Chinese companies are leading the AI arms race. Chinese politician and computer scientist Lou Qinjian said as much, recently commending DeepSeek for their accomplishments: “DeepSeek adheres to an open-source approach and promotes the widespread application of AI technology globally, which contributes Chinese wisdom to the world,” he said. 

“Through the rise of companies like DeepSeek, we can see the innovation and inclusiveness of China’s technological development.”

In February, at the Artificial Intelligence Action Summit in Paris, US Vice President JD Vance made clear where the Trump Administration stands on artificial intelligence. He said that, first and foremost, the Trump administration will ensure that American AI technology remains “the gold standard” worldwide and that US companies remain the partner of choice for international companies and foreign countries. 

The Vice President argued that excessive regulation in the AI sector would kill the nascent industry, and that the administration would encourage pro-AI growth policies. “And I’d like to see that deregulatory flavor, making its way into a lot of the conversations at this conference,” he said. Vance also made it clear that AI should be free of ideological bias and that “American AI will not be co-opted into a tool for authoritarian censorship.” 

Finally, the Trump administration will safeguard a pro-worker growth path for AI so it can create jobs in the United States. Vance also brought up the notion of foreign adversaries weaponizing AI software to rewrite history, surveil users, and censorship. As Vance stated:

“This is hardly new, of course, as they do with other tech. Some authoritarian regimes have stolen and used AI to strengthen their military intelligence and surveillance capabilities, capture personal data, and create propaganda to undermine other nations’ national security.”

He warned conference attendees against partnering with such regimes. “From CCTV to 5G equipment, we’re all familiar with cheap tech in the marketplace that’s been heavily subsidized and exported by authoritarian regimes,” he said. “But as I know, and I think some of us in this room have learned from experience, partnering with them means chaining your nation to an authoritarian master that seeks to infiltrate, dig in, and seize your information infrastructure.”

Under the hood of DeepSeek

DeepSeek shocked global markets in January with low-cost models that made it seem like US companies were now behind in the AI arms race. The AI lowered the costs of developing reliable AIs, proving itself to be a powerful and cost-efficient open-source language model. 

It changed the way we view how much capital and computational resources are needed to develop AI.  Researchers across the Western world are now left playing catch-up, studying DeepSeek’s technical advances and social implications. 

There are clear benefits to DeepSeek. For instance, startups without the deep pockets of Google and OpenAI can now compete in the AI sector. AI models can do more with less in the post-DeekSeep world. The company claims it took a mere $6 million using 2,000 Nvidia H800 graphics processing units (GPUs) versus the $80 million to $100 million cost of GPT-4 and the 16,000 H100 GPUs needed for Meta’s LLaMA 3. 

The Hangzhou-based startup’s AI model employs reasoning capabilities that allow smaller models, whereas other AIs have had to employ larger models. It also uses reinforcement learning, eliminating the need for supervised fine-tuning. Moreover, DeepSeek’s multi-head latent attention (MHLA) mechanism decreases memory usage to 5%, down from 13%, in earlier AI methods. 

DeepSeek raises privacy concerns and questions regarding data-sourcing and copyright. DeepSeek is open-weighted, not open source. Open source models share the full source code and data, and open weight models share trained weights but not the code. Therefore, the exact source code used to train the models is not available. 

Due to DeepSeek’s open weight model, it is unknown what its sources are. This seems to be the way most AI companies operate. DeepSeek made public its R1 training and open weight models, which will allow other AI developers to copy and build on the model, but not its sources.

DeepSeek and geopolitics 

A race for AI dominance between China and the US has come into focus, while Russian capabilities on the matter remain a secret. Sberbank—Russia’s largest state-owned bank—has revealed its intentions to collaborate with Chinese researchers on AI projects. Russia and China, which share what they call a “no limits” strategic partnership, have long talked about AI cooperation—including in military applications—but little is publicly known about its depth or scope.

Sberbank, under CEO German Gref, once a Soviet-style former state savings bank burdened by onerous bureaucracy, is today one of Russia’s leading players in artificial intelligence. It released its GigaChat model in 2023. “Sberbank has many scientists. Through them, we plan to conduct joint research projects with researchers from China,” Sberbank First Deputy CEO Alexander Vedyakhin told Reuters. 

As the AI arms race heats up, the benefits of open source innovation come to the forefront. Little flowers bursting through the concrete all around the world, coming up with cool tech that is open-sourced and decentralized. 

Several startups at the intersection of AI, blockchain, and fintech announced funding rounds this week. Codex raised the most capital, filling its coffers with $15.8 million.

