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Chinese Startup DeepSeek Stuns World with R1 AI Model; Justice Department Fires Officials Who Investigated Trump; Musk Aligns Himself with Germany's Far-Right AfD Party; Homan: No Safe Haven for Undocumented Migrants. Aired 4-4:30a ET

Aired January 28, 2025 - 04:00   ET

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


[04:00:00]

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UNIDENTIFIED FEMALE: DeepSeek is an AI chatbot that's essentially a direct competitor to the advanced AI models from American tech giants.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We need to be laser focused on competing to win.

UNIDENTIFIED MALE: It's not just cheaper but a heck of a lot cheaper.

UNIDENTIFIED MALE: There's no safe haven. We're going to go where we got to go, whether it's a school or church or hospital.

UNIDENTIFIED MALE: We don't have to scare people, threaten these mass indiscriminate roundups.

ELON MUSK, TECH BILLIONAIRE: I think there's like frankly too much of a focus on past guilt and we need to move beyond that.

MUSK: It's OK to be proud to be German and not to lose that.

(END VIDEO CLIP)

ANNOUNCER: Live from London, this is CNN NEWSROOM with Max Foster and Christina Macfarlane.

MAX FOSTER, CNN ANCHOR: Hello and a warm welcome to our viewers joining us from around the world. I'm Max Foster.

CHRISTINA MACFARLANE, CNN ANCHOR: And I'm Christina Macfarlane. It's Tuesday January 28th 9 a.m. here in London, 5 p.m. in Beijing and we begin with President Trump calling on Silicon Valley to restore America's AI superiority.

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DONALD TRUMP, PRESIDENT OF THE UNITED STATES: The release of DeepSeek AI from a Chinese company should be a wake-up call for our industries that we need to be laser focused on competing to win.

(END VIDEO CLIP) FOSTER: Well U.S. tech stocks were sent plummeting on Monday after DeepSeek unveiled its AI models latest advancements. Tech giants including Microsoft, Google and Meta hit very hard but chip maker Nvidia suffered the worst of it down nearly $600 billion. Can you believe it?

MACFARLANE: Yes.

FOSTER: The largest single-day loss in stock market history.

MACFARLANE: Wow. DeepSeek's R1 is replicating the familiar features of ChatGPT style interface but it's operating at a fraction of the cost with China's restricted access to newer chip technology. This high- performance model is also able to run on underpowered hardware.

FOSTER: Formulating this top-tier performance with fewer resources is key to what's drawn so much attention to the R1 chatbot. Here to explain the inner workings of DeepSeek's AI model is CNN's Clare Duffy.

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CLARE DUFFY, CNN BUSINESS WRITER: Yes, DeepSeek is an AI chatbot that's essentially a direct competitor to the advanced AI models from American tech giants like OpenAI, Meta, Google. Like those other platforms it has this really user-friendly interface. You type a question it takes a few seconds and starts to generate a response.

It'll look really familiar to anybody who's used the other mainstream chatbots but what's different about DeepSeek is essentially what it took to build this technology and that is really what's shaking Silicon Valley this week. Silicon Valley who has spent billions of dollars to build their AI models. By comparison DeepSeek is a year-old Chinese startup that says it spent $5.6 million to build this model. The company also said it used less advanced chips because of U.S. export restrictions on China and what makes this model different is that it requires less computing resources. Each query puts less of a strain on the data center power resources than other big models.

And this is all raising really big questions not just about U.S. leadership in artificial intelligence but also the whole evolution that the American tech companies have said this industry needs to take. They've said we need to have the most advanced chips, we need to spend billions of dollars building out these massive power-hungry data centers in order to get and stay ahead and I think DeepSeek is really challenging that assumption.

I think we are going to start seeing shareholders asking really tough questions of the American tech companies about whether they've been overspending and whether they need to rethink their strategy.

Now one interesting thing about DeepSeek is that the platform appears to have some of the same censorship restrictions that we see on other Chinese platforms. For example I asked DeepSeek to tell me about what happened at Tiananmen Square and the platform said I can't tell you that. So I don't know that we'll necessarily see DeepSeek continue to be on the top of the Apple App Store, the top choice for consumers but the technology, the underlying technology raises big questions for Silicon Valley.

Clare Duffy, CNN, New York.

(END VIDEOTAPE)

MACFARLANE: You know I actually did that as well, I typed in what happened at Tiananmen Square and it blocked me too.

