Welcome to our weekly briefing on R&D headlines shaping technology, energy, manufacturing, and more. In this edition, we continue to explore how the Chinese startup DeepSeek is potentially rewriting AI training assumptions, the potential ripple effects on global energy demand, new tariffs upending automotive supply chains, plus highlights from the Idaho National Laboratory, Procter & Gamble’s renewed R&D focus, and the latest developments in space-based research. Read on for the top moves and a snapshot of the R&D World Index for the week ending January 31, 2025.
AI & technology
1. DeepSeek’s disruptive AI launch
The biggest technology story of 2025 thus far is undoubtedly the announcement on January 20 by Chinese startup Hangzhou DeepSeek Artificial Intelligence Basic Technology Research Co., Ltd, Zhejiang, of its DeepSeek-R1 model. This AI system claims to respond comparable to other reasoning-based large language models (LLMs), most notably OpenAI’s o1 but potentially also its o3-mini family. “OpenAI o3-mini is a good model, but DeepSeek r1 is similar performance, still cheaper, and reveals its reasoning,” wrote Lex Fridman, the computer scientist and podcaster Lex Fridman is freely available for use, modification, viewing and designing documents for building purposes, according to DeepSeek. The conventional thinking for AI systems before the DeepSeek announcement was that AI companies needed leading-edge computer chips, such as the expensive devices made by Nvidia, Santa Clara, California, to train the systems. Last week, the DeepSeek announcement shocked the AI community, causing more than a trillion dollars in combined stock values to be lost in just one day. After a week of frantic hand-wringing to this news, more details have become available. It appears that DeepSeek’s announcement left out some details and the reality of the situation is that according to industry insiders (SemiAnalysis), the $6 million cost claimed by the company doesn’t include the cost of 50,000 Nvidia GPUs (graphic processing units) and about $1.6 billion in hardware buildout costs spent by DeepSeek.
The DeepSeek announcement above had even more less apparent ramifications in the form of potentially lower future electrical energy demand than that required from the power-hungry Nvidia chip-based systems. Following the DeepSeek announcement, stock shares of natural gas, nuclear, and solar energy providers dropped by 10% to 30%, reflecting the lower potential demand and reduced infrastructure requirements. These forecasts also included drops in natural gas demand from warmer weather-related effects of global warming.
2. Homegrown talent fuels innovation
Deepseek has substantially changed the conventional processes used by others. According to insiders, engineering talent for DeepSeek development has come entirely from within China, with no talent poached from Taiwan or the U.S. Engineers come from internal Chinese universities such as Peking University and Zhejiang University. They are paid highly competitive salaries, some exceeding $1 million, which is more than other leading Chinese AI firms such as Moonshot. This has led to rapid technological advances that could reduce the need for high-end GPUs.
The DeepSeek announcement brought to light other Chinese companies that are also making advances in AI. This includes RDW Index member Alibaba with its Qwen conversational AI chatbot family, videogame developer Tencent with its AI model Hunyuan, search engine developer Baidu with its ChatGPT equivalent Ernie Bot, and many others.
3. Chinese AI ecosystem accelerates
The DeepSeek announcement has shone a spotlight on China’s broader AI push. Major domestic players —including RDW Index member Alibaba with its conversational AI chatbot Qwen, Tencent’s AI model Hunyuan, and Baidu’s ChatGPT equivalent Ernie Bot — are advancing their own AI initiatives, further intensifying the global AI race.
Energy & infrastructure
4. Energy sector repercussions
The University of Idaho, Moscow, and the Department of Energy’s Idaho National Laboratory, Idaho Falls, signed a five-year Strategic Understanding for Premier Education and Research agreement last week to increase collaboration on nuclear energy R&D. The partnership aims to enhance the long-term viability of nuclear power, protect national security and build a resilient, low-carbon energy future for Idaho and the U.S. Key areas for this include nuclear materials, fuel cycle engineering, nuclear-integrated energy systems, power systems and cybersecurity.
Automotive & manufacturing
5. Automotive industry reassesses tariff exposure
The Trump administration’s imposition of up to 25% tariffs on Canadian and Mexican automotive imports (the tariffs on Mexico are now on pause) has U.S. automotive companies reevaluating their extensive factory networks across all three countries to reduce their tariff exposure. RDW Index member General Motors is said to be the most vulnerable with more than third of its U.S. sales estimated to be produced in Canada and Mexico.
6. Honda invests billions in advanced manufacturing
RDW Index member, Honda, Tokyo, Japan, announced last week that it is in the midst of completing more than $1 billion in new investments in Ohio. Upgrades include the installation of six giga presses, which were made well known by Tesla and a new cell manufacturing system for its upcoming electric vehicle (EV) battery cases. The company’s EV hub in Ohio includes a separate $3.5 billion battery plant which will be the flagship for Honda’s global manufacturing operations. That includes its Maryville Auto plant being capable of producing traditional vehicles, hybrids and EVs on the same assembly line.
Additional developments
7. Procter & Gamble refocuses on product R&D
The Procter & Gamble Company, Cincinnati, Ohio, announced last week that it is re-focusing its company on product R&D as a big business driver. Over the past few years, the company has been testing its reach and frequency in an attempt to understand where it could spend less while reaching more people. Upon announcing its earnings two weeks ago, Procter & Gamble reported strong fiscal second-quarter performance, with earnings per share of $1.88 and revenue of $21.88 billion exceeding analyst expectations. Sales improved in key markets including the U.S. and China. The company reported a 1% volume growth despite operational challenges, with particularly strong performance in its baby, feminine and family care division which saw a 4% volume increase. Its beauty division, however, experienced a 1% decline. While maintaining their fiscal 2025 forecast of 2-4% revenue growth, P&G’s CFO Andre Schulten characterized the Chinese market as still challenging and noted U.S. consumer behavior as “volatile.”
