FTI Consulting News Bytes – 16 August 2024

FTI Consulting News Bytes

This week, we start by looking at Elon Musk’s clash with the EU over disinformation on X ahead of the interview with Donald Trump the tech entrepreneur hosted on his social media platform. We then turn to Softbank as the company decided to abandon its plans for AI chip production partnership with Intel. Next, we look at the latest considerations by the US Department of Justice on Google’s potential break-up and the opposing views on this. We also explore recent commentary from UK government officials on the future of supercomputing. Finally, we conclude by looking at the future of BT Group as Bharti Enterprises has agreed to buy a stake in the company from Altice.

This week’s news

Europe’s battle with Elon Musk 

Another tough week for Elon Musk as the tech entrepreneur clashed with the EU ahead of a planned interview with Donald Trump on X earlier this week. CNBC reported that the planned interview triggered a warning to X from Thierry Breton, the EU commissioner for the internal market, about the dissemination of “content that promotes hatred, disorder, incitement to violence, or certain instances of disinformation”. The warning also came on the back of recent violence in the UK, where social media platforms have been criticised for inciting riots across the country. Breton’s letter outlined a reminder of the “due diligence obligations” set out in the EU’s Digital Services Act (DSA). According to the Financial Times, not everyone in Brussels shared Breton’s view, noting the letter had not been approved by President of the European Commission Ursula von der Leyen. Nonetheless, if X is found to be in contravention of the DSA, it could face fines of up to 6% of its worldwide turnover, the Financial Times added.

Softbank’s U-turn on Intel tie-up  

SoftBank reportedly abandoned its plans to produce an AI chip with Intel, according to the Financial Times. Sources claim that the partnership did not come to life after the US chipmaker struggled to meet SoftBank’s requirements. SoftBank is now reportedly in discussions with TSMC. A source close to the discussions said that if an agreement with TSMC can be reached, Masayoshi Son might need another partner to provide the expertise in chip design that Intel had offered. This news comes as Intel finds itself in the midst of restructuring and cost-cutting efforts. According to CNBC, Intel has also sold its entire stake in British chip firm Arm Holdings, following its announcement earlier in August of a $10 billion cost-reduction plan. 

Google’s future in focus

The US Department of Justice is considering ordering Alphabet, Google’s owner, to divest parts of its search business which could include the Android operating system and Google’s web browser Chrome, according to Bloomberg. This comes following a US federal judge ruling that the company took advantage of the markets of online search and search text ads. Contrarily, former general counsel for the Federal Trade Commission, Alden Abbott, said the divestiture of Google’s various businesses would be “disastrous”, but added it would be unlikely. Abbot, quoted in The Guardian, said that: “A Google breakup would be one of the most economically destructive acts in the annals of American antitrust.” 

Supercomputing is back on the UK’s agenda

After shelving £1.3bn of funding promised by the Conservatives for tech and AI projects, the new Labour government insisted it will continue to support cutting-edge projects in AI and supercomputing. The Financial Times cited one government official who said that “Supercompute is still a huge priority for the government”, reiterating that it remains a priority for Peter Kyle, the UK’s Secretary of State for Science, Innovation and Technology. Peter Kyle also told the Financial Times that he was “gearing up for a bold approach” that would be based on an “AI action plan” currently being developed by entrepreneur and AI expert Matt Clifford, due in September. Following the backlash over the earlier decision, other government sources were quick to point out that the government’s ambition towards the UK’s supercomputing potential had not diminished, and there were simply some doubts over the allocation of the pre-existing budget.

Sunil Bharti Mittal’s bet on BT Group

Sunil Bharti Mittal’s conglomerate, Bharti Enterprises, has agreed to buy a 24.5% stake in BT Group from Patrick Drahi’s Altice. Mittal is quoted in The Standard stating that: “This investment demonstrates the confidence we have in BT and in the UK.” While in the Financial Times Karen Egan, head of telecoms at Enders Analysis, described Mittal as a “completely different kettle of fish to Patrick Drahi” adding that he “is not short term. He’ll be completely constructive and collaborative with BT, he really understands the holistic approach of telecoms”. The conglomerate said on Monday that its international arm would buy 10% of BT’s shares from Altice immediately and purchase the remainder after it had secured the necessary regulatory approval. 

Top Tweets of the Week

• Wired: “In a world first, Harvard biologists worked with Google to diagram a cubic millimeter of human cerebral cortex at the subcellular level, paving the way for the next generation of brain science.”
• City AM: “Monzo has once again taken first place in an official league table measuring whether customers would recommend their bank to friends and family, with the firm marking four years in the top spot.” 

Number of the Week

£100bn – UK entertainment sector set to be the biggest in Europe worth more than £100bn by 2028 (The Times)