FOSTER: So you're one of the few that managed to get the app yesterday.

MACFARLANE: I think I got in in time, yes. First 24 hours I was curious to see and it does function really fast.

FOSTER: Is it more effective than --?

MACFARLANE: It's free, you don't get ads and you know the interface is different and quite user-friendly.

[04:05:00]

So I get why people like it. But obviously, you know, censorship is an issue, right, and it's still too early to know obviously what the full impact of this technology is going to have on the industry. American tech journalist Kara Swisher claims AI could benefit from diversifying the market with new players.

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KARA SWISHER, JOURNALIST: Also riding on our open-source models specifically LLAMA from Meta and things like that. Because there's a whole there's a whole struggle between open source and closed companies like OpenAI that do their switching. The question is with everybody spending all this money on closed systems only one or two are going to win, right, in that model. And so, if you open it up and you allow more people innovate at lesser cost it's good news say for companies, any company who doesn't have to pay too much for AI when it's almost free essentially.

At the same time you have worries about you know lack of any safety because you didn't hear DeepSeek talk about, you know, possible safety problems which U.S. companies tend to adhere to.

(END VIDEOTAPE)

FOSTER: Well AI analysts are skeptical about the claims DeepSeek has made surrounding the revolutionary AI model. The $6 million figure is questionable for many people. CNN's Kristie Lu Stout has the latest from Hong Kong.

(BEGIN VIDEOTAPE) KRISTIE LU STOUT, CNN CORRESPONDENT: DeepSeek and its AI claim has spooked markets and stunned the world but is it for real? Now last week DeepSeek unveiled a generative AI model called R1. It's much like ChatGPT except the company said that it can operate at a fraction of the cost.

Now according to DeepSeek it spent only $5.6 million on computing power for the base model and compare that with U.S. companies like Meta, like OpenAI or Google that have paid hundreds of millions or billions of dollars on their AI technology.

Now DeepSeek's announcement rattled America's tech sector. The tech heavy Nasdaq lost more than 3 percent, shares at Nvidia fell nearly 17 percent. But analysts are questioning DeepSeek's claims.

In fact according to strategy risks founder Isaac Stone Fish, he says this, quote, How much did it actually cost DeepSeek to train its model. We won't know that until someone has properly audited its claims and the research paper it released.

Meanwhile, we've been learning more about the founder of DeepSeek. Now Liang Wenfeng recently spoke at a symposium hosted by the Chinese premier Li Qiang and according to Chinese state-run media his lab is based in Zhejiang province.

It reportedly has a small team of fewer than 10 people and Liang believes China must shift. It must shift from imitation to originality to build its own high-tech ecosystem. In fact this is what he says, he says this, quote, We often say there's a one or two year gap between China and the U.S., but the real gap is between originality and imitation. If this doesn't change China will always be a follower -- unquote.

Liang adds that China cannot be in a follower position forever.

Kristie Lu Stout, CNN Hong Kong.

(END VIDEOTAPE)

FOSTER: The acting U.S. Attorney General is starting to clean house at the Department of Justice telling fired staffers the DOJ can't trust them to implement the agenda of President Donald Trump. The news came in a memo on Monday to specific individuals deemed to have played a role, a significant role in the criminal investigations into President Trump. A clear sign his administration is looking to make good on his campaign promise to get back at anyone involved in prosecuting him.

MACFARLANE: Also on Monday, the interim U.S. Attorney in Washington launched what he called a special project investigating prosecutors who tried and failed to charge some of the January 6th rioters with obstruction. President Trump seemed unfazed while speaking at an event on Monday making light of his multiple criminal cases.

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TRUMP: I was investigated more than any human being in history. Scarface was not investigated as much as your president was investigated and it turned out to be a positive thing for me -- can you believe. It turned out to be -- we got a lot of votes. I think we got a lot of votes because, because they saw it was weaponization. It was a fight against a political opponent.

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FOSTER: Well CNN's Paula Reid has more on the memo issued at the Justice Department.

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PAULA REID, CNN CHIEF LEGAL AFFAIRS CORRESPONDENT: President Trump has repeatedly vowed retribution against those who investigated him and these firings are one of the first moves he is making. In a letter the acting Attorney General told these employees, you played a significant role in prosecuting President Trump. The proper functioning of government critically depends on the trust superior officials place in their subordinates. Given your significant role in prosecuting the president, I did not believe that the leadership of the department can trust you to assist in implementing the president's agenda faithfully.

