Scale AI Launches Colossus as DeepSeek Uses Nvidia Chips

Key Takeaways

• The IMF raised its 2026 global growth forecast to 3.3 percent, attributing the increase to an AI investment boom.
• xAI launched Colossus 2, the world's first gigawatt-scale AI training cluster, which will be upgraded to 1.5 gigawatts.
• xAI secured $20 billion in Series E funding, with NVIDIA and Cisco as strategic partners, to develop Grok 4, Grok Voice, Grok Imagine, and Grok 5.
• DeepSeek failed to train its R2 AI model on Huawei Ascend chips, reverting to NVIDIA hardware due to performance limitations.
• Huawei chips currently provide only 60 percent of Nvidia H100 performance, a gap projected to grow by 2027.
• Suno, a generative AI music company, is valued at $2.45 billion and raised $250 million in funding.
• Asus exited the smartphone market to focus its resources on AI servers and AI PCs.
• Taiwan's economy is projected to grow by 4.1 percent in 2026, largely driven by the booming AI sector and semiconductor industry.
• Reports of AI-related incidents increased by 50 percent from 2022 to 2024, with deepfake video incidents rising significantly.
• Concerns exist regarding xAI's methods for gathering training data, including potential scraping of social media, and the possibility of bias in its AI models.

IMF Predicts Steady Global Growth for 2026

The International Monetary Fund (IMF) raised its global growth forecast for 2026, noting that an AI investment boom is helping to overcome trade challenges. IMF chief economist Pierre-Olivier Gourinchas stated that the global economy remains resilient, adapting to US tariffs by rerouting supply chains. The US growth for 2026 is projected at 2.4 percent, driven by large investments in AI infrastructure. While AI offers significant economic benefits, the IMF warns of potential risks like inflation or market corrections if AI productivity gains are not fully realized. China's 2026 growth is forecast at 4.5 percent, and the euro zone at 1.3 percent.

IMF Sees Solid Growth But Warns of AI and Trade Risks

The International Monetary Fund (IMF) now expects global growth of 3.3 percent this year, an increase from its October prediction. This positive outlook is fueled by an AI boom and reduced trade tensions. However, IMF Chief Economist Pierre-Olivier Gourinchas cautioned that these same factors could become challenges if they reverse. The IMF highlighted that if expected AI productivity gains do not happen, it could cause an abrupt market slump. New trade disputes and protectionist policies also pose threats to economic stability. The US is projected to grow by 2.4 percent in 2026, with the euro area at 1.3 percent and China at 4.5 percent.

IMF Forecasts Stronger Growth But Cautions on AI and Tariffs

The International Monetary Fund (IMF) raised its forecast for global economic expansion in 2024 to 3.2 percent, up from 3.1 percent. This improvement is due to strong consumer spending and robust job markets, especially in the US. However, the fund warned that this optimistic outlook is fragile. Geopolitical tensions and increasing protectionist trade policies, including higher tariffs, could disrupt the recovery. The IMF also highlighted a risk of a market correction in the booming artificial intelligence sector if the rapid investment surge proves unsustainable. International cooperation is essential to ensure sustainable global economic growth.

IMF Raises 2026 Global Growth Forecast Citing Tech Boost

The International Monetary Fund (IMF) upgraded its global growth forecast for 2026 to 3.3 percent, a 0.2 percentage point increase from its October prediction. This boost comes from significant tech investments, particularly in artificial intelligence. IMF chief economist Pierre-Olivier Gourinchas explained that the global economy is overcoming 2025 trade disruptions, with AI providing a strong tailwind, especially in North America and Asia. However, the IMF warns of potential disruptions from a reevaluation of AI productivity gains or renewed trade tensions. The US growth is estimated at 2.4 percent for 2026, with China and India also showing strong growth.

IMF Lifts 2026 Global Growth Forecast Despite Risks

The International Monetary Fund (IMF) has increased its global growth forecast for 2026, projecting a steady 3.3 percent expansion. This represents an upward revision of 0.2 percentage points from its October forecast. The IMF expects this growth pace to continue. However, the fund also pointed out significant risks to this positive outlook. These risks primarily stem from developments in artificial intelligence and ongoing global trade tensions.

xAI Launches World's First Gigawatt AI Training Cluster

xAI, led by Elon Musk, launched its Colossus 2 supercomputer, making it the world's first gigawatt-scale AI training cluster. This powerful system, along with Colossus 1, trains xAI's Grok large language model. Colossus 2 has already surpassed 1 gigawatt and will be upgraded to 1.5 gigawatts in April. xAI is building its own data centers and power systems for greater independence, unlike other AI companies that rely on tech giants. The company recently secured $20 billion in Series E funding, with support from investors like Valor Equity Partners and strategic partners NVIDIA and Cisco. This investment will help scale infrastructure, deploy AI products like Grok 4, Grok Voice, and Grok Imagine, and advance research for future models like Grok 5.

Elon Musk's xAI Activates Gigawatt AI Training Cluster

Elon Musk's xAI has brought its Colossus 2 supercomputer online, creating the world's first gigawatt-scale AI training cluster. This system, along with Colossus 1, is used to train xAI's Grok large language model. The Colossus 2 will be upgraded to 1.5 gigawatts by April, already exceeding San Francisco's peak power demand. xAI recently completed a $20 billion Series E funding round, attracting investors like Valor Equity Partners and support from NVIDIA and Cisco. This funding will accelerate infrastructure development, deploy AI products such as Grok 4, Grok Voice, and Grok Imagine to users, and advance research for its next model, Grok 5.

