DeepSeek AI Startup Shakes U.S. Tech Giants (Full Transcript)

Speaker 1: Have you heard about this yet? An artificial intelligence startup out of China has U.S. big tech in a little bit of a panic. It's called DeepSeek. In fact, on Wall Street, tech stocks took a tumble. Investors, fearing the newcomer, could upend the artificial intelligence craze and end the domination of AI companies in the United States like NVIDIA and OpenAI. So a lot to talk about here. Let's bring in CBS News Money Watch correspondent, Kelly O'Grady. So Kelly, what is this thing called DeepSeek and why does it have big tech titans trembling today?

Speaker 2: I like that alliteration, Reid. I'm gonna steal it, big tech titans trembling. So look, this is a AI startup and over the weekend, they released sort of an AI model that turns out to be nearly just as good as the ones that we are seeing in the U.S. from OpenAI and Google's Gemini. And the reason why it has tech titans trembling is that the company says they were able to do this for far less money and with far less power. So they say that in order to create this model that is on par with the ones that we've seen in the U.S., it only took $6 million compared to $100 million to a billion dollars that it has taken to create some of these other models in the U.S. And they were also able to do it without much access to these high-powered chips. And again, that's according to them. We haven't been able to verify that. That's the information that the company is putting out. But the reason why you are seeing chip stocks like Nvidia and Micron take a tumble is if you are able to produce these high-powered AI models without using those chips, then that really puts a damper on their potential business. Broaden out from what's going on with the market, I think there's a lot of concern also what this could mean for China's ability to develop a very sophisticated AI-driven military defense technology. So there's a market aspect to this, a tech aspect to this, and a national security aspect to this as well, Reid.

Speaker 1: So fascinating to watch. Okay, so from tech titans trembling to the TikTok on TikTok, and I've now cashed in every one of my tea alliterations. Today, let's talk about the future of TikTok, if we will. We're hearing a potential buyer could give the U.S. government a 50% stake in the company. A U.S. government 50% stake. What is that headline about today?

Speaker 2: So this is a bid that was put forth by Perplexity AI. It's an AI search company that's trying to compete with the likes of Google and OpenAI. And they have proposed a merger where ByteDance investors would still retain a piece of the pie, if you will. And when the company goes public years down the line, the U.S. government would actually get 50% of this company. Now, this would just be for the U.S. operations of TikTok. Bear in mind, there is precedent for the U.S. government to own a portion of a public company. We have seen that with Fannie Mae and Freddie Mac, but this is raising concerns because there is not any detail around that proposal available of whether that would also translate to a say in operations, to a say in strategy. And of course, this is a free speech platform. So certainly there is precedent, but for this type of company, this would sort of be the Wild West. But again, we don't have the details around whether they would be a silent partner or they would actually have involvement. And this is just a proposal at this point, Reid.

Speaker 1: Okay, we know you'll be watching that one. Another question, tax season begins today. One campaign promise President Trump is going to try to deliver on, and that's tax breaks for all Americans. Now that he's in office, what do you see? Can he deliver on that in the first six months, a year, or is this going to be a long game sort of a situation?

Speaker 2: So this is going to be one of the first things that he's going to be trying to do because the 2017 tax cuts that he enacted under his first administration, they are expiring this year. And so that is going to be something that the House and Senate are tackling. Where this becomes tricky is that in order to extend those, you're going to add somewhere around 4 trillion to the national debt over the next 10 years. Of course, cutting some of that debt has been a priority for the president. And so when you extend tax cuts, you have to get revenue somewhere else. And so that's really going to be the tension. The president has looked at tariffs as a potential revenue generator, but that also, of course, gets passed down to the consumer in terms of essentially the inflation tax, if you will. So he does have a Republican Senate and House in terms of getting those tax cuts extended, but it's going to be really tricky in terms of how they navigate the revenue loss portion of it.

Speaker 1: Dotting her I's and crossing every one of those T's. Kelly O'Grady, Money Watch correspondent. Nice to have you with us. You have a great day, friend. We'll see you back here on 24-7 tomorrow.