Good morning. We’ve got a great new excerpt from Bill Gates’ forthcoming book, Source Code: My Beginnings, on Fortune’s website today.
The book, one of an apparent trilogy (!) of memoirs by the Microsoft cofounder, comes out tomorrow.
My favorite line? “Writing software was just brainpower and time.” Still true, tbh. —Andrew Nusca
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Trump tariffs target loophole used by Chinese retailers
By now you’re almost certainly aware of President Donald Trump’s new trade levies against China, Canada, and Mexico.
What you might not know is that one of their goals is to close a loophole used by popular Chinese online retailers such as Alibaba, JD.com, Temu, and Shein.
The tariff exemption involved packages worth less than $800 and gave the Chinese companies a leg-up on domestic operations, from Amazon to dollar stores.
Trump’s latest executive orders directing 25% levies on Canada and Mexico and a 10% duty on China (on top of its existing duty) specify that this “de minimis” exemption no longer applies, according to a Bloomberg report.
(Does this apply to only new tariffs, or older ones as well? The White House has not yet clarified.)
How much product flows through the loophole? About $48 billion worth of shipments, from everywhere, in the first nine months of last year, according to U.S. Customs and Border Protection estimates. CBP counted 1.4 billion de minimis shipments into the U.S. in fiscal year 2024—double the total for 2022.
The Trump tariffs take effect on Tuesday. —AN
Amazon jumps on DeepSeek to capitalize on its cloud AI strategy
Amazon executives are using the explosion of interest in DeepSeek’s powerful R1 AI model as a sales pitch for Amazon’s cloud AI strategy—which, much like its online shopping playbook, rests in large part on a wide selection of products or services for customers to choose from.
R1’s out-of-nowhere rise is exactly the type of occurrence that AWS’ AI approach is built for, said AWS director Ankur Mehrotra. Amazon’s strategy from the outset was, “no one model will be sufficient to meet all customer needs,” he said in an interview with Fortune. “We’re seeing that it has proven to be true.”
A reality check will arrive Thursday when Amazon reports its fourth-quarter financial results. Last quarter, AWS posted its largest quarterly operating profit in its history even amid massive investments in Gen AI infrastructure.
As of last Thursday, AWS customers could start accessing R1 through AWS Bedrock Marketplace, which offers a choice of more than 100 foundation models. Other companies also offer access to the model, including Cerebras and Microsoft.
Mehrotra said it’s too early to know which exact business use cases DeepSeek’s R1 model will be most popular for. But R1’s unique “chain of thought” approach to reasoning means its responses aren’t always the fastest, and that may not suit certain applications.
Said the AWS exec: “It’s interesting the kind of trade-offs that are built into the model.” —Jason Del Rey
The bar for Intel isn’t lower, it’s on the floor
Intel’s investors aren’t even disappointed anymore.
The spiraling chipmaker has admitted that its big play in the AI chip space, Gaudi 3, isn’t seeing “meaningful” traction. And it’s cancelled that product’s successor, a GPU known as Falcon Shores, which is supposed to be a direct competitor to Nvidia’s market-leading GPUs, and which was supposed to come out later this year.
Falcon Shores will now just be used as an internal test chip, to try to build a compelling everything-you-need-in-a-rack bundle for when Jaguar Shores—the next generation on Intel’s GPU roadmap—pitches up.
Despite that, and despite reporting a revenue drop, Intel’s share price actually rose slightly. It’s now clear that no-one expects Intel to become a big AI player anytime soon, and expectations for its finances are generally low.
So who is going to right the ship, following the defenestration of CEO and company veteran Pat Gelsinger a couple months back? Good question. Intel has no news on Gelsinger’s replacement, though the search for that brave soul continues.
In the meantime, keep an eye out for AMD’s results on Tuesday, to see whether Intel’s old rival is having better luck taking on Nvidia in the AI data center. —David Meyer
More data
—OpenAI unveils Deep Research. AI agent for creating in-depth reports, available to ChatGPT Pro subscribers.
—Google's X incubator spins out Heritable Agriculture. Using AI to improve crop yields.
—Call center workers: Not worried about AI. Tech “not quite there yet,” say employees in the Philippines.
—Autonomous vehicle test miles down 50% from the previous year in California, per DMV.
—Apple asks court to halt Google search monopoly case. Maneuvers to be heard in a case where it’s technically a nonparty.
—Some FAA systems are a half-century old. Aging tech meets a lack of replacement parts and support.
—India expands Aadhaar, raising privacy concerns. The digital identity verification service uses biometric data for 1.4 billion people.
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