After DeepSeek Hysteria, The AI World Is The Same As It Ever Was

This column is a look back at the week that was in AI. Read the previous one here.

It’s been nearly two weeks since Chinese AI app DeepSeek rocked the artificial intelligence world, shaking up not just the public market but also the confidence of a lot of VCs who’ve built up massive AI portfolios.

But despite the panic last week, it‘s now starting to seem like nothing materially changed in the industry as money continues to pour in for AI — with the promise of even more.

By late last week, there was a report that SoftBank is looking to invest between $15 billion and $25 billion into OpenAI — just days after DeepSeek claimed to have created AI models that rival even those of the ChatGPT creator, but at much lower cost and using less energy.

OpenAI’s new round would value the AI giant at $300 billion — nearly doubling the $157 billion the company was valued at in October when it raised a $6.6 billion round led by Thrive Capital at a post-money valuation of $157 billion.

Not just OpenAI

SoftBank isn’t the only one still happy to pour billions into AI. Private equity giant Blackstone Group — which has invested tens of billions of dollars into data centers needed for AI compute — said last week in a post-earnings call that while it will watch developments with DeepSeek, it has no plans to pull back from the “very important segment.”

Just last year it was reported Blackstone — the world’s largest asset manager — plans to invest $8.2 billion to develop data centers in Spain. In 2023, it partnered with Digital Realty to develop $7 billion in data centers targeting providers of online content, cloud services and artificial intelligence. Blackstone also is a backer of AI infrastructure startup CoreWeave and just made a $300 million investment into data storage company DDN, valuing it at $5 billion.

Of course the DeepSeek news is far too recent for us to see if venture investors are pulling back from the space, but January’s numbers seem to indicate they have little desire to invest less money into AI — likely even if a foreign AI competitor gains some traction.

Last month, investors poured nearly $5.7 billion into AI-related startups, per Crunchbase data.

While it is true that is a steep decline from the past few months — November and December both saw more than $15 billion invested in such startups — January also lacked any massive rounds such as the ones raised by OpenAI and xAI late last year.

Nevertheless, last month’s total was still more than double the amount from January 2024, when only $2.6 billion was invested in AI startups.

In the public market, companies such as Nvidia are still down since the DeepSeek event, but that likely has at least a little to do with other political tensions, including President Trump’s tariff threats that roiled the exchanges.

While VCs we spoke with last week didn’t dismiss DeepSeek, they reminded us that it would be difficult for a Chinese app to gain significant traction in the U.S. without raising data concerns, and that’s especially true for the enterprise sector.

None of this is to downplay DeepSeek’s technology. While it seems unlikely that it was really created for less than $10 million, and there already have been questions about its accuracy and energy use, it certainly has made the AI world in the U.S. stop and take notice.

Still, the delirium DeepSeek’s arrival set off — not to mention talk of a mass extinction event for venture capital firms — seems both overblown and very unrealistic considering investors’ continuing appetite for all things AI.