Suno CEO Mikey Shulman Creates AI Music for the Future

Mikey Shulman, co-founder and CEO of Suno, leads a generative AI music company valued at $2.45 billion. Suno allows users to create full songs from simple text prompts, aiming to make music interactive and social. While the music industry faces an "existential crisis" over AI's impact, Shulman believes Suno is building the next format for recorded music. The company raised $250 million in funding in November. Suno trains its models on music found on the open internet, and Shulman emphasizes that music is not a problem to solve, distinguishing Suno from other AI companies.

Taiwan's Economy to Grow 4.1 Percent in 2026 Due to AI

Taiwan's economy is expected to grow by 4.1 percent in 2026, largely thanks to the booming artificial intelligence sector. A report from the Taiwan Institute of Economic Research (TIER) highlights early stockpiling of AI hardware and significant investments in AI technologies as key drivers. The global demand for AI applications, such as cloud computing and data centers, is boosting Taiwan's dominant semiconductor industry. This strong focus on high-value technology positions Taiwan well to benefit from the AI revolution, with government support and private sector initiatives further contributing to this positive forecast.

DeepSeek Fails to Train AI Model on Huawei Chips

DeepSeek's attempt to train its R2 AI model using Huawei Ascend chips failed, even with on-site help from Huawei engineers. The company ultimately switched back to Nvidia hardware for training due to persistent technical issues. Huawei's chips currently offer only 60 percent of Nvidia H100 performance, a gap expected to grow significantly by 2027. This failure highlights a major difference between China's AI goals and its actual semiconductor capabilities. DeepSeek now uses Nvidia chips for demanding training tasks and Huawei chips for less complex inference tasks, revealing a clear performance gap in China's domestic AI hardware.

Economist Asks If AI Is Driving Growth or a Bubble

Economist Jean Pisani-Ferry notes that ChatGPT reached 800 million users in just over three years, showing AI's rapid impact. Since early 2025, AI investments have been the main driver of growth in the United States. Goldman Sachs predicts capital spending will exceed $500 billion this year, a figure comparable to major investment booms of the past. Most of this investment comes from AI companies themselves, particularly the "Magnificent Seven" tech giants, as they race to build larger data centers. This differs from the dot-com bubble, where user sectors played a larger role.

Elon Musk's xAI Faces Questions on Data and Bias

Elon Musk's xAI startup is facing scrutiny regarding its practices and what constitutes "acceptable AI." Concerns include the company's method of gathering training data, with reports suggesting it may have scraped social media platforms without explicit consent, raising privacy issues. Critics also worry about potential bias in xAI's AI models and urge the company to be more transparent about its data sources and efforts to reduce bias. The broader tech landscape also sees new AI tools for Gmail, a growing demand for AI trainers, and an ongoing memory-chip crisis affecting AI's advancement.

China Leads AI Hardware Race Says Saritha Rai

Saritha Rai of Bloomberg reports that China is quickly becoming a dominant force in the AI hardware market. Chinese companies are rapidly putting artificial intelligence into many real-world products, as seen at CES 2026. This shift moves the AI competition between Washington and Beijing beyond chatbots and image generators. China is now leading in areas like robots, automobiles, and various consumer products, with examples such as the Wanda 2.0 general-purpose robot by Chinese firm UniX AI.

AI Harms Are Rising Globally According to New Data

Reports of AI-related incidents increased by 50 percent from 2022 to 2024, with incidents in the first ten months of 2025 already exceeding the 2024 total. The AI Incident Database collects this data from news coverage, though experts like Atherton note this is only a fraction of actual harms. Simon Mylius and his team at MIT FutureTech developed a new AI tool to help sort and analyze these incidents. While reports of AI-generated misinformation and discrimination decreased in 2025, "computer human interaction" incidents, including those involving chatbots and deepfakes, have significantly risen. Notably, deepfake video incidents have outnumbered other categories since 2023, with xAI's Grok update in late December leading to rampant misuse.

Asus Exits Smartphone Market to Focus on AI

Asus has officially stopped making smartphones, ending its Zenfone and ROG Phone lines. The Taiwanese tech company is now focusing its resources on artificial intelligence development, specifically on AI servers and AI PCs. This major shift shows Asus's commitment to capitalizing on the growing importance of AI in the tech industry. Asus will continue to provide software updates and support for its existing smartphone customers. This move aligns Asus with a broader trend in the tech industry where companies are prioritizing AI integration and hardware development.

Sources

• IMF sees steady global growth in 2026 as AI boom offsets trade headwinds
• IMF Warns AI, Trade Pose Risks to Solid Global Growth Outlook
• IMF Sees Stronger Growth, But Sounds Warning On Higher Tariffs And AI Correction
• IMF lifts 2026 global growth forecast but flags AI, trade risks
• IMF lifts 2026 global growth forecast but flags AI, trade risks
• xAI launches world-first gigawatt-scale AI training cluster for Grok
• Elon Musk’s xAI brings 1GW Colossus 2 AI training cluster online
• Is this man the future of music – or its executioner? AI evangelist Mikey Shulman says he’s making pop, not slop
• AI boom to support Taiwan’s 2026 growth at 4.1%: report
• Deepseek's Failed Gambit with Huawei Chips Exposes China's AI Hardware Reality
• Jean Pisani-Ferry, economist: 'Is AI fueling a new wave of growth or a bubble?'
• Musk’s xAI Raises Questions About Acceptable AI
• Saritha Rai: How China is taking command in AI hardware race
• What the Numbers Show About AI's Harms
• Asus exits smartphone business, and the reason is AI - The Times of India