The Rundown - OpenAI Accuses DeepSeek of Data Theft, Trump Media Expands into Financial Services

Episode Date: January 29, 2025

Stock market update for January 29, 2025.

Public.com presents the rundown. Your daily market update in five minutes. My name is Zadadmani, and today is Wednesday, January 29th. In today's episode, we preview the Fed meeting. The markets are expecting no rate cuts. We might get a curveball from Jerome Powell. We also recap earnings from Starbucks and ASML and tell you why OpenAI is accusing Deepseek of stealing their data.

Then stick around to the end of the show to find out why Chili's is thriving right now. All right, let's go. Well, the stock market had a nice bounce back on Tuesday, thanks to a surge in tech stocks. The S&P 500 was up nearly 1% and the NASDAQ was up 2%. Tech stocks got annihilated on Monday because of Deepseek, but it looks like a lot of you guys bought the dip, especially Nvidia. Invideo stock was down 17% on Monday, but it jumped back 9% on Tuesday. By the way, Amazon and Meta both closed at record highs yesterday.

I feel like that's not getting a lot of attention right now. I think investors are realizing if the cost of AI goes lower, which is what Deepseek showed, that could be good for Meta and Amazon's business. We're actually going to hear more from Meta tonight as they report earnings after the market close. I'm sure they're going to be talking about AI. We're also going to be getting earnings from Microsoft and Tesla. So we got an action-pack day today.

Speaking of which, we also have a Fed meeting this afternoon. The Federal Reserve is going to make a decision on interest rates right now. The markets aren't expecting rate cuts at this meeting. You know, the last couple jobs reports have been pretty strong, indicating a strong labor market. and inflation is still slightly above the Fed's 2% target. So the Fed has no urgency to cut rates. But then there's the Trump question.

President Trump made a comment last week that he would ask for rates to be lowered immediately. So we'll see how Jerome Powell responds to that. I'm sure he's going to get a lot of Trump questions in the press conference today. And I think investors want to know what the Fed's plan is moving forward when it comes to rates. I think the markets are going to be hanging on every one of his words. I'll definitely be watching the press conference. It starts at 2.30 p.m. Eastern time today in case you guys want to watch it too. But if for some reason you don't want to watch Jerome Powell talk for an hour, then don't worry,

I'll recap the best parts of the press conference in tomorrow's episode. So just make sure to tune in for that. Let's run through some headlines. And we got some more drama with Deepseek. OpenAI is accusing Deepseek of stealing their data. OpenAI's partner, Microsoft, notice individuals potentially connected to Deepseek scrapping heavy data sets from OpenAI's API during the fall of 2024, according to Bloomberg. Open AI was alerted of the data polls, and they confirmed to the financial times that DeepSeek was behind it.

OpenAI told the financial times that they've seen evidence of distillation from Deepseek. Now, without getting too technical, distillation takes the output from a large AI model and distills it down to make it more capable and more efficient. So DeepSeek was taking the output from Open AI's model to train their own AI model, which is against OpenAI's terms of services. That's why OpenAI thinks that DeepSeep was able to make such a high-performing AI model at a fraction of a cost as OpenAI's model. Now, I think it's funny that Open AI, of all people, are complaining about stealing people's data given that they train their models on other people's data without permission.

But you know what? We'll rant about that on another episode. Now, what's interesting is that other high-performing Chinese AI apps are coming out of the woodworks. Alibaba recently released a new model called Quinn 2.5 Max, which supposedly outpaces Deep Seek's capabilities. Maybe Alibaba stole data from Open AI and Deepseek. Maybe we're just going to have AI companies steal one another's models until we have AGI. That's where all this is headed, right?

Let's shift gears and talk about Starbucks. They reported earnings last night, and their sales continued to decline. The Coffee Giant reported a same store sales drop of 4% in Q4. That's the fourth consecutive quarter of the company has seen same store sales drop. Now, Starbucks is in the middle of a turnaround. They hired a new CEO, Brian Nickel, over the summer. and he's working to revive Starbucks's brand. He has a plan called Back to Starbucks.

Over the past few years, Starbucks coffee quality has declined, and each location just feels like a hollow shell dedicated to mobile orders. But Brian Nicol wants to make things like they used to be. He wants to bring back the condiment bar. He wants to start using Sharpies again to write the names of customers on the cup, even though your name's probably not going to be spelled right, but that's part of the experience, you know? The company also announced that they're planning to block non-paying customers from the stores.

