness — US stocks fell sharply Thursday after Walmart projected sales slowdown due to consumer spending fears amid rising inflation and potential tariffs.

Housing Crisis Deepens — Foreclosure rates risk raise alarm in major cities (Dallas 39%, Houston 35.2%, Chicago 34.1%) as rents soar, affordable supply dwindles.

DOGE Stimulus Plan — Musk and Trump plan to discuss the DOGE proposal for $5,000 taxpayer checks funded by $2T in federal spending cuts.

IRS Downsizing — The IRS will lay off 6,000 employees under the hiring freeze, raising concerns about tax season staffing shortages, jobless figures.

DOD Cuts PLTR — Palantir stock fell 10% Weds on news CEO Alex Karp plans to sell $1B+ worth of his shares and potential DOD budget cuts. The company is up ~19x since 2022 lows.

COMPANIES TO WATCH

Thinking Machines Lab — Ex-OpenAI CTO Mira Murati has poached 30 researchers from competitors for a new stealth AI alignment venture.

Microsoft Goes Quantum — MS unveiled a palm-sized Majorana 1 processor fitting 1MQBs using a new design material, launched Muse, a Open-source Gen AI model for game development.

DeepSeek — The viral Chinese AI startup seeks its first external funding from Alibaba and state funds, pivoting to revenue focus with growing demand for low-cost models.

Figure AI — Helix AI model revealed, enabling humanoid robots to understand and manipulate household items via natural language with advanced dexterity.

Beta Technologies — Founder Kyle Clark pilots its first electric aircraft, pursuing both eCTOL/eVTOL with Air NZ, UPS, USAF partnerships while avoiding VC funding.

HOTTEST THING IN TECH
The US vs China AI/Tech Dominance Battle

The race for Global AI supremacy is no longer a slow burn; it’s an all-out sprint.This week, US tech giants have collectively laid out their next phase of aggressive AI expansion. This surge in investment follows VP JD Vance’s speech at the Paris AI Summit, where he reinforced Washington’s stance on technological dominance. The message was clear: AI leadership is no longer just about innovation—it’s about economic and geopolitical power.

A Billion-Dollar AI Binge

US tech firms have lined up a series of big-money AI announcements in response to mounting pressure from DeepSeek and the broader shift toward AI-powered automation. The biggest headline? xAI’s unveiling of Grok 3, accompanied by plans to expand its supercomputer factory even further. The company also announced it is venturing into AI-generated gaming, and science and physics with its upgrades.

Meanwhile, OpenAI disclosed an ambitious expansion blueprint, signaling heightened spending in its battle for dominance with a multi-billion-dollar effort to expand its infrastructure investments to accelerate research into AGI and invest in new AI-powered cloud models and hardware partnerships and even explore Open source AI. If you can’t beat ’em join ‘em.

Microsoft, which had already set aside $80B for AI infrastructure, revealed a huge quantum computing breakthrough with its new Majorana 1 quantum chip powered by a new design material. CEO Satya Nadella claimed the timeline for practical applications has shrunk from decades to mere years. As part of its AI push, it also launched Muse, a GenAI gaming studio aimed at disrupting interactive media.

Apple announced plans to boost its Vision Pro with AI features and a spatial content app. Apple was also rumored to be working on several projects in the robotics field recently.

Meta, already committed to a $40 billion AI infrastructure spend, revealed new details about its plans to expand Llama model development as it announced the upcoming LlamaCon conference for devs in its open source ecosystem. It also unveiled a new AI focus for its Reality Labs metaverse play as well as announcing a major investment into humanoid robotics for household chores. 

Nvidia, initially battered by the fallout of DeepSeek’s AI advancements, finally recovered to its pre-crash valuation this week, underscoring investor confidence in the resilience of US chipmakers. Meanwhile, reports indicate that the US is exploring a joint venture between TSMC and Intel to bolster American semiconductor capabilities, propelling Intel’s stock 38.5% higher over five days.

Trade War Escalates

As AI investment skyrockets, so do tensions between the US and China. Trade restrictions and reciprocal tariffs are now a central weapon in this battle, with both nations leveraging their supply chains as strategic assets.

China isn’t backing down over tariffs. In retaliation, Beijing enacted an export freeze on lithium processing technology, effectively tightening its grip on the global supply—a key resource for AI hardware, robotics and electric vehicles. The move has rattled Western markets, disrupting lithium extraction plans and threatening to stall America’s ambitions for AI-powered infrastructure.

