Bubble Burst

Hi ZipLawyer! Today’s Memo:

• DeepSeek bursts AI bubble
• Tesla fights EU
• Euro IPO market comeback
• RPC leads on data claim
• Clyde, NRF advise on energy deal

DeepSeek bursts AI bubble

Move over, ChatGPT—there’s a new AI in town. Chinese start-up DeepSeek released R1, its latest large language AI model, last week. This generative AI chatbot has matched the performance of models from OpenAI, Anthropic, and Meta—despite being developed at a fraction of the cost and time.

Why It Matters

DeepSeek’s launch, coupled with its rapid rise to the top of Apple’s App Store, triggered a tech stock sell-off. The Nasdaq fell 3%, and Nvidia, the chipmaker powering AI models, plunged 17%, losing $600 billion in market value.

Sam Altman praised DeepSeek’s achievement on X, calling it “impressive” but vowed OpenAI would deliver even better models. The real shock lies in DeepSeek’s ability to rival AI giants like OpenAI, Anthropic, Google, and Meta with a fraction of their budgets, raising questions about the sustainability of the industry’s massive investments in AI development.

Tesla vs EU

Tesla is revving up its legal engines against the EU, filing a lawsuit to challenge anti-subsidy tariffs on Chinese-made EVs. The EU slapped duties of up to 37.6% on Chinese electric vehicles in 2023, citing unfair subsidies, while Tesla’s exports face a more modest 8% rate. With this move, Tesla joins Chinese automakers like BYD and Geely in a growing courtroom battle over Europe’s protectionist measures. It’s Tesla vs. the EU—watch this space for sparks to fly.

IPO Comeback

European IPOs are gearing up for a comeback in 2025, with over 370 venture-backed firms eyeing public listings—a 24% jump from last year, according to PitchBook. Thanks to higher valuations and calmer market conditions, the UK is leading the charge, with pharma and software sectors poised for strong activity. Even if some firms hold off, the projected €53 billion in IPO valuations signals a healthy recovery. After years of delays, Europe’s IPO market might finally be ready to shine again.

RPC leads on Data Dispute