DeepSeek Prepares for IPO with $710 Billion Valuation, While IBM Loses $670 Billion in a Single Day and New York Shuts the Door on Mega Data Centers. The Capital Frenzy of AI and Its Cost are Settling at the Same Table.
1 | DeepSeek Prepares for IPO with $710 Billion Valuation
Chinese AI lab DeepSeek is preparing its IPO application, expected to be submitted as early as this year with a target of going public in 2027. The latest valuation is around $710 billion, a significant increase from two months ago. The listing venue may be in the Chinese A-share market or Hong Kong, China.
Half a year ago, DeepSeek's release of R1 stirred up the AI narrative in Silicon Valley. Now, it is transitioning from a technological disruptor to an official player in the capital market. With a valuation of $710 billion, it is approaching half of OpenAI's previous valuation. If the IPO is successful, it will be one of the largest new listings in the global AI field to date. Yesterday, Nous Research raised $1.5 billion at a valuation, and today, DeepSeek is preparing for an IPO with a $710 billion valuation. The pricing logic of open-source AI is being recalibrated by the capital market.
(Source: TechCrunch / Bloomberg / FT)
2 | IBM Loses $670 Billion in a Single Day, Revealing the Zero-Sum Game of AI Spending
IBM's stock price plummeted by 25%, marking the company's largest single-day drop in history, even deeper than Black Monday in 1987. The market value evaporated by about $670 billion in a day. Q2 revenue was $17.2 billion, approximately $660 million lower than market expectations. CEO Krishna stated that in the last few weeks of June, customers abruptly shifted quarterly capital expenditure to servers, storage, and memory, stocking up before expected price hikes.
IBM's collapse is not due to a reduction in AI investment; on the contrary, enterprise customers are reallocating the same budget from traditional IT services directly into AI infrastructure. On the same day, JPMorgan Chase and Goldman Sachs announced some of their best quarters ever. JPMorgan Chase's Q2 earnings per share were $7.70, a 47% year-over-year increase. Goldman Sachs reported earnings per share of $20.98, nearly doubling. Dimon said on the earnings call, "It's almost as good as it gets; we just don't know how long it can last." Winners and losers appeared on the same day.
(Source: CNBC / FT / Fortune / Yahoo Finance)
3｜NVIDIA H200 Begins Shipping to China as Chinese Chip Exports Near Double Under Regulatory Pressure
The U.S. government approved ZTE's purchase of NVIDIA H200 chips, adding to the list of approved companies including Alibaba, Tencent, and ByteDance. Deputy Secretary of Commerce Kelser informed Congress that the H200 has started shipping to China, but the actual quantity is "extremely limited." On the same day, Chinese customs announced that semiconductor exports in the first half of the year reached $177 billion, a 96% year-on-year increase, with the price surge of memory chips being a major driving force.
While shipments are scarce despite the open licenses, this indicates that Washington is still controlling the valve at the implementation level. However, the $177 billion export figure tells another story—China's chip industry is nearly doubling its exports under regulatory pressure. China's overall exports in June grew by 27% year-on-year, with a trade surplus of $125.6 billion. The simultaneous growth in AI-driven exports and the increased cost of imports due to the Iran conflict are reshaping the global trade landscape with both technology and war.
(Source: Tom's Hardware / CNBC / Reuters / Fortune)
4｜Trump Retracts Hormuz Toll within 24 Hours, But Ceasefire Is Dead
Less than 24 hours after announcing a 20% toll for the Strait of Hormuz, Trump backed down. He stated that Gulf countries will invest in the U.S. as an alternative to the toll. The United Nations Maritime Organization had previously ruled that the toll violated international law. However, the withdrawal of the toll plan is not a sign of easing tensions. On the same day, Iran launched missiles and drones at the Bahrain Juffair Air Base, and Iranian missiles hit two UAE oil tankers in Omani waters, causing one crew member's death. The U.S. military has resumed its naval blockade of Iranian ports.
The June CPI data was also released on the same day, showing a 0.4% month-on-month decrease, the largest monthly drop since 2020, with the annual rate falling from 4.2% in May to 3.5%. The main driver was a 5.7% plummet in energy prices. However, analysts warn that this data may be a temporary respite, as the oil price surge following the reignition of the Iran conflict has yet to be factored in. Just as inflation took a breather, the forces driving it up are back. (Continued from yesterday's report)
(Source: Al Jazeera / Axios / CNBC / CNN)
5｜New York Becomes First U.S. State to Ban Construction of Hyperscale Data Centers
New York Governor Hochul signed an executive order suspending the approval of new hyperscale data centers of 50 megawatts or more for a period of one year. This marks the first state-level ban on data centers in the U.S. The state government will also work to repeal data center tax breaks and require the development of a community investment framework within 60 days. 50 megawatts can power approximately 9,000 to 40,000 households.
New York currently has almost no data centers. This is not a case of fixing a problem after the fact but rather shutting the door before it opens. Hocu said, "New York will establish the strictest data center development standards in the country." On the same day New York hit the brakes, a report uncovered that Musk's Colossus 2 data center in Mississippi had installed 59 unauthorized natural gas turbines, emitting thousands of tons of pollutants affecting a Black community with high rates of respiratory disease. The AI infrastructure's pace has raced ahead of regulation and environmental carrying capacity. New York's ban and Mississippi's pollution are two sides of the same coin.
(Source: Fortune / Tom's Hardware / CNBC / NBC News)
Worth Knowing ↓
OpenAI's first hardware product is a portable screenless smart speaker. According to Bloomberg, the device features a built-in battery and camera, was developed with input from former Apple design chief Jony Ive's LoveFrom studio, and is expected to debut as early as the end of the year. OpenAI previously acquired hardware company io Products for around $6.5 billion.
(Source: Bloomberg / TechCrunch)
Multiple users have reported that GPT-5.6 Sol is autonomously deleting files. OpenAI disclosed this issue as early as June but has not yet addressed it. When a model's capabilities expand from generation to file system operation, the cost of failure behavior is on an entirely different scale.
(Source: TechCrunch)
DeepMind's Hassabis has proposed establishing a U.S. AI standards body akin to FINRA. This body would identify national security risks of cutting-edge models and develop deployment standards. He presented the proposal to multiple world leaders, including Trump, at the G7 summit.
(Source: FT / CNBC / The Economist)
SoftBank's Son believes the world needs $50 trillion in annual AI investment. He refuted claims of an AI bubble, stating that critics are "spitting into the wind." On the same day, the BIS warned that the five mega-scale cloud companies could spend over $1 trillion on AI capital outlays from 2025 to 2026, and if the returns disappoint, the boom could turn into a "prolonged investment slump."
(Source: Fortune / Bloomberg / BIS)
Meta is facing a lawsuit from 26 current and former employees, alleging that the company used AI tools to discriminate against disabled employees in layoffs. This is the first known collective lawsuit directly challenging the legality of AI in HR decisions.
(Source: Reuters / CNBC)
Fed Chair Powell testified before Congress for the first time, stating that AI investment is the "most significant feature of the current economy." He refused to disclose the interest rate direction, seeking to end the Fed's traditional practice of providing forward guidance to the market. The interest rate remains unchanged at 3.5%-3.75%. (Source: Fortune / Axios / CBS News)
12 states have filed a joint lawsuit to block the $81 billion merger between Paramount and Warner Bros., with California leading the charge. The California Attorney General stated that the deal would "eliminate competition," leading to price hikes and reduced content. (Continuation of yesterday's report) (Source: Fortune / Axios)
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