The escalation may have been part of the reason Trump is now signaling a willingness to renegotiate trade terms, though details remain murky. Meanwhile, Trump is also making overtures to Putin’s Russia with a goal of reinvigorating trade with the other large global supplier of critical minerals as Ukraine peace talks continue.

The Other Side of The Great Firewall

On the other side of the tech war divide, China’s AI market is surging. President Xi Jinping’s rare meeting with Chinese tech executives this week has fueled speculation Beijing is preparing to ease regulatory restrictions after years of crackdowns on its tech sector. Investors have responded enthusiastically, with Chinese tech stocks rallying to multi-year highs.

Alibaba announced that it will increase investment in AI-powered cloud computing and e-commerce, following strong quarterly earnings. CEO Eddie Wu described AI as a once-in-a-generation economic opportunity, pledging to invest more in AI over the next three years than in the past decade.

China’s Lenovo also reported a 20% increase in quarterly revenue driven by demand for AI-powered servers and integration of DeepSeek's technology. The company aims for AI PCs to make up 25% of shipments by 2025, potentially reaching 80% by 2027.

Stateside, Acer just upped its US laptop prices by 10%, an early sign of the impacts of tariffs on US consumers and tech companies, that likely won't help US inflation.

New Infrastructure Player Threats

While Nvidia remains the AI chip leader, analysts warn that it could follow a trajectory similar to Cisco during the dot-com boom—where early dominance in infrastructure eventually ceded ground to specialized competitors. One of those challengers is Groq, receiving a $1.5B investment from Saudi Arabia this week for its Language Processing Units, which promise more efficient AI inference capabilities than traditional GPUs. Meanwhile, STMicroelectronics and AWS are developing photonic AI chips, designed to slash power consumption in data centers.

This is all great as these are US companies, but could China pull off the seemingly impossible, and end-run Nvidia with an innovative approach like DeepSeek to disrupt the entire paradigm of the chips and AI hardware game. Based on its past history with EVs, robotics and now gen AI, this seems more likely by the day.

The bottom line? The AI arms race isn’t just about technology—it’s about control over the future of the global economy. With billions at stake, US and Chinese companies are making high-risk, high-reward bets that will define the next decade of technological supremacy. Whether the US can maintain its edge—or if China’s decentralized, open-source AI approach and hardware innovation and supply chains ultimately wins out—remains the trillion-dollar question.

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BUZZY TOOLS 
Buzzy Tech Tools To Watch & Use

Apple — iPhone 16e budget model at $599, custom 5G modem and AI features.

IBM — Enterprise AI Integration Services, prebuilt process automation templates.

ElectronX — $10M raised for intraday electricity trading platform.

Google — New AI tool to accelerate scientific research processes.

Rabbit — Android agent demo controls apps, shows R1 device capabilities.

Superhuman — AI Auto Label for email categorization and inbox management.

Spotify/ElevenLabs — Spotify accepts AI-narrated audiobooks for publishing.

DEEP TECH
The Latest Technology & Trends To Watch

STM Photonics — AWS-partnered data center chip for faster, efficient transceivers.

Quasicrystals — Hidden order in impossible crystals enables info encoding.

MS Quantum — Claims of first topological qubits met with physicist skepticism.

Evo 2 — Bio model trained on 9.3T DNA pairs predicts genetic variations.

Brain Decoder — AI translates thoughts to text for aphasia patients.

SPACE_RACE

—Rocket Lab_Launches 5 IoT satellites with 3D-printed engines

—IN-SPACe_New fund offers 60% backing for Indian space tech startups

—NASA Cuts_1,750+ jobs at risk amid budget uncertainty, Artemis concerns

—Nokia Moon_First lunar 4G network planned for Intuitive Machines mission

CRYPTO WATCH

Digital Asset Outflows — CoinShares reports first ETP outflows in 19 weeks at $415M, ending streak that accumulated $29.4B, as Bitcoin dipped below $94K.

Trump Memecoin — Arthur Hayes claims the token will revolutionize political engagement and funding transparency through Web3 integration.

LIBRA/MELANIA Investigation — Hayden Davis and Kelsier Ventures face allegations over $4.5B LIBRA token crash after President Milei's distancing; investigations ongoing.

Meteora Crisis — CEO of the Solana launchpad Ben Chow resigns amid LIBRA token collapse and insider trading allegations; independent investigation launched as company maintains compliance.

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