OpenAI, Microsoft and Google prove again, nothing’s consistent in the world of AI
In late December, before the DeepSeek bombshell dropped on Silicon Valley, OpenAI had said the o3 reasoning model will be ready to ship within a few weeks.
If this is where we are at barely a month into the year, I have absolutely no doubt the AI landscape will effortlessly evolve into a completely different sphere another 11 months compared to how we assess it now. In late December, before the DeepSeek bombshell dropped on Silicon Valley, OpenAI had said the o3 reasoning model will be ready to ship within a few weeks. And it has, with the o3-mini now available inside the ChatGPT app available to free tier users too, as well as an API for developers. There is a promise that the O3-mini is 24 percent faster than o1-mini, and of course, will deliver more accurate answers.
A lot has happened over at Microsoft too, and the partnership with OpenAI is in focus. First, Microsoft security researchers indicated that OpenAI’s models were used by DeepSeek in some method to train their own impressive R1. This is a point I’ll stay on for a bit. Ironic that it is only now that OpenAI and other AI companies may be realising that using someone else’s work for training their AI models, isn’t cool. As cool as they perhaps thought it was earlier, when the boot was on the other leg. It wasn’t a minor blip either. Multiple lawsuits authors and book publishers, content creators, news organisations, comedians, musicians and music publishers, visual artists and celebrities.
Days after that happened, Microsoft went on to confirm that the DeepSeek R1 will be available on Copilot+ PCs — the prescribed chronology is PCs with Qualcomm Snapdragon X chips will get it first, followed by those powered by the Intel Core Ultra 200V chips.
Secondly, Microsoft is also adding OpenAI’s o1 reasoning model to Copilot users. There is no need to pay an extra ₹2,000 for the Copilot Pro subscription. Or for that matter, a ChatGPT Plus subscription. Think Deeper is the branding umbrella for this integration (Microsoft says it’ll consider a query from more than one angle and perspective). I’ll let you more about what it can or cannot do in the weeks ahead (using a Windows PC requires considerable realignment in life, which I often delay as much as possible).
Speaking of an AI race, it seems Silicon Valley is sticking to its idea of an investment intensive methodology. Alongside Fiscal Year 2025 results, Alphabet Inc. CEO Sundar Pichai outlined plans “to invest approximately $75 billion in capital expenditures in 2025” for AI innovation. As someone said, the more things change, the more they remain the same.
FOCUS
Apple’s financial year works a little differently. They’ve just announced numbers for the first quarter of 2025. Turns out, it was a December-quarter record, on the back of robust sales across the product lines to make up for the slight dip in global iPhone sales. iPad sales are up. Mac sales are up. A long-standing faith in services, continuing to pay off. That said, India as a market bucked this trend and Apple reported strong iPhone sales in the country.
My big takeaway, something I wrote about after the earnings call ended, was Apple CEO Tim Cook reemphasising that Apple is “particularly keen on India”. It is a continuing chapter, though certain sections of the online chatter (you may have seen such commentary) would have you believe otherwise. Pricing of the iPhone 16 series which bucked generational inflation was a big affirmation. How many Android phone makers have been able to manage this?
“It’s the second largest smartphone market in the world and the third largest for PCs and tablets, and so there’s a huge market, and we have very modest share in these markets, and so I think there’s lots of upside there, and that’s just one of the emerging markets,” he said about India. In just the past few weeks, the Apple Store app joins the Apple India online store and the two Apple Stores in Saket and BKC, as another retail touchpoint. On that point, Cook confirms four new Apple Stores will open doors for customers this year. There is a lot that remains to be written about India’s importance for Apple.
Worry? In perhaps the most substantive change in its AI Principles since they were first published in 2018, Google has apparently removed its pledge to not “design or deploy” AI tools for anything to do with weapons or surveillance tech. Instead, thats been replaced with “responsible development and deployment.” Nothing is ever as it seems?
REACTIONS
The Union Budget 2025 had a lot, in the expectation of taking forward India’s digital economy, the digital footprint and the sort of incentives that’d help with the next phase of innovation. Startups in particular will draw benefits from a multi-pronged approach that the government hopes will fuel innovation, widen the startup ecosystem with the eventual benefit of job creation. A new ₹10,000 crore Fund of Fund, higher credit availability for startups as well as lower guarantee fee for 27 sectors, are key developments. Deep tech too, will see an FoF in the coming months. AI push will see more spending, including on education. Does that mean India will emerge with a DeepSeek-esque development soon? Unlikely, but the critical groundwork is being laid for the future. We have the reactions from the industry, about all things tech in this budget.
“The Union Budget 2025-26 marks a pivotal step in accelerating India’s leadership in technology and AI. The establishment of three AI Centres of Excellence with ₹500 crore, coupled with plans to explore a Deeptech Fund of Funds, addresses critical gaps in infrastructure and applied research, building on the momentum of initiatives like the IndiaAI Mission” - Apurv Agrawal, CEO and Co-Founder, Squadstack.
“The government’s decision to allocate ₹500 crore for setting up a Centre of Excellence on AI in the education sector marks a significant step towards leveraging technology to transform learning. This initiative underscores the potential of technology to create immersive and future-ready classrooms, and we remain committed to driving innovation in this space to support the evolving needs of educators and students” - Pankaj Jha, Managing Director of MAXHUB India.
“Key reforms in the logistics sector, such as Bharat TradeNet, will streamline processes, reduce bottlenecks, and enhance transparency, improving efficiency for quick-commerce and e-commerce. Support for the Make in India initiative will drive domestic manufacturing, further boosting demand for tech-driven logistics. The push for AI-driven solutions in predictive analytics and route optimization will further enhance supply chain efficiency” - Ashish Sikka, Chief Strategy Officer of Ecom Express Limited.
“With AI becoming an essential tool for a tech powered economy, it is heartening to see the introduction of Centers of Excellence (COE) for Artificial Intelligence in education. To position India as a leader in the global AI race, it is imperative to prioritize investment in STEM talent” - Aparna Iyer, CFO, Wipro Limited.
“The establishment of a National Manufacturing Mission aligns perfectly with our 'Make in India' initiative, ensuring that we provide the necessary policy support and frameworks for industries of all sizes. As India moves forward, our commitment to supporting domestic industries, embracing digital advancements, and fostering climate-friendly growth remains unwavering” - Pradeep Bakshi, MD & CEO, Voltas Limited.
“The decision to increase the basic customs duty on interactive flat panel displays is a crucial step in addressing the inverted duty structure. This move will foster local manufacturing and support the growing demand for advanced educational technologies, ultimately enhancing innovation in learning environments. The establishment of a Centre of Excellence for AI in education with a ₹500 crore investment is another vital step towards preparing our youth for future challenges” - Rajeev Singh, Managing Director, BenQ India and South Asia
“The drop in Basic Customs Duty (BCD) from 2.5% to 0% on parts of the panel is a welcome move, though it should be noted that there is only one facility in India with limited capacity to process these parts. This change will primarily benefit that facility and those sourcing from it. The ongoing reliance on imported open cells, due to a lack of local manufacturing capacity, remains a critical challenge” - Arjun Bajaj, Director, Videotex.