So if you want to use the bathroom at Starbucks, you got to buy an overpriced coffee. Nicol also announced plans to cut menu items by 30% and to separate mobile orders from store purchases via an ordering algorithm. Don't know what that means, but we'll see how that all plays out. Brian Nicol has a lot of work to do to turn things around. Sales in North America are down 4%. Sales in China are down 6%. Profits were also down 24% last quarter. He's only been at the job for four months. But I think in a couple quarters, investors are going to want to see some signs of a turnaround.

investors seem somewhat hopeful shares of Starbucks are up around 5% this morning in reaction to these earnings. And let's quickly talk about Apple. They are teaming up with SpaceX. Apple is launching emergency service texting via SpaceX's Starlink satellites. iPhones with T-Mobile plans will be able to text via Starlink satellites if they're in an area with no service. The emergency service is currently in beta for texting only, but SpaceX wants to expand to data and phone calls as well. Now, Apple currently has a deal with Global Star for their satellite services, but, SpaceX is an added service on top of that. SpaceX requested beta approval to start Monday, and the FCC granted the company approval to launch services fully in November.

Let's talk about some stocks making moves today. Shares of ASML are surging after the semiconductor manufacturer assured investors of strong demand for AI chips in the future. DeepSeek really pulled chip demand into question after claiming they built a strong AI model with a few million bucks compared to the billions of dollars being spent by American tech companies. Well, ASML, a company that makes machines needed to build AI chips, said lower cost could be a demand driver for chips due to the possibility for more application. ASML reiterated that its 2025 annual sales guidance and the company's net booking grew nearly 170% from the previous quarter.

So investors are pretty excited to hear that, and shares are up more than 7% this morning on this news. Trump Media is back in the news, ticker symbol DJT. Their shares are surging as they expand into financial services. The company is going to launch a financial service and fintech brand called Truth.Fi, which will join a portfolio that houses Truth Social, which is Donald Trump's preferred social media platform. And there's also Truth Plus, which is a video streaming platform. I don't think I've ever heard of Truth Plus before, but they haven't. Now, this finance division will start with $250 million in funding that will be allocated to ETFs, crypto, and other investment vehicles.

What's interesting is this news comes one day after Elon's ex-platform announced it would venture, into financial services through a deal with visa that's going to allow peer-to-peer payments. So Elon wants to turn Twitter into Venmo. Shares of DJT are up more than 9% this morning in reaction to this news. Now, on the flip side, shares of Lending Club are down more than 20% this morning

after the lending company issued soft, forward-looking guidance. On top of that, consumer loan origins decelerated to 13% in Q4, down from 23% a year ago. So not good for Lending Club. Let's wrap the show with the, fun fact. If Chili's was a country, it would be the third largest buyer of tequila in the world, only behind the U.S. and Mexico. Chili's has been surging lately. Their parent company Brinker International

stock is up 10% today after raising their full year guidance and reporting same store sales at Chili's warping 31%. And a lot of that has to do with Chili's margaritas. Chili sells about 22 million margaritas a year. I feel like Chili's has really cracked the marketing code. You know, they have that iconic baby back ribs jingle, and they're crushing it on advertising with catchy promos like The Three for Me, which the company says help fuel 20% traffic growth in the recent quarter. There's a chili, he's about two miles away from where I live, and I'm not going to lie, I try to go there at least once a month.

Well, all right, guys, that's the rundown for today. Hope you guys enjoyed today's episode. Next couple episodes will be action-pack. We're going to be recapping the Fed meeting tomorrow. We're going to be recapping earnings from Meta, Microsoft, and Tesla. So tomorrow's episode is a must listen. If you're new here, it gets subscribed to the podcast. If you enjoyed today's show, consider giving us a five-star rating on Apple or Spotify.

Leave us a comment on Spotify, vote in today's Spotify poll. All that engagement really does help us out and it helps other people find the show. Thank you guys so much for listening. Shout out to Mike and Connor for all the help behind the scenes. And we'll see you guys back here tomorrow. This is the rundown. Your real-time resource for news events and trends in the markets. All views presented in the show reflect the opinions of the guests.

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