Source:

  • Reuters, Published on February 10th, 2025.

By Mike Scott

Summary

  • DeepSeek challenges assumptions about AI market and raises new ESG and investment risks
  • Efficiency gains significant – similar results being achieved with less computing power
  • Disruption fuels doubts over Big Tech’s long-term AI leadership and market valuations
  • China’s lean AI model also casts doubt on costly U.S.-backed Stargate project
  • Analysts see DeepSeek as a counter to U.S. tariffs, intensifying geopolitical tensions

February 10 – The launch by Chinese company DeepSeek, opens new tab of its R1 reasoning model last month caused chaos in U.S. markets. At the same time, it shone a spotlight on a host of new risks and challenged market assumptions about how AI will develop.

The shock has since been overshadowed by President Trump’s tariff wars, opens new tab, but DeepSeek is set to have lasting and significant implications, observers say. It is also a timely reminder of why companies and investors need to consider ESG risks, and other factors such as geopolitics, in their investment strategies.

“The DeepSeek saga is a fascinating inflection point in AI’s trajectory, raising ESG questions that extend beyond energy and market concentration,” Peter Huang, co-founder of Openware AI, said in an emailed response to questions.

DeepSeek put the cat among the pigeons by announcing that it had developed its model for around $6 million, a thousandth of the cost of some other AI models, while also using far fewer chips and much less energy.

Camden Woollven, group head of AI product marketing at IT governance and compliance group GRC International, said in an email that “smaller companies and developers who couldn’t compete before can now get in the game …. It’s like we’re seeing a democratisation of AI development. And the efficiency gains are significant as they’re achieving similar results with much less computing power, which has huge implications for both costs and environmental impact.”

The impact on AI stocks and companies associated with the sector was severe. Chipmaker Nvidia lost almost $600 billion in market capitalisation after the DeepSeek announcement on fears that demand for its chips would be lower, but there was also a 20-30% drop in some energy stocks, said Stephen Deadman, UK associate partner at consultancy Sia.

As Reuters reported, power producers were among the biggest winners in the S&P 500 last year, buoyed by expectations of ballooning demand from data centres to scale artificial intelligence technologies, yet they saw the biggest-ever one-day drops after the DeepSeek announcement.

One reason for the massive sell-off was the timing – no-one was expecting such a breakthrough, nor for it to come from China. But DeepSeek also upended the prevailing narrative of how AI would develop, and who the winners would be.

Tom Vazdar, professor of cybersecurity and AI at Open Institute of Technology (OPIT), pointed out in an email that it called into question the premise behind the Stargate Project,, opens new tab a $500 billion joint venture by OpenAI, SoftBank and Oracle to build AI infrastructure in the U.S., which was announced with great fanfare by Donald Trump just days before DeepSeek’s announcement.

“Stargate has been premised on the notion that breakthroughs in AI require massive compute and expensive, proprietary infrastructure,” Vazdar said in an email.

There are also dangers in markets being dominated by such a small group of tech companies. As Abbie Llewellyn-Waters, Investment manager at Jupiter Asset Management, pointed out in a research note, the “Magnificent Seven” tech stocks had accounted for nearly 60% of the index’s gains over the previous two years. The group of mega-caps comprised more than a third of the S&P 500’s total value in December 2024.

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ChatGPT Action Figures & Responsible Artificial Intelligence
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You’ve probably seen two of the most recent popular social media trends. The first is creating and posting your personalized action figure version of yourself, complete with personalized accessories, from a yoga mat to your favorite musical instrument. There is also the Studio Ghibli trend, which creates an image of you in the style of a character from one of the animation studio’s popular films.

Both of these are possible thanks to OpenAI’s GPT-4o-powered image generator. But what are you risking when you upload a picture to generate this kind of content? More than you might imagine, according to Tom Vazdar, chair of cybersecurity at the Open Institute of Technology (OPIT), in a recent interview with Wired. Let’s take a closer look at the risks and how this issue ties into the issue of responsible artificial intelligence.

Uploading Your Image

To get a personalized image of yourself back from ChatGPT, you need to upload an actual photo, or potentially multiple images, and tell ChatGPT what you want. But in addition to using your image to generate content for you, OpenAI could also be using your willingly submitted image to help train its AI model. Vazdar, who is also CEO and AI & Cybersecurity Strategist at Riskoria and a board member for the Croatian AI Association, says that this kind of content is “a gold mine for training generative models,” but you have limited power over how that image is integrated into their training strategy.

