AI Sector Daily Digest: July 26, 2026

In brief

1. DeepSeek pauses a reported funding round

• DeepSeek verbally told some prospective backers that it would not sign investment agreements in the coming days, Reuters reported, citing a Bloomberg News story and people familiar with the matter. 1
• The process could resume later, but Reuters said it could not independently verify the report, and DeepSeek could not immediately be reached for comment.
• The planned round was expected to value the Hangzhou-based startup at about $74 billion, after a first round of roughly $7.4 billion; Reuters also reported that DeepSeek had begun early discussions about a possible Shanghai STAR Market IPO. 1

2. Tech companies rally around open-weight AI

• Microsoft published an open letter arguing that downloadable, inspectable, and modifiable model weights are important for competition, access, and U.S. technological capacity. 2
• The signatory list includes OpenAI, Microsoft, Nvidia, Meta, Google, Palantir, Mistral, Hugging Face, GitHub, and other companies and organizations. 2
• The letter accepts that open weights carry risks, but calls for targeted action against unlawful extraction from closed models instead of broad restrictions on techniques such as distillation. 2

3. Microchip agrees to buy edge-AI chipmaker Hailo

• Microchip Technology signed a definitive agreement to acquire Israeli chipmaker Hailo, which makes processors and software for computer vision and other AI workloads at the edge. 3
• The price was not disclosed. CTech reported that Hailo had raised about $340 million and once exceeded a $1 billion valuation, before layoffs, emergency financing, and a failed SPAC merger.
• The deal is expected to close by the end of Microchip's quarter ending September 30, subject to approvals; Microchip said it does not expect the acquisition to materially affect its financial results. 3

4. Chinese AI models gain U.S. users on cost and access

• The Associated Press reported that Mozilla CTO Raffi Krikorian moved to Moonshot's Kimi K3 for daily work after previously using Z.ai's GLM-5.2; Coinbase also said it was switching to Chinese models to reduce costs. 4
• Sensor Tower estimated that Kimi passed 930,000 downloads worldwide in the week after its July release, up 200% from the previous week; U.S. downloads rose about 387% to roughly 86,000. 4
• AP also reported that Chinese models still lag U.S. leaders in full-range capabilities, so the immediate competitive advantage is narrower: lower prices, open access, and performance that many routine users consider sufficient.

5. Monday.com cuts about 20% of staff in AI-focused restructuring

• Monday.com said in an SEC filing that it plans to cut about 20% of its workforce, or just over 600 jobs, as part of a restructuring tied to its product, marketing, and go-to-market strategy and its AI-driven growth plan. 5
• Co-founder Eran Zinman told employees the cuts were not intended to replace people with AI, but to adapt the organization to the company's AI-first direction; Monday.com expects $45 million to $55 million in restructuring charges.
• The company still projects up to 20% year-over-year revenue growth for 2026, making this a reallocation of people and spending toward AI rather than a claim that the business is shrinking. 5