8. Space‑based R&D breaks new ground
The International Space Station (ISS) National Laboratory highlighted the rapid growth of space-based R&D in its annual report released last week by the Center for the Advancement of Science in Space. Over the past year, the ISS National Lab has sponsored more than 100 payloads delivered to the orbiting lab, the second highest annual total to date. Nearly three quarters of newly selected projects sponsored for flight were from first-time space users, highlighting the success of the National Lab in engaging new research communities.
The R&D World Index
R&D World’s R&D Index is a weekly stock market summary of the top international companies involved in R&D. The top 25 industrial R&D spenders in 2020 were selected based on the latest listings from Schonfeld & Associates’ June 2020 R&D Ratios & Budgets. These 25 companies include pharmaceutical (10 companies), automotive (6 companies) and ICT (9 companies) who invested a cumulative total of nearly 260 billion dollars in R&D in 2019, or approximately 10% of all the R&D spent in the world by government, industries and academia combined, according to R&D World’s 2021 Global R&D Funding Forecast. The stock prices used in the R&D World Index are tabulated from NASDAQ. NYSE, and OTC common stock prices for the companies selected at the close of stock trading business on the Friday preceding the online publication of the R&D World Index.
Note: All images from Adobe Stock with the exception of the ISS National Lab image, which is from NASA.
| Ticker | Exchange | 2020 R&D Billions $ | 01/24/25 | 01/31/25 | 1/24/25 to 1/31/25 | 1/1/22 to 1/31/25 | ||
| 1 | Alphabet/Google | GOOGL | NASDAQ | 27.303 | 201.90 | 205.60 | 1.83% | 41.94% |
| 2 | Microsoft | MSFT | NASDAQ | 17.198 | 444.06 | 415.06 | -6.53% | 23.41% |
| 3 | Volkswagen AG | VWAGY | OTC | 17.259 | 10.37 | 10.34 | -0.29% | -64.59% |
| 4 | Apple | AAPL | NASDAQ | 18.667 | 222.78 | 236.00 | 5.93% | 32.91% |
| 5 | Facebook/Meta | META | NASDAQ | 13.874 | 647.49 | 689.19 | 6.44% | 104.90% |
| 6 | Intel | INTC | NASDAQ | 14.503 | 20.83 | 19.43 | -7.01% | -62.27% |
| 7 | Johnson & Johnson | JNJ | NYSE | 13.750 | 146.82 | 152.15 | 3.63% | -11.06% |
| 8 | Roche Holdings AG | RHHBY | OTC | 14.143 | 38.05 | 39.25 | 3.15% | -24.07% |
| 9 | Merck & Co. | MRK | NYSE | 11.381 | 95.55 | 98.82 | 3.42% | 28.94% |
| 10 | Novartis | NVS | NYSE | 9.387 | 99.97 | 104.72 | 4.75% | 19.72% |
| 11 | Toyota | TM | NYSE | 10.724 | 186.61 | 188.93 | 1.24% | 1.96% |
| 12 | Pfizer | PFE | NYSE | 8.336 | 26.09 | 26.52 | 1.65% | -55.09% |
| 13 | Alibaba | BABA | NYSE | 6.006 | 89.14 | 98.84 | 10.88% | -16.79% |
| 14 | GM | GM | NYSE | 6.727 | 53.91 | 49.46 | -8.25% | -15.64% |
| 15 | Honda | HMC | NYSE | 8.806 | 28.66 | 28.34 | -1.12% | -0.39% |
| 16 | Ford | F | NYSE | 9.340 | 10.12 | 10.08 | -0.40% | -51.47% |
| 17 | AbbVie | ABBV | NYSE | 13.949 | 170.30 | 183.90 | 7.99% | 35.82% |
| 18 | Sanofi SA | SNY | NYSE | 7.750 | 52.48 | 54.34 | 3.54% | 8.46% |
| 19 | Cisco | CSCO | NASDAQ | 6.331 | 62.23 | 60.60 | -2.62% | -4.37% |
| 20 | Bristol-Myers Squibb | BMY | NYSE | 7.130 | 59.67 | 58.95 | -1.21% | -5.45% |
| 21 | Astra Zeneca PLC | AZN | NYSE | 6.056 | 69.06 | 70.76 | 2.46% | 21.48% |
| 22 | IBM | IBM | NYSE | 5.368 | 224.80 | 255.70 | 13.75% | 91.31% |
| 23 | Oracle | ORCL | NYSE | 6.928 | 183.60 | 170.06 | -7.37% | 95.00% |
| 24 | Eli Lilly & Co. | LLY | NYSE | 8.606 | 785.41 | 811.08 | 3.27% | 193.64% |
| 25 | Stellantis NV | STLA | NYSE | 5.309 | 13.41 | 13.13 | -2.09% | -32.80% |
| Total | 269.522 | 3943.31 | 4051.25 | 2.74% | 43.67% | |||
| ICT | 2096.83 | 2150.48 | 2.56% | 48.35% | ||||
| Automotive | 303.08 | 300.28 | -0.92% | -12.17% | ||||
| Biopharmaceutical | 1543.40 | 1600.49 | 3.70% | 55.65% |