Plus, you are uploading much more than just an image of yourself. Vazdar reminds us that we are handing over “an entire bundle of metadata.” This includes the EXIF data attached to the image, such as exactly when and where the photo was taken. And your photo may have more content in it than you imagine, with the background – including people, landmarks, and objects – also able to be tied to that time and place.

In addition to this, OpenAI also collects data about the device that you are using to engage with the platform, and, according to Vazdar, “There’s also behavioral data, such as what you typed, what kind of image you asked for, how you interacted with the interface and the frequency of those actions.”

After all that, OpenAI knows a lot about you, and soon, so could their AI model, because it is studying you.

How OpenAI Uses Your Data

OpenAI claims that they did not orchestrate these social media trends simply to get training data for their AI, and that’s almost certainly true. But they also aren’t denying that access to that freely uploaded data is a bonus. As Vazdar points out, “This trend, whether by design or a convenient opportunity, is providing the company with massive volumes of fresh, high-quality facial data from diverse age groups, ethnicities, and geographies.”

OpenAI isn’t the only company using your data to train its AI. Meta recently updated its privacy policy to allow the company to use your personal information on Meta-related services, such as Facebook, Instagram, and WhatsApp, to train its AI. While it is possible to opt-out, Meta isn’t advertising that fact or making it easy, which means that most users are sharing their data by default.

You can also control what happens with your data when using ChatGPT. Again, while not well publicized, you can use ChatGPT’s self-service tools to access, export, and delete your personal information, and opt out of having your content used to improve OpenAI’s model. Nevertheless, even if you choose these options, it is still worth it to strip data like location and time from images before uploading them and to consider the privacy of any images, including people and objects in the background, before sharing.

Are Data Protection Laws Keeping Up?

OpenAI and Meta need to provide these kinds of opt-outs due to data protection laws, such as GDPR in the EU and the UK. GDPR gives you the right to access or delete your data, and the use of biometric data requires your explicit consent. However, your photo only becomes biometric data when it is processed using a specific technical measure that allows for the unique identification of an individual.

But just because ChatGPT is not using this technology, doesn’t mean that ChatGPT can’t learn a lot about you from your images.

AI and Ethics Concerns

But you might wonder, “Isn’t it a good thing that AI is being trained using a diverse range of photos?” After all, there have been widespread reports in the past of AI struggling to recognize black faces because they have been trained mostly on white faces. Similarly, there have been reports of bias within AI due to the information it receives. Doesn’t sharing from a wide range of users help combat that? Yes, but there is so much more that could be done with that data without your knowledge or consent.

One of the biggest risks is that the data can be manipulated for marketing purposes, not just to get you to buy products, but also potentially to manipulate behavior. Take, for instance, the Cambridge Analytica scandal, which saw AI used to manipulate voters and the proliferation of deepfakes sharing false news.

Vazdar believes that AI should be used to promote human freedom and autonomy, not threaten it. It should be something that benefits humanity in the broadest possible sense, and not just those with the power to develop and profit from AI.

Responsible Artificial Intelligence

OPIT’s Master’s in Responsible AI combines technical expertise with a focus on the ethical implications of AI, diving into questions such as this one. Focusing on real-world applications, the course considers sustainable AI, environmental impact, ethical considerations, and social responsibility.

Completed over three or four 13-week terms, it starts with a foundation in technical artificial intelligence and then moves on to advanced AI applications. Students finish with a Capstone project, which sees them apply what they have learned to real-world problems.

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Riccardo Ocleppo Tells TEDx Why He Created OPIT
OPIT - Open Institute of Technology
OPIT - Open Institute of Technology
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In May 2025, Riccardo Ocleppo, founder of the Open Institute of Technology (OPIT), gave the audience at TEDx Parma in Italy an insight into why he created OPIT, a new type of university that is quickly becoming essential in preparing students for an increasingly technological future.

Meet Riccardo

Although Riccardo graduated from Politecnico di Torino with a bachelor’s in electronic engineering in 2006 – followed by a master’s degree in 2008 – he felt unprepared for the challenges he felt he had to face as a professional. He sought to expand his vision by completing the master’s program at the London School of Business.