Dragonfly Capital led the seed round. According to Fortune, which first broke the news, the effort was part of a seed round with roughly $14 million coming from Dragonfly.

Coinbase and Circle also took part in the fundraising, alongside Cumberland, Wintermute and Selini Capital.

That was just one of several funding rounds announced in the past week. Read on for more.

Ultra

• Luxembourg-based multi-family office NOIA Capital led the round through its NOIA Digital Assets fund.
• This latest investment follows the appointment of Gus van Rijckevorsel as our the company’s new CEO

The9 Limited

• The9 secured a $8 million investment through private placement agreements with leading cryptocurrency investment funds Elune Capital, Fine Vision Fund, and Bripheno Pte. Ltd.
• The company will issue Class A common shares priced based on the average closing price over the past 30 trading days. The newly issued shares are subject to a statutory lock-up period.

Ambient

• Ambient, a project merging AI and blockchain to deliver fast, low-cost smart services, has raised $7.2 million in a seed funding round backed by a16z’s crypto accelerator and Delphi Digital.
• The project uses a Bitcoin-like proof-of-work mechanism for security and a Solana-style architecture for speed and scalability, positioning it as a promising player in AI-driven blockchain innovation.

Cambrian Network

• Cambrian Network, a decentralized AI finance protocol, has raised $5.9 million in a seed funding round led by a16z’s Crypto Startup Accelerator (CSX), with participation from Blockchain Builders and The Graph ecosystem angels.
• The funding supports Cambrian’s upcoming testnet and its involvement in the CSX 04 accelerator in San Francisco. Cambrian provides agents with real-time and historical financial data by integrating on-chain and off-chain sources, including social sentiment, to enhance decision-making. Its protocol lets developers balance speed and security by choosing between optimistic and verifiable data.

Mahojin

• Mahojin, an AI and blockchain integration project, has raised $5 million in a Series A funding round led by a16z Crypto’s CSX and Maelstrom Fund. The funding will support the development of open-source tools aimed at improving interoperability between AI and decentralized technologies.
• The company focuses on building AI-powered decentralized applications and is positioning itself as a key player at the intersection of open-source innovation and blockchain infrastructure.

Bittensor price rose sharply on Feb. 19 after crypto exchange Coinbase announced the listing of the native token of the decentralized artificial intelligence network.

As most altcoins registered notable gains in the past 24 hour period, Bittensor (TAO) spiked 20% to hit intraday highs of $420. These gains were modest compared to outperformers in the top 100 coins by market cap such as Story, Sonic, Aptos and Floki. However, with double digit gains, Bittensor ranked among the top performers. 

The performance saw TAO recoup losses it suffered in the past few days as alts mirrored Bitcoin’s struggles. With 20% upside, bulls wiped most of the accrued losses in the month-to-date period, returning to levels seen when Bittensor price reacted positively to AI news around DeepSeek.

Coinbase to list TAO

A dose of volatility saw Bitcoin rebound above $96,000 and XRP rise 6% amid news of Hashdex’s spot XRP exchange-traded fund approval in Brazil. Cryptocurrencies traded slightly higher as investors awaited the Federal Open Market Committee meeting minutes.

This, along with Coinbase’s upcoming listing of Bittensor on Feb. 20, helped push TAO higher.

In an announcement, the U.S.-based crypto exchange confirmed it would add trading support for TAO on the Bittensor network. The phased launch will offer trading with the TAO/USD pair.

“Trading will begin on or after 9AM PT on February 20 2025 if liquidity conditions are met. Once sufficient supply of this asset is established trading on our TAO-USD trading pair will launch in phases,” Coinbase wrote on X.

Bittensor’s price also soared earlier this month after the project released its Dynamic TAO whitepaper, outlining a major upgrade.

Does TAO listing on Coinbase matter?

Bittensor is a top AI token by market cap, currently the second-largest behind NEAR.  Notably, the native token is already listed on Binance, Kraken and other top exchanges. Coinbase listing is nonetheless key as it could give Bittensor further traction.

Besides, the project that launched in 2019 has received investment backing from some of the top venture capital players in the market, including Pantera Capital, Digital Currency Group and Lyrik Ventures.

Grayscale recently noted Bittensor is a crucial project in the AI space as its decentralized model can help increase transparency and democratize access.

According to Grayscale, this is key in the wake of projects such as DeepSeek. While these initiatives highlight the power and potential of open-source AI, the fact that they are centralized companies means there could be risks such as data security and embedded biases. A lack of transparency is another major concern.