DeepSeek, Tariffs and an Updated Home Page: The 3 Things We’re Watching This Week

This is a developing story.

You never know what tomorrow will bring, which was proven once again last week when a Chinese artificial intelligence (AI) company surprised the world with a powerful new AI platform. Plus, the impact of tariffs is on everyone’s minds. Let’s dig deeper into the three things we’re watching this week.

1. Is AI having its ‘Sputnik’ moment?

AI might use predictive algorithms to make informed guesses about future events, but even the most advanced technology couldn’t foresee the sudden arrival of DeepSeek in January. The Chinese-made AI model, which operates similarly to OpenAI and other U.S.-created platforms, claims to use fewer advanced chips and be less of a power-hog than other industry-leading models. Many see the release as China’s pushback against America’s AI prowess, much like the Soviet Union launched Sputnik 1 to compete with the U.S. The launch could potentially lead to the acceleration of AI spending as the leaders of both nations have declared this technology a top priority.

The launch of the DeepSeek app on the Apple Store – which quickly rose to the top of the download list – and its open-source model, which allows everyone to see exactly how the technology was built, is making many tech industry players and investors nervous. The news initially wiped out about US$1 trillion in stock market valuations¹ amid questions about how this new entrant might impact spending on AI. The impact was particularly felt by technology companies that have invested in this space and the sizable semiconductor operations supplying chips to the data centres powering much of AI’s capabilities today.

What we’re watching out for: The big question now is where does the race go from here? It’s still early to see how the U.S. players will respond, but Stargate, a joint venture between U.S. AI companies slated to funnel $500 billion into AI infrastructure by 2029 was recently announced, and the newfound competition could accelerate AI development even further.

2. Trump’s tariffs

Since President Donald Trump was elected for a second term, he’s talked nearly non-stop about not only making the Great White North the 51st American state, but also about instituting a 25 per cent tariff on all our products. Given that $3.6 billion of goods² cross the U.S-Canada border every day, these duties – and the counter duties Canada is imposing on $155 billion worth of American items – is expected to have a significant impact on both sides of the border.

Essentially, tariffs are taxes that importers of goods pay on items they bring into a country. Traditionally, they’re used by governments to encourage homegrown manufacturing (rather than paying more for importing, a company might source that good from a domestic company) or to punish a country for what the other locale deems unfair business practices (see Canada’s softwood lumber dispute with the U.S.). In this case, Trump says he wants to punish Canada for what he says is an unfair trade deficit (though this isn’t necessarily a bad thing³) and too many drugs being smuggled into America.

What we’re watching out for: If the tariffs are imposed, Americans may have to pay more for Canadian goods like automobiles, food and medicines, and Canadians will end up ponying up more for a variety of items, too. All of this could increase inflation – which central banks have been working so hard to tame over the last year – and cause larger problems for the economy as businesses try and create new supply chains or consumers stop buying goods because of higher prices⁴.

3. Cash breakdown by account is coming back… plus more homepage updates!

By now you might have had a chance to check out the new RBC Direct Investing home page. Coming soon, there will be a couple additional updates, for example, you’ll be able to see your cash breakdown at a glance. Plus, you’ll be able to choose which accounts to display. That means if you have Trading Authority, you’ll now be able to easily differentiate between your own accounts and those you manage using a drop-down menu.

You’ll also be able to customize your market snapshot to help you stay on top of market trends.

What we’re watching out for: “I travel often so something I’m really looking forward to is the new privacy mode, which will allow me to hide my portfolio values when I’m investing at an airport or in public.” – Client Experience Manager


Sources
^1. _{The Guardian, "'Sputnik moment': $1tn wiped off US stocks after Chinese firm unveils AI chatbot", January 2025}

^2. _{Government of Canada, "Canada-United States relations", February 2025}

^3. _{Bank of Canada, "The benefits of freer trade", January 2025}

^4. _{RBC Thought Leadership, "A playbook for how to measure a tariff shock in Canada", January 2025}