While studying in London, Riccardo became focused on how he could help other students optimize their studies and ensure they were properly prepared for their futures. This resulted in the creation of Docsity, an international online community where university students could exchange study materials to prepare for exams.

Docsity has grown into a global community with 15 million registered students. Moreover, it partners with over 250 universities and business schools worldwide that interview students and provide that information to educational organizations to help them refine their offerings. This experience of working as a conduit between students and universities shaped Riccardo’s understanding of the higher education sector’s needs, eventually leading to the creation of OPIT.

The Challenges Facing Higher Education

In his TEDx talk, Riccardo asked the Parma audience to imagine themselves on their first day of university – sitting in their classroom as their professor explains the concepts that they will learn over the coming years, designed to prepare them for the future.

But, he asked, how long will the skills in your curriculum be relevant? In the past, the skills learned at university would last someone for the rest of their professional lives. But today, with technology changing faster than ever, we have reached the point where we can’t accurately predict what technologies we will be using in five years. It is even more challenging, he said, to predict what kind of knowledge children sitting in classrooms today will need when they reach adulthood.

The inability to predict the skills that students will need in the future or adapt courses quickly enough to include those skills is why many university degrees are no longer fit for purpose, Riccardo explained. Instead, he stated, they are preparing students for a destination that will no longer exist when they graduate while pushing them over a road with a constantly moving target destination.

Building OPIT

With these challenges and his experiences from Docsity in mind, Riccardo set to work designing the kind of education he wished that he had received. He set out to create a university that would allow learners, at any stage in their career, to adapt and reinvent themselves for the changing world. The result was OPIT, which matriculated its first students in 2023.

With that in mind, OPIT courses are built around three pillars.

Pillar One: Bridging Theory and Practice

Universities often produce students with excellent theoretical knowledge of a subject area but with limited ability to apply that knowledge to real-world problems. It is how Riccardo felt about his knowledge and skills when he completed his electronic engineering degree.

OPIT degrees, on the other hand, are designed to provide students with not only a strong technical foundation but also an understanding of and the ability to develop real-world applications.

The OPIT faculty, recruited from some of the world’s leading businesses, play a central role in achieving this. Instead of relying on polished case studies published years after the fact, they use real-life workplace challenges as teaching tools.

Faculty members include practitioners and thought leaders from some of the world’s biggest tech companies, including Zorina Alliata, Principal AI and Generative AI Strategist at Amazon; Khaled Elbehiery, Senior Director and Network Engineer at Charter Communications; Andrea Gozzi, Head of Strategy and Partnership for the Digital Industries Ecosystem at Siemens; and Sabya Dasgupta, Lead Solution Architect at Microsoft.

For MSc programs, students complete this focus on application with the final Capstone Project, which encourages them to apply their knowledge to the real world through an industry internship.

Pillar Two: International and Multidisciplinary

As well as recruiting professors with an international and multidisciplinary profile, OPIT seeks to do the same with the cohort – people working in diverse fields and looking for ways to leverage the same technology to improve what they do. The diversity of the student profile helps break down both educational and industrial silos, encouraging multidisciplinary thinking and unexpected innovation. It can also give students a greater level of cultural awareness, which they may not have encountered before.

Courses involve online meetups between peers, allowing them to share challenges and learn through application. OPIT also hosts online events that allow students to connect with leaders from companies such as Morgan Stanley, PayPal, and Microsoft, to learn about the professional world today and forge networks for the future.

Pillar Three: Education That Fits Your Life

The third pillar of OPIT is that education should be flexible and fit into your life, rather than require you to put the rest of your life on hold to study. This is especially important for established professionals who want to adapt or reinvent themselves but don’t have the luxury of walking away from their work and other responsibilities for a few years to do so.

This is why OPIT courses are online by design – or “remote first,” as many companies brand it. This not only allows students to build study into their existing lives but also to develop experience working remotely as part of a distributed team, which are essential skills in today’s work environment.

OPIT Courses

Today, criteria such as “data literacy” and “comfortable working with AI” are often at the top of job descriptions. With these and other necessary skills in mind, OPIT launched with a BSc in Modern Computer Science and an MSc in Applied Data Science and AI.

Since then, they have also initiated a BSc in Digital Business and MSc degrees in Digital Business and Innovation, Responsible Artificial Intelligence, and Enterprise Cybersecurity. The first cohort of students celebrated their graduation ceremony on March 8, 2025.

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