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Powerful New Chinese AI Tech Shocks Experts, Disrupts Markets; Displaced Palestinians Return To Devastated Northern Gaza; Trump Fires Inspectors General From Over A Dozen Agencies. Aired 1:30-2p ET

Aired January 27, 2025 - 13:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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[13:31:24]

BORIS SANCHEZ, CNN HOST: Breaking news to CNN. U.S. tech stocks took a dive today in response to the rollout of the Chinese A.I. startup, DeepSeek, which is taking the tech industry by storm.

The tech-heavy NASDAQ has been dropping for much of the day, currently down 700 points. A.I. chipmaker, Nvidia, a giant, is also plummeting. You see it there down a whopping 17 percent.

Investors are rattled because DeepSeek says it made a surprise announcement -- a surprising advancement, allowing it to match the capabilities of it's far more famous and well-known artificial intelligence rivals but at a fraction of the cost.

Let's discuss with Lance Ulanoff. He's editor-at-large for TechRadar.

Lance, thanks so much for being with us.

How is DeepSeek different than OpenAI or some of these other A.I. companies? How did they make these advanced models at a fraction of the cost with inferior chips?

LANCE ULANOFF, EDITOR-AT-LARGE, TECHRADAR: Well, we're taking them at their word. We don't -- you know, it's a bit of a black box. They've certainly presented -- about a month ago, they presented this app.

So they have a chat bot. And it works about as well, and sometimes a little bit better than, for example, ChatGPT from OpenAI.

They say they spent $5.6 million to train their models, which, by the way, sounds like a lot of money, except when you look at the billions of dollars that have been spent and that are going to be spent to train the models from U.S. companies.

Meta said they're going to spend like $50 billion, $65 billion. There's a $500 billion investment that's happening from the White House, the U.S. government with OpenAI to build Stargate.

So all of this money flooding in, and then along comes a company from China that says, by the way, we use cheap chips. We've spent barely any money, and we made just as good A.I. But again, you know, first of all, we barely tested this thing. We

don't really know if it's that much better. And second of all, we don't really know how they're training their A.I.

SANCHEZ: So you're skeptical not only of the performance of the DeepSeek models, but also the methods by which the company says it got there. Is that fair to say?

ULANOFF: Yes, that's fair to say. And, you know, TechRadar has actually done some tests, some early tests. But if you can get in. We managed to get into DeepSeek and we found, yes, in a couple of cases, it did. It did a little better. It certainly has some parity with those.

So if we're just judging it on its A.I. capabilities, you know, like good job, you guys. But again, I want to understand, how did they train this? Which chips did they use? And what did they really spend?

SANCHEZ: I wonder what the implications are not just for the A.I. industry, as we see stocks taking a dip, but also for U.S. national security if China begins to outpace American A.I. companies.

ULANOFF: Well, so what's really interesting to me is that, you know, it's a Chinese company and everybody's jumping to use it. And this has none of the protections, for example, that TikTok built so we could use that app in the U.S. and it's already struggling to not be banned.

In this case, if you go to the app store and you download that app, one of the things you'll notice is, under DeepSeek, it's -- its Chinese language because this is pure play, a Chinese app, which means no protections.

The Chinese government, any prompt you put in there, they can see it. Any information you give, they keep and it's open to them. So there are significant implications here. And don't expect this app to survive.

SANCHEZ: Important to point out, it was asked some sort of a politically sensitive, you could say, questions and the app apparently responded with CCP propaganda.

Do you think it's models could be used as a vehicle for Beijing to advance it's agenda?

[13:35:04]

ULANOFF: Yes. I mean, again, that has a lot to do with the interplay. You know, these are conversational A.I.s, right? So it's a question you ask and the results you get.

And certainly, you know, because they want -- you know, this is a -- any company that operates in China has to open its data, open all of the work it does to the Chinese government.

So certainly, they want to control the answers that you get. So they could certainly send out Chinese propaganda. How much that affects the people using it, I really don't know.

SANCHEZ: Lance Ulanoff, we have to leave the conversation there. Appreciate you sharing your expertise with us.

ULANOFF: My pleasure.

SANCHEZ: Brianna?

BRIANNA KEILAR, CNN HOST: A magnitude 3.8 earthquake struck the coast of Maine this morning. Shaking could actually be felt as far away as Boston.

The quake was centered seven miles southeast of York Harbor in Maine. And the U.S. Geological Survey says, while earthquakes are unusual along the east coast, they are not unheard of, obviously.