Now we're told this move impacts more than a dozen employees but of course Jack Smith, his top prosecutors, they had already left before Trump returned to office. This is mostly focused on career officials who are supposed to be protected from political retaliation.

And that wasn't the only news Monday out of the Justice Department.

[04:10:00]

They also took the first concrete steps to investigate prosecutors who worked on the January 6th cases. Now, the interim U.S. Attorney Ed Martin has launched an investigation into prosecutors who charged January 6th rioters with obstruction of justice. This is a charge that was used in a few hundred cases, but the Supreme Court ruled last year that it was improper to use that charge, saying obstruction of justice can only be used in the context of interfering with a congressional investigation, not for actions related to January 6th.

So now the Trump Justice Department is seeking all documents, e-mails, and notes related to those decisions to charge folks with obstruction of justice. Now, one senior administration official calls this, quote, a fact-finding mission, saying the prior office screwed up by filing hundreds of cases that ended up getting thrown out by the Supreme Court, and it is worth getting to the bottom of poor decision-making. But there are also concerns that this is all part of an effort to undermine the legitimacy of the entire January 6th prosecution.

Paula Reid, CNN, Washington.

(END VIDEOTAPE)

MACFARLANE: But the matter isn't completely resolved. Experts tell CNN there could be repercussions for the firings, as well as a dangerous precedent going forward. (BEGIN VIDEOTAPE)

JEFFREY TOOBIN, FORMER FEDERAL PROSECUTOR: The idea that they could lose their jobs simply for doing their jobs in an appropriate way is genuinely shocking, and it may well be illegal, because assistant U.S. attorneys, unlike political appointees, do have civil service protection, and you just can't fire them.

ANDREW MCCABE, FORMER FBI DEPUTY DIRECTOR: Now the concept of self- preservation and avoiding ending up on the enemies list has been planted in the minds of everybody who works in the Department of Justice and the FBI, and that is not a good thing for the country.

(END VIDEOTAPE)

FOSTER: The European Union will not be negotiating on the sovereignty of Greenland. That's according to the EU's foreign policy chief, who spoke to reporters on Monday about President Trump's recent comments on wanting to take control of the Arctic island from Denmark for security purposes.

MACFARLANE: The EU official also says Europe needs to close ranks as the U.S. takes a more transactional approach to its foreign relations. Denmark will now spend more than $2 billion to step up its military presence in the Arctic as a result of President Trump's remarks.

FOSTER: The Danish defense ministry says the money will go towards military training as well as new Arctic naval vessels and long-range drones to improve surveillance and maintain sovereignty in the region.

MACFARLANE: Now the chairman of the World Holocaust Remembrance Centre accuses Elon Musk of insulting victims of Nazism. The tech billionaire said Germany should stop atoning for crimes committed by the Nazis in the past. Musk made the comments at an election campaign launch for Germany's far-right AfD party.

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ELON MUSK, TECH BILLIONAIRE: I think there's frankly too much of a focus on past guilt and we need to move beyond that. Children should not be guilty of the sins of their parents or even let alone their parents, their great-grandparents maybe even, and we should be optimistic and excited about a future for Germany.

(END VIDEO CLIP)

FOSTER: Well just last week Musk faced criticism for a gesture that some say mirrored a Nazi salute during a speech in Washington DC. CNN's Fred Pleitgen reports.

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FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice- over): Elon Musk larger than life. The virtual guest of honor at the far-right Alternative for Germany's election campaign kickoff event. Some AfD members have been accused of using Nazi rhetoric. Musk calling for more German nationalism.

MUSK: I think there's like frankly too much of a focus on past guilt and we need to move beyond that.

MUSK: It's OK to be proud to be German and not to lose that in some sort of multiculturalism that dilutes everything.

PLEITGEN (voice-over): Music to the ears of AfD supporters.

MUSK: You know go, go, go.

PLEITGEN (voice-over): Musk speaking even before the party's main candidate Alice Weidel who makes no secret on immigration the AfD sees eye to eye with the Trump administration. And Weidel telling me just how important Musk's support is.

ALICE WEIDEL, AFD CANDIDATE FOR GERMAN CHANCELLOR: I'm incredibly happy that he could make it and I wish him and Donald Trump, J.D. Vance all the best and god blessings.

PLEITGEN: What would you do if you became the chancellor immediately?

WEIDEL: Closing our borders, controlling them and then sending out all the illegals and also these people who do crimes. They have to leave our country.

