DeepSeek drops a major new reasoning model that rivals o1

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The US is trying its best to restrict chip exports to China, but Chinese labs seem to be holding up just fine against their American rivals for now. A new open-source reasoning model from DeepSeek appears to match OpenAI’s o1 at a tiny fraction of the cost. But OpenAI may have a surprise of its own in the waiting that could be days away.

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Today’s Insights

• Today in AI: DeepSeek’s new reasoning model, Trump scraps Biden AI order

• Tutorial: How to replace clothes in a picture with AI

• OpenAI’s new agentic tools could be coming this month

• Everything else you should know today

• 5 new AI tools to boost your productivity

TODAY IN AI

1. DeepSeek springs surprise with open-source model that matches OpenAI’s o1: The Chinese AI lab, which has built a reputation in recent months for its open-source alternatives, just dropped another surprise — a new open reasoning LLM called DeepSeek-R1.

• DeepSeek-R1 beats o1 across math, coding and reasoning benchmarks. Unlike o1 though, R1 is 100% open-source and bags an MIT license, meaning it can be used commercially without restrictions.

• R1 uses reinforcement learning (RL) and supervised fine-tuning to sharpen its reasoning and fact-check itself, avoiding many of the pitfalls that trip up other models. It’s also a lot lighter on the wallet — 95% cheaper than o1.

• The researchers behind the model claim that they observed the model having an ‘AHA’ moment at one point — it invented an advanced reasoning technique entirely on its own.

• Wharton professor Ethan Mollick thinks R1’s raw chain of thought "really reads like a human thinking out loud”.

2. Trump axes Biden’s AI executive order on Day 1: The new President wasted no time scrapping Biden’s AI executive order — a major regulatory reset for the industry. The move eliminates several regulatory requirements imposed on AI companies by the Biden administration, including mandates to share safety test results and other critical information with the federal government. While it’s still unclear what comes next, many expect Trump to take a much lighter approach to AI regulation.

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THE AI ACADEMY

How to replace clothes in a picture with AI

• Go to the Pic Copilot website and log in with your account.

• Now click on ‘Virtually Try On’ on the home page.

• Choose ‘Clothing Types’, upload an image, and click on ‘Confirm upload’.

• Now select the model and then click on ‘Create Now’.

• Wait for a few seconds and you’ll get an AI model wearing your uploaded clothes.

FROM THE FRONTIER

OpenAI’s new "agentic" tool could launch later this month — according to leaks

Agents have been all the talk this past year — and we may finally get a taste this month. According to reports, OpenAI’s long-rumored Operator tool is just a few days away. Here’s what to expect:

• Tibor Blaho, a software engineer known for previous AI leaks, claims to have found hidden features labeled “Toggle Operator” and “Force Quit Operator” in OpenAI’s macOS ChatGPT app.

• Operator is supposed to be an “agentic” AI system that can autonomously handle complex tasks. According to a previous Bloomberg report, Operator will be capable of automating tasks such as writing code and booking travel for users.

AI systems that can take actions on behalf of users are a major step up in capabilities. We’ve seen companies like OpenAI and Anthropic show off powerful demos last year. Now it’s time to see whether these products can live up to their hype.

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AI & TECH NEWS

Everything else you need to know today

📥 Smart Sort: For its latest update, the macOS Mail app is getting plugged with Apple Intelligence to help it sort emails into categories.

🤖 Windows Whisperer: Microsoft is testing AI-powered search for Windows 11, letting users find local files by using more casual language. It works offline thanks to built-in NPU chips, but is only available for Copilot Plus PCs.

✂️ Red Tape: The UK is looking to streamline its public sector using AI assistants and a new set of AI tools, codenamed 'Humphrey' to boost civil servant workflows and cut bureaucracy.

🎬 Digital Drama: Oscar hopeful 'The Brutalist' featured a cameo by AI to help with Hungarian dialogue and create budget-friendly visuals. With AI still a hot-button issue in Hollywood, this has sparked backlash online.

📱 Reel Deal: American tech giants are looking to cash in on the uncertainty around TikTok’s future in the US. Bluesky just rolled out a custom feed for reels, with a similar update from X expected in the next couple of days.

PRODUCTIVITY

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Zain’s Recommendations

📖 Book: I recently finished reading Genghis Khan and the Making of The Modern World. The Mongol Empire was the first to implement a meritocracy on a civilizational scale and its effects shaped the world we live in today. Excellent read with many timeless lessons.

📚️ Course: I'm taking part in The CEO Accelerator this week to level up my company-building and management skills. It's taught by my good friend Eric Partaker who advises Fortune 50 companies and was recognized as the CEO of the Year. You can join me in the next cohort that starts tomorrow.

🎧️ Podcast: The Caesar Augustus episode on How to Take Over the World. I went in expecting a tale of heroics but turns out that the man who built the Roman Empire was likely a bit of a coward who always got conveniently sick before every battle. An interesting listen about the life of one of history's greatest men.

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AI-GENERATED IMAGES

Product Photography

Midjourney Prompt: Product photography and commercial posters show a Boboli perfume bottle placed on a board, with tree roots and dry wood in front. The background is off white with a large mirror next to the bottle. This photo was taken with a Canon EOS R5 camera and an RF600mm F2.8 L IS USM lens. It has a cinematic feel, with soft lighting --ar 4:3 --stylize 250

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Zain & the Superhuman AI team