Copy of DeepSeek’s Long Awaited Release Falls Short of Expectations; China Unwinds Meta’s $2Bn Acquisition of Manus AI; & OpenAI Reneges On Exclusivity Deal With Microsoft
- Dipo Owolabi
- 5 hours ago
- 5 min read
The latest headlines show four very different versions of power at work: AI capability, Chinese regulatory control, industrial earnings, and the corporate rules shaping the OpenAI-Microsoft alliance. DeepSeek’s new V4 model is cheaper and more mature, but still not enough to erase the U.S. lead in frontier AI; China has blocked Meta’s $2 billion Manus takeover; China’s industrial profits are rising even as the Iran war adds pressure to the economy; and OpenAI and Microsoft have rewritten their partnership so OpenAI can push more freely into the market while capping what it owes its longtime backer. All this and more in today’s Read It And Eat! |
Markets Around The World
Introducing YTD
YTD means 'year‑to‑date' – it’s the simplest way to see how an asset has performed since January 1. Below you’ll find the YTD returns for the key indices we track: the American S&P 500, the UK’s FTSE 100, South Korea’s KOSPI, Nigeria's NGX, and other commodities. And next to them are the YTD numbers for our own RIAE Portfolios; the custom‑built portfolios designed to put our investment philosophy into practice.
Markets as of 27th April 2026.. Cells in RED mean that the value is down, cells in Green mean the value is up.
MAJOR HEADLINES
DeepSeek’s Long Awaited New Model (V4) Fails To Meet Expectations
DeepSeek finally returned with a preview of its new V4 model, a release that had been widely watched because the company’s earlier low-cost systems had rattled assumptions about China’s AI progress. Reuters says the model was adapted for Huawei chips, underscoring China’s push for tech autonomy and its attempt to reduce dependence on Nvidia hardware. DeepSeek said the Pro version outperforms other open-source models in world-knowledge benchmarks, trailing only Google’s Gemini-Pro-3.1 among closed-source rivals.
Even so, the new release did not deliver the kind of leap that would meaningfully tighten the race with the United States. Bloomberg reported that V4 costs less than many alternatives to use, but “doesn’t meaningfully narrow the US lead in AI capabilities,” while Reuters said the latest version is an improvement but still sits among leading open-weight models rather than clearly surpassing rivals like Kimi and Qwen. That matters because the earlier DeepSeek shock had forced a global reassessment of how far Chinese AI could move under chip restrictions.
The market response reflects that shift in expectations. Reuters said the reaction to V4 was muted, showing how quickly the surprise factor has faded even as DeepSeek continues to push cheaper, more efficient models. The company has also been cutting prices, offering developers a 75% discount on V4 Pro through May 5, which keeps it competitive on cost even if it is still not winning the capability race outright. In short, DeepSeek is still an important Chinese AI story, but it is no longer the disruptive market shock it was a year ago. MSN
China Blocks Meta’s $2 Billion Manus Takeover
China has blocked Meta’s acquisition of Manus, the Singapore-based AI startup with Chinese roots, and ordered the parties to unwind the deal. AP reported that the National Development and Reform Commission, China’s top planning body, issued a one-line statement saying the foreign acquisition was prohibited and that all parties had to withdraw from the transaction. Manus is known for a general-purpose AI agent that can autonomously handle tasks like coding, market research, and budgeting.
The move matters because Meta had viewed Manus as a way to strengthen its AI platform strategy, and the deal had already been publicly framed as part of its broader push into agentic AI. AP said Meta had told regulators there would be no continuing Chinese ownership and that Manus would stop operating in China, but Beijing still moved to block the transaction after reviewing the national-security and technology-transfer implications. The commission gave no detailed explanation, but the decision was clearly tied to fears about advanced technology leaving China’s control.
The timing adds a geopolitical edge. The decision came less than a month before President Trump’s planned trip to Beijing to meet Xi Jinping, and analysts told AP it sends a hard signal that China is willing to use its approval power aggressively in AI-related deals. Meta said the transaction complied with applicable law and that it expected an appropriate resolution, but the episode is likely to chill similar cross-border acquisitions involving Chinese deep-tech assets. CNBC
China’s industrial firms reported their fastest profit growth in six months in March, with profits rising 15.8% year on year, according to Reuters. For the first quarter, industrial profits were up 15.5%, after a 15.2% gain in January-February, and the broader economy grew 5% in Q1. The improvement gives policymakers something to point to as they try to manage an uneven recovery while energy markets remain under pressure from the war in Iran.
But the recovery is far from uniform. Reuters said China’s export engine stuttered last month, while retail sales and industrial output cooled, even as producer prices finally emerged from a years-long deflationary stretch. That combination can help margins for some firms, but it also means higher input costs are returning at a time when demand is still fragile. The gains were also uneven across sectors, with AI-linked and high-tech manufacturers standing out far more than consumer-facing names.
That is where the Iran war becomes economically relevant. Reuters said analysts warn the conflict could raise energy and shipping costs, squeeze margins, and pressure export-heavy industries that already face weak domestic demand and intense price competition. The recovery may therefore be real, but it is not yet sturdy enough to ignore external shocks. China’s industrial data says growth is improving; the war says the cost environment could still turn against it quickly. Reuters |
OpenAI Changes The Terms Of It’s Exclusivity Deal With Microsoft
OpenAI and Microsoft have rewritten one of the most important partnerships in AI, ending Microsoft’s exclusive right to sell OpenAI’s models and opening the door for OpenAI to work more freely with other cloud giants, including Amazon. Reuters says Microsoft will remain OpenAI’s primary cloud partner and keep access to OpenAI’s intellectual property through 2032, but the old exclusivity framework is gone. OpenAI will also continue paying Microsoft a 20% share of revenue through 2030, though that payment is now subject to an undisclosed cap.
The change is a major strategic shift because it gives OpenAI much more room to expand its enterprise business while reducing the dependence that once defined the relationship. Reuters and AP both note that OpenAI can now serve customers across rival clouds, and Amazon has already said OpenAI models will soon be available directly on AWS. Microsoft, meanwhile, no longer pays OpenAI a share of its own revenue for hosting OpenAI models on Azure, which suggests the deal is being reshaped to give both companies more flexibility rather than lock either one into old constraints.
On the market side, Microsoft’s stock did not take a dramatic hit. Reuters said shares initially fell 1.3% after the announcement but closed largely unchanged, showing that investors saw the deal more as a structural reset than a direct threat to Microsoft’s earnings power. The broader takeaway is that the partnership is no longer exclusive, but it is still deeply connected: OpenAI gets freedom to grow, Microsoft keeps a primary role, and both companies are positioning for a more competitive, multi-cloud AI market. CNBC
Minor Headlines
|
Comments