The TechWave - Edition 02 | 17-28/02/2025

Welcome to The TechWave by SmartDev, your go-to source for the latest IT news. In today’s rapidly evolving tech landscape, staying informed is key. We break down the biggest updates, making it easier for you to understand the trends shaping the industry.

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OpenAI Unveils GPT-4.5 with Enhanced Conversational Intelligence

OpenAI has introduced GPT-4.5, its most advanced AI model yet, now available for ChatGPT Pro users and developers, with plans to expand to Plus, Team, Enterprise, and Education users. CEO Sam Altman describes it as the first AI that truly feels like talking to a "thoughtful person", offering deeper and more intuitive interactions.

According to OpenAI, early testing highlights several improvements:

• More Natural and Intuitive Responses – The model is better at understanding user intent and engaging in nuanced conversations.
• Expanded Knowledge Base – GPT-4.5 offers a broader and more accurate grasp of information.
• Fewer Hallucinations – It is designed to reduce instances of generating incorrect or nonsensical information.
• Enhanced Emotional Intelligence – Improved ability to understand and respond to emotions makes it ideal for writing, problem-solving, and programming tasks.

Despite its capabilities, Altman emphasizes that GPT-4.5 is a "giant, expensive" model, designed not to dominate benchmarks but to provide a unique and engaging AI experience.

Memecoins have ‘undoubtedly damaged’ crypto as Milei crisis escalates, say industry leaders

While blockchain enables decentralized finance (DeFi) and new investment opportunities, memecoins reveal the darker side of speculation-driven markets.

Key highlights:

- Backed by Argentine President Javier Milei, $LIBRA surged to $4.5 billion before crashing 80%, sparking investor losses and calls for his impeachment.

- Experts warn memecoins undermine crypto’s credibility, shifting focus from meaningful blockchain projects to speculation.

- The scandal fuels stricter crypto regulations, which could slow Web3 innovation.

Fueled Skepticism In Blockchain:

- Blockchain offers trust and transparency, but memecoins thrive on hype, damaging industry reputation.

- While Web3 aims to decentralize finance and identity, memecoin mania distracts from real innovations.

- Increased scrutiny may protect investors, but excessive regulation risks stifling blockchain growth.

Israel’s Use of US AI in War Sparks Ethical Concern

U.S. tech giants, including Microsoft, OpenAI, Google, and Amazon, have provided AI-powered tools to enhance Israel’s military operations in Gaza and Lebanon.

The deployment of AI in warfare has led to a surge in civilian casualties, raising ethical concerns about misidentifications, algorithmic biases, and flawed data influencing life-or-death decisions. While Israel claims that human oversight remains in place, the increasing reliance on AI reduces transparency and accountability in military operations. At the same time, Microsoft, OpenAI, Google, and Amazon continue to profit from lucrative defense contracts, despite public scrutiny and internal employee protests.

Consequences & Reactions

Israel defends its AI-driven strategy, arguing that these technologies improve accuracy and reduce collateral damage. Microsoft remains silent, while OpenAI modified its policies in 2024 to allow AI use for national security purposes. Google and Amazon continue to support Israel’s military through Project Nimbus. However, opposition is growing, with employee protests at Microsoft and Google demanding stricter AI regulations and ethical boundaries.

DeepSeek claims ‘theoretical’ profit margins of 545%

Chinese AI startup DeepSeek has disclosed cost and revenue data for its AI models, V3 and R1, claiming a theoretical daily cost-profit ratio of up to 545%. The company estimates daily inference costs at $87,072, with potential daily revenues of $562,027, leading to this ratio. However, DeepSeek cautions that actual revenues are lower due to factors like varying model costs, free web and app access, and reduced developer fees during off-peak hours.

Key highlights:

• DeepSeek's training expenses were significantly lower than those of U.S. counterparts, utilizing Nvidia's H800 chips, which are less powerful than those used by firms like OpenAI.
• The company's claims have influenced global AI stocks, especially after the surge in popularity of chatbots powered by its models.
• Despite the high theoretical profit margins, actual revenues are affected by various factors, including free access to certain services and differential pricing during off-peak hours.

Microsoft hangs up on Skype: Service to shut down May 5, 2025

Microsoft has announced that Skype will officially shut down on May 5, 2025, marking the end of its 22-year run. The decision comes as the company shifts focus to Microsoft Teams, which offers advanced communication features tailored for modern collaboration.

Skype users can transition to Teams using their existing credentials, ensuring continuity of contacts and chat history. Originally launched in 2003 and acquired by Microsoft for $8.5 billion in 2011, Skype was once a leader in online communication but lost ground to competitors like Zoom and WhatsApp.

This move aligns with Microsoft’s strategy to streamline its communication platforms and enhance productivity solutions for businesses and individuals.

Microsoft finalizes its EU sovereign cloud project

Microsoft has completed its EU Data Boundary initiative, enabling European customers to store and process data within the European Union (EU) and European Free Trade Association (EFTA) regions. This development addresses data residency, security, and compliance requirements for Microsoft's core cloud services, including Microsoft 365, Dynamics 365, Power Platform, and most Azure services.

Key highlights:

• European commercial and public sector customers can now ensure that their data, including customer data and pseudonymized personal data, remains within EU and EFTA boundaries.
• Microsoft will store professional services data from technical support interactions for core cloud services within the EU and EFTA regions.
• Over the past 16 months, Microsoft has invested more than $20 billion in artificial intelligence and cloud infrastructure across Europe to meet growing demand and expand local options.
• In limited security instances requiring a coordinated global response, essential data may be transferred with robust protections to safeguard customer data.

This completion reflects Microsoft's commitment to delivering cloud services that support European transparency, protect privacy, and enhance customer control.

US suspends offensive cyber operations against Russia

U.S. Defense Secretary Pete Hegseth has ordered a suspension of all offensive cyber operations against Russia, including operational planning, as part of a broader reassessment of U.S.-Russia relations. This move aligns with President Donald Trump's initiative to encourage negotiations aimed at resolving the ongoing conflict in Ukraine. The duration and scope of this suspension remain unspecified.

Key highlights:

• The suspension reflects a strategic shift in U.S. policy, emphasizing diplomatic engagement over cyber confrontations with Russia.
• The decision precedes a tense Oval Office meeting between President Trump and Ukrainian President Volodymyr Zelensky, highlighting efforts to facilitate peace talks.
• The halt affects U.S. Cyber Command's offensive and information operations targeting Russian networks, with implications for intelligence-gathering and cyber defense strategies.

This development underscores the administration's focus on recalibrating its approach to Russia amidst ongoing geopolitical tensions.

M&A Trends in Tech, Media & Telecom (TMT) for 2025

With AI innovation and favorable regulations, TMT M&A is set for a strong rebound, making 2025 a pivotal year for deal-making.

Key Takeaways from PwC

• The surge in AI technologies is leading to increased capital expenditures, especially in specialized semiconductors like GPUs, essential for AI applications.
• The new U.S. administration's focus on deregulation, including potential easing of Federal Communications Commission (FCC) policies, is anticipated to facilitate more megadeals (transactions exceeding $5 billion) in the TMT sectors.
• While global TMT deal volumes experienced a 27% decline in 2024 compared to 2023, there was a notable recovery in deal values, particularly within the technology sector. This suggests a trend toward higher-value transactions.

Impact on TMT Industry

• Companies are acquiring AI infrastructure & capabilities to stay competitive.
• Deregulation may increase industry mergers and reshape competition.
• AI growth and policy changes could drive more dynamic M&A activity in 2025.

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