PLEITGEN (voice-over): Germany has taken in millions of refugees in recent years mostly from Syria, Iraq and Afghanistan.

[04:15:00]

But after a string of high-profile crimes like a recent stabbing by an Afghan asylum seeker killing a two-year-old boy and a man trying to stop the rampage, many Germans have soured to the migrant influx.

Musk inserting himself into German politics calling German Chancellor Olaf Scholz an incompetent fool and saying only the AfD can save Germany.

PLEITGEN: According to (INAUDIBLE) parties have said they will not cooperate with the AfD. The party is currently riding up high in the polls and could seem huge, on of the strongest political forces in Germany.

PLEITGEN: Outside the venue, Musk also a lightning rod for those protesting against the AfD.

I understand what happened in 1933, this many says, where many people didn't want to see it and I don't want my children to ask me, dad where were you when the Nazis started again.

The AfD rejects accusations of being right-wing extremists and the party leaders say like it or not the AfD is on the rise with Elon Musk fueling their assent.

Fred Pleitgen, CNN, Halle an der Saale, Germany.

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FOSTER: Ross Gerber is president and CEO of the investment firm Gerber Kawasaki and is a longtime major Tesla investor. He says Elon Musk's endorsement of the far right in Germany is worrying.

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ROSS GERBER, PRESIDENT AND CEO, GERBER KAWASAKI, TESLA INVESTOR: I find the whole move to fascism extremely disturbing. It's just Germany has come so far as a country from you know 60, 80 years ago from the war and to see this push back it's the same exact playbook that Hitler used in the 30s to create the Nazi party. It's literally the same attack on immigrants and in this case it was Jews now it's immigrants.

It's really a disturbing trend in the world but it is not what people want. It is not the majority of what Germans want or Americans and I think the perception on social media is completely different than what's actually happening in real life. And so he's simply manipulating people's views. What Elon is doing is extremely detrimental, A, as a shareholder to Tesla but this is all about power and Elon's trying to become one of the most powerful people in the world and that's what he's doing.

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FOSTER: The timing as well isn't it. Musk's controversial comments come as the world marks the 80th anniversary of the liberation of Auschwitz. Britain's Prince William and his wife Kate the Princess of Wales met with survivors and their families on Monday at a reception in London. Prince William paid tribute to the survivors of the Holocaust.

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PRINCE WILLIAM: I'm honored to join you today to mark Holocaust Memorial Day and to remember the millions murdered during the Holocaust and in subsequent genocides. We also remember those survivors who have lived with the scars both mental and physical. Their bravery in sharing with us the most harrowing moments of their lives are extremely powerful and ensure we never forget. I assure them we never will.

(END VIDEO CLIP)

MACFARLANE: Well meanwhile, King Charles became the first serving British monarch to visit Auschwitz. He joined -- he was joined by survivors and other dignitaries at a ceremony held at the notorious Nazi concentration camp. More than a million people mainly Jews were murdered there.

All right, coming up, the Trump administration crackdown on immigration appears made for TV. We'll tell you why.

FOSTER: Heavy rains hit western France flooding neighborhoods and sending residents scrambling for higher ground.

MACFARLANE: And later from chips and dip to wings and wine. We'll look at how much you might be spending for a Super Bowl party this year.

[04:20:00]

(COMMERCIAL BREAK)

FOSTER: The U.S. Immigration and Customs Enforcement Office says nearly 1,200 people were arrested on Monday as part of Donald Trump's crackdown on illegal immigration. President Trump is reportedly disappointed with that number. The raids are also being orchestrated for TV and social media with agents told to show up camera ready wearing full tactical gear.

MACFARLANE: Well if they're meant to stoke fear it's definitely working. The Trump administration says federal authorities can now arrest for undocumented migrants in churches and schools. Terrifying some parents about sending even their small children to elementary school.

The White House border czar spoke earlier about that.

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TOM HOMAN, WHITE HOUSE BORDER CZAR: We're sending a message. It's not OK to be in this country illegally. It is not OK to enter this country legally. Is it a crime? And there's going to be consequences. There's no safe haven for public safety threats and national security threats.

People say well were you really going to a high school? Well people need to look at the MS-13 members and Tren de Aragua members who entered this country majority between the ages of 15 and 17. Many are attending our schools and they're in there and they're selling drugs in the schools and they're in there and they're doing strong armed robberies of other students.

