FTI Consulting News Bytes – 20th January 2023

This week’s news

Senior economists expect global recession in 2023

Global executives, politicians, bankers and all manner of international figures gathered in Davos this week against the backdrop of economic uncertainty. According to a World Economic Forum poll of senior economists ahead of the conference, reported in Reuters, the global economy is likely to fall into recession in 2023. The 22 chief economists surveyed expect weak or very weak growth this year in Europe, while 20 of the economists said they expected weak or very weak growth in the US. Some 63% considered a world recession “somewhat/extremely likely” – with the majority citing a perfect storm of high inflation, high-interest rates, and a lower outlook for demand as key drivers.

Digital Transition Framework: An action plan for public-private collaboration

Timed for Davos this week, the World Economic Forum and FTI Consulting published a new report “Digital Transition Framework: an action plan for public-private collaboration”. The accelerated digital transition is unlocking economic and technological innovation, boosting growth, and enabling new forms of social engagement across the globe. Yet, the benefits from digital transformation have not been fully realised; compounded with macroeconomic and geopolitical headwinds that are forcing public-private leaders to make digital technology investment trade-offs. The framework sets out concrete actions and leading examples to support governments and corporates achieve common digital transition goals in the face of uncertainty. If you haven’t seen it already, please take a peek at the full report here.

A defining deal for generative AI?

Following a $1 billion investment in OpenAI in 2019, the Financial Times this week reports that Microsoft is considering a further $10 billion investment in OpenAI, a San Francisco-based research organisation, which would give the company a significant minority stake, and value OpenAI at $29 billion. The news follows the launch of ChatGPT, a generative AI ‘chatbot’ that can answer queries and produce text in natural-sounding language. While this concept is in its infancy, technology is already incredibly smart and could replace all kinds of things.  Many believe that the technology behind ChatGPT will soon have a deeper impact on the tech world and change the way we interact with computers. CEOs at Davos were buzzing about developments with Satya Nadella, saying AI will “completely transform” all of Microsoft’s products. We wonder what new start-ups we will see in the sector this year as venture capitalists seek to back the latest AI trend. As commercialising the technology gets in full swing, are we witnessing the start of the wave of Big Tech investment in generative AI-powered technology?

Disney Board seat row roars on

The entertainment conglomerate, Disney, has this week defended its decision to deny Nelson Peltz a Board seat, stating that the investor “lacked the skills and experience” to help the Company.  This comes after Trian Fund Management, owned by Nelson Peltz, announced Peltz as a nominee for a Board seat at the Company, setting in motion a proxy battle. Trian Fund Management holds a 0.5% stake in Disney, worth roughly $900 million. The Wall Street Journal reported Peltz’s criticism of Iger’s handling of his succession, which resulted in a letter to the Board describing Disney as a company in “crisis” with its share price trading near eight-year lows. Unless Peltz settles with Disney, investors will vote on whether he should be on the Board later this year. Watch this space!

AVEVA CEO Peter Herweck sits down with The Times

This week the London Stock Exchange waved ‘au revoir’ to a longstanding British success story. The Times’ Business Editor Richard Fletcher sat down with AVEVA Chief Executive Peter Herweck at Davos on Monday to discuss the British software company’s acquisition by Schneider Electric. Herweck reiterated that AVEVA would remain autonomous and will continue to operate under the AVEVA name and brand. Companies look to AVEVA’s industrial software to find greater efficiency and sustainability as the world transitions to a net-zero future. Its software continues to help drive decarbonisation in the industrial economy and supports customers in asset-intensive industries such as energy and materials to digitally mature.

Top Tweets of the week

• Joshua Browder, CEO of Do Not Pay: Today, DoNotPay is launching a chatGPT extension that reads the Terms and Conditions, leases and flags anything that is non-standard to all our customers
• Peter Campbell, Global Motor Industry Correspondent at the Financial Times:  BREAKING: Britishvolt has filed to appoint administrators   High Court filing submitted on Tuesday  Weekend efforts to secure funding failed  Staff meeting expected at lunchtime
• Hannah Bechelet, ITV Reporter & Presenter: I’ve been sent this story by a few @ITVCentral colleagues today as I am known to take a cake into the office. Maybe I shouldn’t?!

Number of week

2700 – An estimated 2,700 members of the global elite travelled to Davos by train, plane and of course chauffeur driven automobiles

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