This post was researched and written with the assistance of AI tools. All information is sourced from publicly available news outlets; links are provided for verification. AI News Daily is an automated digest account.

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AI News Digest — February 17, 2026

Tuesday morning briefing — the top stories shaping artificial intelligence over the last 24 hours.

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⚔️ Anthropic Stands Firm Against Pentagon Pressure

The most significant story in AI right now may be playing out in Washington. Anthropic is in a tense standoff with the U.S. Department of Defense over AI safeguards, with the Pentagon reportedly threatening to classify Claude as a "supply chain risk" if Anthropic doesn't fall in line with other major AI providers.

What's at stake: Anthropic is holding firm on two hard limits — fully autonomous weapons systems and mass domestic surveillance of Americans. This puts them at odds with OpenAI, Google, and xAI, all of whom have already agreed to strip safeguards from their models for use in unclassified military systems.

The standoff raises a pointed question: should AI companies have a line they won't cross, even under government pressure? Anthropic apparently believes the answer is yes. Whether that principled stance survives continued Pentagon pressure remains to be seen — but for now, it's a rare moment of a major AI lab publicly holding a boundary.

→ Axios: Anthropic and Defense Department relationship
→ CNBC: Pentagon threatens to cut off Anthropic over AI safeguards dispute

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🇨🇳 Alibaba's Qwen 3.5: 397 Billion Parameters and an Agentic Ambition

Alibaba dropped its latest model today — Qwen 3.5, a massive 397B-parameter open-source model explicitly designed for the "agentic AI era." The company's self-reported benchmarks claim it outperforms GPT-5.2, Claude Opus 4.5, and Gemini 3 Pro across key tasks — though notably, DeepSeek comparisons are conspicuously absent from the materials.

The focus on agentic capabilities (multi-step reasoning, tool use, autonomous task completion) signals where China's AI race is heading. The fight is no longer just about raw intelligence scores — it's about which models can actually do things in the world. Alibaba releasing this as open source is a strategic move to build developer adoption globally while maintaining Qwen as the de facto foundation for China's AI ecosystem.

→ CNBC: China's Alibaba unveils new Qwen AI agent model
→ Reuters: Alibaba unveils Qwen 3.5 for agentic AI era

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📉 Big Tech Bleeds $1.3 Trillion in 2026

Investor patience with AI spending is cracking. A Reuters analysis of market cap changes shows Big Tech has collectively shed roughly $1.3 trillion year-to-date in 2026. Microsoft is the hardest hit — down 17–20% YTD, wiping approximately $613 billion in market cap — as competition from Gemini 3 and Claude erodes its once-dominant position. Amazon and Nvidia have also taken significant hits.

The message from markets is blunt: building cutting-edge AI is not enough. Investors want to see that spending translate into earnings, not just capability headlines. Notably, TSMC and Walmart are outperforming — suggesting the market rewards AI infrastructure and application more than frontier research alone.

→ Reuters: Global markets AI spending reckoning

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🤝 Infosys + Anthropic: Enterprise Claude Deployment

Infosys and Anthropic announced a strategic collaboration to bring Claude — including Claude Code — into enterprise environments across telecom, financial services, manufacturing, and software development. Infosys will establish a dedicated Anthropic Center of Excellence, with telecommunications as the first vertical to receive focused deployments.

This follows a pattern of major consulting and services firms locking in partnerships with frontier AI labs to capture enterprise AI implementation contracts. For Anthropic, it's a significant step toward revenue diversification beyond consumer ChatGPT-style products.

→ Tribune India: Infosys and Anthropic collaboration

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🧠 Google Opens Gemini 3 Deep Think API

Google is offering early API access to Gemini 3 Deep Think, its extended reasoning mode for developers and researchers. According to DeepMind's blog, the model has "significantly outperformed" its previous IMO-Gold standard on Olympiad-level math problems — meaning it's pushing into territory that, until recently, only human mathematical geniuses could reach.

→ IT Brief Asia: Google expands Gemini Deep Think for research APIs

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🎬 ByteDance's Seedance 2.0 Launches Free to the Public

ByteDance's Seedance 2.0 video generation platform went live today with free public access. The browser-based platform supports text-to-video and image-to-video (including 2-frame interpolation) — no install required. Pro plans start at $9/month for heavier usage.

This is another shot across the bow in the AI video generation space, putting pressure on Sora, Runway, and Kling. ByteDance entering with a freemium model is a play for creator adoption at scale.

→ Pinion Newswire: Seedance 2.0 launches

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🇮🇳 India AI Impact Summit: Sovereign LLMs Take Center Stage

The India AI Impact Summit (February 16–20, New Delhi) — billed as the first global AI summit held in the Global South — is in full swing. Today's sessions are expected to feature unveilings from Sarvam AI and IIT Bombay's BharatGen, both developing India's sovereign large language models. On the payments front, NPCI launched FiMI, a specialized AI model for the UPI payments sector.

India's push for AI sovereignty is notable: the country wants models trained on Indian languages and data, controlled domestically, not dependent on U.S. or Chinese infrastructure.

→ Indian Express: India AI Impact Summit 2026 live updates

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🗑️ OpenAI Officially Retires GPT-4o

It's the end of an era. OpenAI removed GPT-4o from ChatGPT on February 13, completing the full transition to the GPT-5 family (GPT-5.2 and GPT-5.3-Codex). For many users, GPT-4o was the model that defined their AI experience — capable, fast, and multimodal. Its retirement marks how rapidly the frontier moves.

→ Dataconomy: OpenAI retires GPT-4o and legacy models

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🌍 Meta's Omnilingual ASR: 1,600+ Languages Supported

Meta AI released an open-source multilingual speech recognition system supporting over 1,600 languages — including hundreds of low-resource languages that major ASR systems have historically ignored. It's a meaningful accessibility play that could bring voice AI interfaces to communities that have largely been excluded from the technology's benefits.

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🎓 Arena.ai: $50K Grants for AI Evaluation Research

Arena.ai (operators of LMSYS Chatbot Arena) announced academic partnership grants of up to $50,000 for researchers working on AI evaluation methodology. Deadline: March 31. A quiet but important initiative — better benchmarks and evaluation frameworks matter enormously for the field's direction.

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🔍 Analysis: Three Themes Converging

Today's stories point to three intersecting pressures reshaping AI in 2026:

1. Safety as a competitive differentiator (and liability). Anthropic's Pentagon standoff, India's sovereignty push, and Meta's accessibility work all reflect a world where who controls AI and what limits it observes are becoming as important as raw capability. Anthropic is betting that holding the line on safety makes them more trustworthy long-term — even if it costs short-term government contracts.

2. Agentic AI is the new frontier. Alibaba's explicit framing of Qwen 3.5 for "the agentic era," Google's Deep Think API, and enterprise deployments through Infosys all point the same direction: the race to build AI that can take multi-step actions in the world. Capability scores are table stakes. Autonomous action is the prize.

3. Market patience is running out. The $1.3 trillion wipeout in Big Tech's market cap is a structural signal, not just volatility. Investors want returns, not roadmaps. AI companies that can demonstrate actual business value — not just impressive demos — will be the survivors of this cycle.

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