So we not go into schools or hospitals as a matter of practice, but I will say, if it's a significant public safety threat or significant homeland security threat there's no safe haven. We'll go where we need to go to take them off the street.

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MACFARLANE: And President Trump is demanding even more undocumented migrants be thrown out of the United States.

FOSTER: The White House is painting all undocumented migrants who were rounded up in the past few days as violent criminals. We have absolutely no evidence to back that up. Here's how Mr. Trump described the deportation flights with gleeful references to Nicholas Cage movie from the 1990s.

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TRUMP: You got 300 people sitting in a plane. Every one of them either a murderer, a drug lord, a kingpin of some kind, the head of the mob or a gang member and you're flying that plane. It's not going to end well.

You ever see the movie Con Air? That's what, yes, except here's the difference. The people in Con Air were actors.

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[04:25:00]

MACFARLANE: While the Trump administration is promising the strongest crackdown on undocumented immigrants in U.S. history, critics say so far they're focusing more on fear and propaganda.

CNN's Ed Lavandera has the latest.

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ED LAVANDERA, CNN SENIOR NATIONAL CORRESPONDENT (voice-over): The Trump administration is celebrating images of immigration officers fanning out across the country, arresting undocumented migrants. The president's supporters call it a new day in controlling the U.S. southern border.

REP. TONY GONZALES (R-TX): I think what I've seen in the first week has been very positive as far as deporting people that deserve to be deported. These convicted criminal aliens need to go home.

LAVANDERA (voice-over): The Immigration and Customs Enforcement Agency or ICE says in the last five days it has arrested an average of 710 people a day who will face deportation. In Colorado, the Drug Enforcement Administration says nearly 50 people suspected of being undocumented gang members were taken into custody Sunday. ICE officials say they carried out enhanced targeted operations in Chicago searching for criminal immigrants.

In Georgia, cameras recorded ICE agents arresting a Honduran man in his 50s at his home. The man's family says he is a construction worker with no criminal record other than a ticket for driving without a license.

While the Trump administration is touting its deportation efforts, critics say not much has really changed in Trump's first week from the Biden era. In fiscal year 2023, the Biden administration deported about 390 people a day, according to ICE data. That jumped to 743 a day in 2024.

REP. VERONICA ESCOBAR (D-TX): What the Trump administration is doing right now is performative. A form of propaganda so that he can tell his base, look, I'm doing exactly what I told you I was going to do.

LAVANDERA (voice-over): The Trump administration is also boosting the military presence along the southern border. More than 1,500 troops have been brought in and will be deployed along various points on the border.

Texas Governor Greg Abbott is also bringing in 400 additional National Guard soldiers to work alongside Border Patrol agents.

TOM HOMAN, WHITE HOUSE BORDER CZAR: They're down there to create a secure border and lock that border down. And DOD has helped administrations before, but not at this level. So it's a force multiplier and it's sending a strong signal to the world our borders are closed.

LAVANDERA (voice-over): Tom Homan is the Trump administration's border czar and he's vowing more arrests to come, which is triggering a sense of fear among immigrant communities across the country, especially among farm workers.

TERESA ROMERO, PRESIDENT, UNITED FARM WORKERS: Right now, farm workers are not even opening their doors to anybody who knock on their doors because they are afraid that it's going to be somebody who's going to take him, who's going to separate him from the family. So, this is the worst that I personally have seen in many years.

LAVANDERA: There have been some operational changes here on the ground along the U.S. southern border. Military aircraft are now being used to carry out deportations, repatriating undocumented immigrants back to their home countries, as well as more cooperation, interagency cooperation in terms of being able to arrest undocumented immigrants around the country. So, we have seen those changes. But the question is, just how long will this be sustainable?

Ed Lavandera, CNN, El Paso, Texas.

(END VIDEOTAPE)

FOSTER: Now it may be facing resistance around the world, but Google is giving President Trump what he wants. The company posted on X that Google Maps would change the Gulf of Mexico into the Gulf of America and will list Denali as Mount McKinley.

MACFARLANE: The company defended its actions, saying it has a long- standing practice of listing names which have been updated in official government sources. President Trump unilaterally declared the name changes in one of his executive actions on inauguration day.

FOSTER: Returning home and in many cases returning to ruins, an emotional journey for hundreds of thousands of Palestinians allowed to head back to northern Gaza.

MACFARLANE: Plus, the Chinese startup that stunned the world of artificial intelligence. Just ahead, how DeepSeek's AI model could transform the industry.