Today, also, the first day that the IRS will start accepting and processing your tax returns. As usual, the deadline to file, though, is April 15th. But if you live in a federally declared disaster area, as so many are this year, you'll likely be granted an extension. So keep that in mind.

And depending on what state you live in, you may be eligible to file for free by filing directly with the IRS. For more information, head to the IRS Web site.

And the matchup for football's biggest game now set. The Kansas City Chiefs pulled off a narrow 32 to 29 win over the Buffalo Bills, while the Philadelphia Eagles dominated the Washington Commanders 55 to 23. Not so narrow.

It's going to be the second time in three years that the powerhouse teams will be facing off in the Super Bowl.

And coming up, after more than a year of conflict, thousands of displaced Palestinians are returning home to a devastated northern Gaza. We're going to bring you some of these emotional moments ahead.

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[13:41:26]

KEILAR: Tens of thousands of displaced Gazans are now returning to what is left of their homes in northern Gaza after spending months in temporary camps while Israel attacked Hamas.

CNN obtained video showing a huge convoy of people walking, carrying baggage, children and animals. Some of them traveling in cars, most of them not.

It's a journey that began early this morning after Israel opened a corridor into the northern section of the battered enclave as part of the ceasefire agreement.

But this is the destruction that they're returning to, communities that are completely uninhabitable, destroyed by war. And it's this devastation that prompted President Trump to make a

controversial statement about the fate of the Palestinian people.

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DONALD TRUMP, PRESIDENT OF THE UNITED STATES: And we just clean out that whole thing. Its -- you know, it's -- over the centuries, it's had many, many conflicts, that site. And I don't know, it's -- something has to happen. But it's literally a demolition site right now. Almost everything is demolished.

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KEILAR: For more on Trump's comments and the mass exodus into northern Gaza, let's bring in CNN Jerusalem correspondent, Jeremy Diamond.

Jeremy, I wonder how Israeli officials are responding to Trump's proposals and how it's being received by Palestinians.

JEREMY DIAMOND, CNN JERUSALEM CORRESPONDENT: Well, Brianna, far-right Israeli lawmakers, like Bezalel Smotrich, the finance minister, and the former national security minister, Itamar Ben Gvir, they are welcoming these comments by President Trump with open arms.

And that's because they've been advocating for exactly the same thing for months and months now. For them, it's with the aim of Israel ultimately settling the Gaza Strip, something that the former -- the Biden administration opposed ardently, which we haven't heard the Trump administration weigh in on yet.

And ultimately, what Trump is saying here is, indeed, taking a page from the right wing in Israel. It raises questions about the mass displacement of Palestinian people. It also raises questions even about notions like ethnic cleansing.

And while Trump is saying here that, you know, it would be about incentivizing people to -- to leave and go to other countries, that he even suggested that it could even be long term.

What is important to note here is that this is being roundly rejected by the two countries that he mentioned would potentially take in these Palestinians, and that is Egypt and Jordan, who have both long rejected, even before Trump's comments, any notion of displacing Palestinians out of Gaza.

And in hearing from Gazans today, and in seeing these pictures of people, tens of thousands of people returning to northern Gaza, you can very quickly understand why the Palestinian people of Gaza would not be interested in moving elsewhere.

And that's because you can see the connection and the resolve they have to staying on their land after months and months of -- of war and misery. Several of them, when asked about these comments today by some of our journalists working in Gaza, made very clear that they would not leave the Gaza Strip. And when you look at these images that you see today, we've seen tens

of thousands of Palestinians returning to the northern part of the Gaza Strip, some of them after more than a year of being displaced from there.

But ultimately, what they are returning to in northern Gaza is enormous levels of destruction. Many of them, as they were making this journey from the southern part of the Strip where they've been displaced back to northern Gaza, said that they didn't know if their homes were even still standing, but they wanted to go and see it with their own eyes.

[13:45:00]

What we've also witnessed today are these emotional reunions between family members, some of them who have been separated for months on end as a result of these operations in northern Gaza -- Brianna?

KEILAR: Jeremy Diamond, thank you so much for that report from Tel Aviv. We do appreciate it.

And coming up, a late-night firing spree, President Trump removing more than a dozen federal watchdogs across the government. I'll be joined live by one of those inspectors general to discuss, next.

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[13:50:09]

SANCHEZ: As of today, nearly all of the federal governments largest agencies are operating without independent oversight. President Trump fired more than a dozen inspectors general over the weekend, including at the Departments of State, Energy, the Interior, Defense, Transportation, the list goes on.

