GenAI Daily - February 17, 2026: ByteDance's Seedance 2.0 Sparks Hollywood Legal Battle, HBM Shortage Hits AI Supply Chain, India AI Summit Kicks Off
Top Story
ByteDance's Seedance 2.0 AI video generator has triggered a major legal confrontation with Hollywood, as studios and trade groups accuse the Chinese company of "blatant" copyright infringement just days after its launch. The Motion Picture Association CEO Charles Rivkin demanded ByteDance "immediately cease its infringing activity," while Disney and Paramount sent cease-and-desist letters alleging massive unauthorized use of their intellectual property.
The controversy erupted after viral clips showed AI-generated versions of Tom Cruise and Brad Pitt fighting in a post-apocalyptic scene, prompting "Deadpool" screenwriter Rhett Reese to warn "it's likely over for us." The tool can generate 15-second videos from simple text prompts and is currently available to Chinese users through ByteDance's Jianying app, with global rollout planned for CapCut.
Why it matters: This legal battle will set precedents for how AI video generators handle copyrighted content and could reshape the entire generative media landscape, forcing companies to choose between innovation speed and IP compliance.
Key Developments
Memory Shortage Creates AI Supply Chain Bottleneck
High-bandwidth memory (HBM) has become the scarcest component in the AI supply chain, with accelerators consuming an outsized share of advanced packaging capacity and premium memory output. This bottleneck is forcing manufacturers to prioritize data-center margins over consumer electronics, creating a "AI tax" that shows up in everything from PCs to smartphones. Memory is now a strategic constraint: when that line constricts, model training timelines slip, cloud inference capacity gets rationed, and smaller labs feel it first.
Impact: Supply chain control may determine AI market winners as much as model quality, giving advantage to companies with secured memory contracts.
India AI Impact Summit Showcases Global South Leadership
India hosts the AI Impact Summit 2026 from February 16-20 at Bharat Mandapam in New Delhi, marking the first major global AI summit in the Global South. The summit shifts focus from theory to real-world AI deployment, with India's Electronics and IT Minister announcing that home-grown AI models are ready for public release.
Startup Sarvam AI is set to unveil a larger voice-based model, while several Indian startups will present innovations including Cognitii for special needs education, Fifth Sense for sign language translation, Baeru for AI-driven waste management, and NariRaksha.AI for harassment prevention.
Impact: Positions India as a major AI governance player and could accelerate adoption of cost-effective AI solutions in emerging markets.
UK Tightens AI Chatbot Regulation
The UK government announced it will tighten enforcement of the Online Safety Act to cover AI chatbots, treating them as platforms with direct enforcement pathways including large fines tied to global revenue. This signals a shift toward requiring "duty of care" controls including stronger guardrails, auditable safety processes, faster takedown mechanisms, and better regulatory reporting.
Impact: Sets precedent for regulating AI systems as platforms rather than just tools, likely influencing global AI governance approaches.
Chinese AI "Red Envelope War" Escalates
ByteDance's Doubao AI launched a Spring Festival campaign distributing over 100,000 technology-themed gifts and cash red envelopes up to 8,888 yuan through the Spring Festival Gala. Chinese AI companies including Baidu, Tencent and ByteDance have rolled out digital red envelope initiatives with a total estimated value of more than 4.5 billion yuan.
Impact: Demonstrates how Chinese AI companies are using cultural events to rapidly expand user bases and compete for market share.
Product Launches
- Snowflake-OpenAI Partnership:
$200 million multi-year partnership makes OpenAI models natively available to Snowflake's 12,600 global customers, enabling AI agents to reason over governed data and take action across enterprise tools
- ServiceNow-OpenAI Integration:
OpenAI models become preferred intelligence capability for enterprises running 80+ billion workflows annually on ServiceNow platform, with GPT-5.2 built directly into enterprise workflows for end-to-end automation
(OpenAI)
Funding & Deals
- Anthropic - $30B Series G:
Sets $380 billion post-money valuation with revenue run-rate exceeding $14 billion, making it one of the highest-valued AI companies globally. Plans to channel capital into frontier AI research, expanded infrastructure, and enterprise product development
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Led by GIC and Coatue (TechStartups)
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Simile - $100M Series A:
AI startup developing technology that predicts human behavior by training models on extensive interviews and real-world data to simulate consumer decision-making and analyst questions
- Emerging from stealth (TechStartups)
Related reading: Check out this week's Deep Insights analysis for strategic context on enterprise AI adoption patterns and supply chain implications.
