FTI Consulting News Bytes – 13 October 2023

FTI Consulting News Bytes

This week, we start by looking at the tragic events unravelling in Israel and Gaza. A number of technology businesses have pledged support for Israel, while local founders and entrepreneurs are also making donations to support local forces. In this context, social media networks have once again been put to the test as misinformation about the conflict spreads online, prompting regulators to call for action. Adding to the geopolitical tensions, chip supplies get further attention as the US voices concerns over China’s collaboration with the US’s allies in the Gulf. We then turn to the UK, as Cambridge aims to become Europe’s Silicon Valley, hoping to double the number of unicorns over the next 10 years. Finally, we look at the Microsoft-Activision deal which finally got approval from the UK’s competition authority. 

This week’s news

Tech response to Hamas attack 

Following the attack on Israel earlier in the week, global tech leaders from Google, Oracle, X to Microsoft have pledged their support for the country, and venture capital firms are raising humanitarian aid funds as some of the 300,000 reservists the country has called up in recent days are among their local employees. Similarly, The Wall Street Journal reported that technology giant Nvidia cancelled its AI summit scheduled to take place on the 15th and 16th of October in Tel Aviv to ensure employees focus on their safety. In Israel, tech founders, venture capitalists and engineers who haven’t been called up are making donations to equip reservists, and support people who lost family members in the attacks.

Social media teeming with misinformation 

As the Israel-Gaza war escalates,  social networks have come under increasing pressure to remove misinformation and explicit imagery from their platforms. European Commissioner Thierry Breton urged X to take action, as the EU argued that disinformation on the platform has made it difficult for users to assess what’s happening in the region, writes CNBC. The platform has since said it “scrubbed or labelled” social posts including “illegal” content, according to Bloomberg, but the EU has opened the first ever formal probe into the Company under the newly approved Digital Services Act, notes the Financial Times. AI chatbots from Google and Microsoft are also accused of confusing some of the basic facts of the ongoing conflict, falsely claiming there was a ceasefire in place, the publication continues. CNBC reported that Meta’s content monitoring has also been called into question by the EU, urging the Company to remove disinformation and illegal content about the conflict.

Tensions over chips continue

The Financial Times reported that the launch of AceGPT, an Arabic-focused large language model in collaboration with Saudi Arabia’s King Abdullah University of Science and Technology, the Chinese University of Hong Kong, Shenzhen, and the Shenzhen Research Institute of Big Data, has stirred some fears that the collaboration could “jeopardise” the Gulf university’s access to US-made chips needed to power the new technology. Whilst the move is part of Saudi Arabia’s efforts to lead the regional development of AI, western officials have been cautious about growing technology transfer between the Gulf and China. The Saudi-China collaboration raises concerns about access to AI chips, the article concludes. These rising tensions are further complicated by the war between Israel and Hamas, as Israel remains one of the very few places where advanced chip production is done.

Europe’s Silicon Valley 

In the UK, Cambridge is set to become the  European “unicorn” hub by 2035. According to the Financial Times, the new initiative – Innovate Cambridge – driven by the government, the industry and local universities,  will aim to accelerate growth and double the number of multinational companies in the region. This forms part of the UK government’s bigger ambition to drive investment in technology in the area. The news follows the earlier reporting by The Times this summer noting government plans to turn Cambridge into Europe’s Silicon Valley, with housing secretary Michael Gove planning to build 250,000 more homes in Cambridge by 2040.

CMA approves Microsoft-Activision deal

The UK’s Competition and Markets Authority (CMA) gave the green light to Microsoft’s proposed $69 billion takeover of Activision Blizzard, writes Bloomberg among other media outlets. In the words of the Financial Times, “Friday’s approval marks a win for Brad Smith, the Microsoft executive who led the company’s legal campaign to defend a deal that many investors and analysts had written off earlier this year.”  The CMA on Friday gave final approval to a revised deal that involves Microsoft licensing cloud streaming rights outside of the European Economic Area to Activision’s past and future catalogue, including titles such as Call of Duty, to French games publisher Ubisoft. Microsoft and Activision have set an extended deadline of October 18 for completing the merger.

Top Tweets of the Week

• City AM: London has surged ahead of European rivals as a tech investment hub and has become the only City on the continent to climb into the top 10 for venture capital investment globally… (in spite of Brexit). https://t.co/5eQ9lucISw
• Amazon: Beavers are back in West London! Their release at Paradise Fields in Ealing is one of 22 rewilding projects across London supported by Amazon’s Right Now Climate Fund, helping to create a more biodiverse and climate resistant ecosystem. https://t.co/6axuAl8ktI
• Amy O’Brien, Editor, Sifted: NEW: Italy’s tech scene pales in comparison to neighbours like France. But there are signs this is slowly starting to change. More private money is being put aside for domestic tech, and young Italians are considering founding companies on home turf. https://t.co/sniksWDQGV

Number of the Week

40% – Employee cost reduction at DeepMind in 2022 financial year