AI Daily: Microsoft employees banned from using DeepSeek

Catch up on the top artificial intelligence news and commentary by Wall Street analysts on publicly traded companies in the space with this daily recap compiled by The Fly:

BANNED FROM USING DEEPSEEK: Microsoft (MSFT) employees aren’t allowed to use DeepSeek due to data security and propaganda concerns, the company’s vice chairman and president Brad Smith said in a Senate hearing on Thursday. “At Microsoft we don’t allow our employees to use the DeepSeek app,” Smith said, adding that Microsoft hasn’t put DeepSeek in its app store over those concerns. Smith said the restriction stems from the risk that data will be stored in China and that DeepSeek’s answers could be influenced by “Chinese propaganda.” DeepSeek is a Chinese-built large-language open-source model that claims to rival offerings from Microsoft-backed OpenAI’s ChatGPT and Meta Platforms (META) but using a much smaller budget. 

DOWNGRADED CHINA CHIPS: Nvidia (NVDA) intends to release a downgraded version of its H20 AI chip for China within the next two months, following U.S. export restrictions on its original models, Liam Mo and Brenda Goh of Reuters report, citing three sources familiar with the matter. The chipmaker notified its Chinese customers that it aims to release the modified H20 chip in July, two sources said. 

AI RESEARCH LAB: Meta Platforms has chosen Robert Fergus to lead its AI research lab, promoting an employee who helped begin the lab before working at competitor Alphabet (GOOGL), Riley Griffin of Bloomberg reports. Fergus co-founded the Facebook AI Research lab, known as FAIR, in 2024, which is tasked with Meta’s long-term AI research. 

CHIP CURBS: The Trump administration plans to rescind some Biden-era AI chip curbs in an effort to revise global semiconductor trade restrictions that have drawn strong opposition from tech companies and foreign governments, Stephanie Lai and Mackenzie Hawkins of Bloomberg report. The repeal of the AI-diffusion rule, which is not yet final, seeks to refashion a policy launched under President Joe Biden that created three tiers of countries for regulating the export of chips. The Trump administration will not enforce the framework when it takes effect May 15, people familiar with the matter told Bloomberg. Publicly traded companies in the space include AMD (AMD), Intel (INTC), Marvell (MRVL), Microchip (MCHP), Micron (MU), Nvidia, Qualcomm (QCOM) and Texas Instruments (TXN).