FTI Consulting News Bytes – 15 November 2024

FTI Consulting News Bytes

This week, we start by looking at the cautious return of advertisers to X, as Elon Musk and Donald Trump’s relationship is causing some brands to consider the pros and cons of rejoining the social platform. Next, we discuss Amazon’s new partnership with The Junction, launching a new Multibank in Middlesbrough and supporting thousands of families in need with essential goods. Moving on, Volkswagen and Rivian have entered a $5.8 billion joint venture to share critical technology in the face of growing competition from Chinese competitors and slowing EV sales. We then look at the £3 billion lawsuit consumer group Which? has brought against Apple, claiming the tech firm breached competition law by “locking” 40 million Apple customers into using its iCloud storage service. Finally, genetics testing company 23andMe has reported seven straight quarters of decline, with CFO Joe Selsavage warning that if the firm does not receive extra funding for the coming year there will be “substantial doubt” over its survival. 

This week’s news

X marks the spot

Advertisers are eyeing a cautious return to X as Elon Musk’s close alignment with Donald Trump hints at a potential political influence boost for the platform, according to the Financial Times. While X has seen some major brands depart over concerns around content moderation, with groups such as Disney, IBM and Apple leaving the platform last year, Musk’s recent support for Trump’s campaign and a new influential role in his administration as the of co-lead of the Department of Government Efficiency, as reported by TechCrunch, could shift sentiment. However, advertisers remain torn – X has become, in the words of an unnamed top executive critic at an advertising company, “An Elon echo chamber,” going onto suggest that “many clients do not want to be part of that.” Meanwhile, other commentators have called it a high-stakes opportunity for political sway. “Trump’s victory may well mean brands give X a second chance in 2025,” said Richard Exon, founder of ad agency Joint, but warned they “will be wise to proceed with extreme caution”.

Amazon delivers hope with new Multibank

According to BBC News, Amazon has partnered with The Junction charity to launch a new Multibank  in the Tees Valley in Middlesbrough, aiming to support 75,000 families. The centre will collect essential household items like clothing, toiletries, and crockery from businesses, including Amazon, and distribute them to those in need. Former Prime Minister Gordon Brown, who co-founded the Multibank initiative with Amazon, praised the partnership, saying that it would provide “a huge boost for low-income families” as well as being better for the environment. This new centre is the fifth in the UK, joining initiatives in Scotland, Wales, Greater Manchester and London. John Boumphrey, Amazon’s UK Country Manager, said he was “incredibly proud” of everyone’s “commitment to grow the Multibanks”. Five million products have been given by Multibanks to more than 500,000 families since the scheme began in 2022, he said.

Watts the deal? VW and Rivian Spark a 5.8 billion partnership

Volkswagen (VW) and Rivian are charging up the electric vehicle market with a $5.8 billion alliance set to electrify the industry, reports the BBC. With Rivian battling losses, this partnership gives the automaker a financial boost as it prepares for the 2025 launch of its affordable R2 SUV. Meanwhile, VW plans to integrate Rivian’s innovative tech into its electric lineup, aiming to launch new models by 2027. The companies said in a joint statement that “by combining their complementary expertise, the [they] plan to reduce development costs and scale new technologies more quickly.” As both companies shift gears to accelerate their EV ambitions, the race to dominate the market just got a lot more competitive. 

Which? brings £3 billion lawsuit against Apple

Apple is facing a near £3 billion lawsuit brought by consumer group Which? over claims the tech firm breached competition law by “forcing” 40 million Apple customers in the UK into using its iCloud storage service. The group also claims Apple has been charging “rip-off” prices and that Apple customers could be entitled to a payout averaging  £70 if the claim is successful. Anabel Hoult, Which?’s CEO, said “we believe Apple customers are owed nearly £3 billion ($3.75 billion) as a result of the tech giant forcing its iCloud services on customers and cutting off competition from rival services.” Apple rejected the accusations from Which? stating it believes in providing consumers with choices and “users are not required to use iCloud, and many rely on a wide range of third-party alternatives for data storage. In addition, we work hard to make data transfer as easy as possible – whether it’s to iCloud or another service.”

The end of 23andMe’s drug discovery dream

The Financial Times reports that genetics-testing company 23andMe has sounded the alarm on its future, saying it needs a financial lifeline to carry on. The Silicon Valley company’s once-celebrated “spit kits” are not as popular as they used to be, with revenue slipping to $44 million this quarter – marking seven straight quarters of decline. The Company has been rapidly cutting costs, laying off 40% of its workforce and ditching dreams of drug development. CEO Anne Wojcicki’s plan will now be to focus on genetic testing and data sales. But with subscribers dropping from 2.9 million to just 562,000, 23andMe might need more than good genes to keep going.

Top Tweets of the Week 

• Emily Nicolle, Crypto Blogger at Bloomberg: scoop: the UK will revive two key pieces of legislation this month that’ll pave the way for future crypto regulation, amid concern that startups could flee to the US under a pro-crypto Trump administration. story w/ @EllenAMilligan https://t.co/869IIcF4GA
• Ryan Browne, Tech Correspondent at CNBC: There’s a concept in Europe that’s gaining a lot of traction: “Sovereign AI.” Tech firms are increasingly localizing infrastructure for AI workloads in Europe. There’s also a push for AI models that are more reflective of European language and culture. https://t.co/fRWYxCWgmo
• Eric Geller, Freelance Cybersecurity Journalist:  What will Trump do with Biden’s cyber agenda? Say goodbye to critical infrastructure security regulations, anti-spyware efforts, and AI safety, and say hello to more hacking against China. My new story for @WIRED: https://t.co/GrTm7FtHcD

Number of the week

300,000°C – The major milestone temperature hit by New Zealand start-up OpenStar who created plasma for 20 seconds in its first experimental reactor, according to the Financial Times.