This purge paves the way for Trump to install his own people for independent watchdog roles. And it apparently violates federal law, which requires the White House to give Congress 30-days' notice and substantive rationale for terminating any inspector general.

Our next guest was among those fired by President Trump. Hannibal "Mike" Ware headed the Council of the Inspectors General on Integrity and Efficiency.

Mike, thank you so much for being with us.

First, I want to get your thoughts on President Trump's response to questions about these firings.

Let's listen to this sound byte.

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TRUMP: It's a very common thing to do. Some people thought that some were unfair or some were not doing the job. And it's a very standard thing to do. UNIDENTIFIED REPORTER: Do you plan to bring your own people in those

positions, Mr. President?

TRUMP: Well, they're not my people. I don't know anybody that would do that. But we'll put people in there that will be very good.

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KEILAR: He says some were unfair, some were not doing their job.

HANNIBAL "MIKE" WARE, FORMER INSPECTOR GENERAL, FIRED IN TRUMP PURGE: Right. So I'd like to make it clear that I am not in opposition to the president in terms of the president's right to remove a sitting inspector general that's been appointed by the president, confirmed by the Senate.

There's just a way that we go about this to ensure that there is fairness in the process and that our independence is maintained.

That is why the act was strengthened just two years ago, to make it clear that 30-days' notice, along with a compelling reason, a good reason for removal be provided.

What was provided said that we were being removed due to "changing priorities" of the administration.

Well, I.G.s are not a part of the administration by design. Our role is overseeing how the administration carries out its priorities in accordance with the law.

SANCHEZ: So would you say that you do not challenge the presidents assertion that, as a president, he has the authority to install or put up for confirmation inspectors general that share his views?

WARE: Well, no, I'm not saying that. Well, he could install whoever he chooses as long as it's in accordance with the act, which says that it has to be demonstrated proficiency in specific categories like law, like audits, like investigations and everything else.

The issue is, by completely gutting all the -- the -- basically almost all the I.G. shops of their leadership, demonstrates that the independence is being completely removed, that people who are viewed as more like loyalists are being put in position.

And even if that's not the case, the way that this is done, without a proper notice and with a clear statement that is due to "changing priorities" of the administration, an administration, no I.G. has anything to do anything with, really muddies the water in terms of I.G. independence.

SANCHEZ: Yes. As you noted, not all the I.G.s were fired. Do you see a pattern in these 18 that he removed?

WARE: I don't see any -- any pattern. There is no pattern.

SANCHEZ: So essentially it was just haphazard? WARE: I wouldn't say that anything the president does is haphazard.

I'm definitely not going that far.

SANCHEZ: Sure, sure.

WARE: But I would say that, from what we have looked at as a community, we can't see a reason. And I'll explain why.

You have some of the highest, strongest performing I.G.s among this group. For myself, in the last five years alone, there's more than a 50-times return on investment from what we found.

Over the past five years, we've returned, fiscally, to the Treasury close to $40 billion. And we have -- we've -- we've -- thousands of -- of arrests, thousands of ongoing investigations. We have done a stellar job.

That is the -- that is the case with almost all the I.G.s that have been removed. These people have stood on business. They've done their job in a fair and balanced way that have done wonders for our country.

SANCHEZ: I'm curious to get your thoughts on, first, what Republican Senator Lindsey Graham said about this. He says that he believes that Trump "technically violated the law," but he argues that the president had the authority to do that.

[13:54:59]

I imagine that the council is now preparing for some kind of a legal fight. I wonder who adjudicates it. What do you think the arguments might be?

WARE: Well, that -- that is not what the council is after. The council is really not after any type of legal fight or legal battle, right, at this time. What we're after is just a simple adherence to -- to the law.

I.G.s don't operate in a technically right, technically this or that, environment. We operate straight down the middle. The act is what the act says.

And this is not a technicality. If you're allowed to determine what pieces of the I.G. Act, you will follow the entire act means nothing.

Because where does it stop? I didn't have to give notice to Congress as required by the act, so I don't have to give full and complete and unfettered access to the records in the agency.

Next, I get to determine which investigations you work and which investigations you don't. We might as well not have an act if that's the case.

SANCHEZ: Mike Ware, we have to leave the conversation there. We look forward to having you on again as this process plays out. Thanks for joining us.

WARE: Thank you very much. Appreciate it.

SANCHEZ: Straight ahead, President Trump is expected to sign a series of executive orders that could reshape the face of the military, including banning transgender servicemembers altogether. We'll take you live to the White House in just moments.

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