FTI Consulting News Bytes – 17 May 2024

FTI Consulting News Bytes

Glass-half-full UK IPO news was prominent during the early part of this week’s news cycle with reports of potential flotations for British microcomputer maker, Raspberry Pi and global fashion giant, Shein. Staying in the UK, Wales became the first nation to immerse itself in the metaverse as part of a bid to attract more tourists. Next, we look at concerns regarding social media and smartphone use among children, before reviewing the social media-fuelled rally around so-called “meme stocks”. Finally, we explore the long-term environmental impact of AI and the data centres required to run powerful models.

This week’s news

UK IPO market starts to bear fruit

This week, Reuters exclusively reported that fast fashion giant, Shein, was stepping up preparations for a London listing after its plans to float in New York faced more regulatory hurdles and pushback from lawmakers. Although a US-listing is reportedly still the preference, Shein has purportedly approached London-based fund managers for introductory meetings. The Company may pursue a secondary US listing, following a London IPO, if it deems the US political climate to be more favourable, a source added. Keeping with IPO news, The Times reported that British tech firm, Raspberry Pi, is planning to float on the London Stock Exchange at around £500m in what would be its second attempt to list on the market. 

Wales steps into the metaverse

Sky News reported that Wales has become the first nation to venture into the metaverse via its tourism body, Visit Wales. The metaverse, hosted on virtual mapping platform, Spatial, will allow potential visitors to experience top attractions in Wales. Commenting on the launch, Hannah Blythyn, Tourism Minister for Wales, said the metaverse had been created “to reach new audiences” and follows a report by a committee of MPs published last July which found Wales “lacked a coherent brand” to attract overseas visitors.

Social media and smartphones under scrutiny

There were several stories this week related to children’s social media and smartphone use. The UK government published new guidance for schools to help teach children about dangers online and the benefits of “rationing” time spent online. Conservative MP, Miriam Cates, called on the government to ban under 16s from social media, according to the BBC. Social psychologist, Sonia Livingstone, warned against alarmism in an interview with the Financial Times, arguing that what you do on your phone matters more than how long you spend on it. She points out that banning phones in the classroom hardly addresses the problem of screentime when students still use tablets and laptops. She concluded that while the Online Safety Act imposes strict rules, the issue requires a multifaceted response and regulators must keep pace as technology evolves. 

Meme stocks return with a roar

A rare social media update from “Roaring Kitty” prompted shares in video game retailer, GameStop, and cinema chain, AMC Entertainment, to soar on Monday. The man, whose real name is Keith Gill, previously led a stock market rally in so-called “meme stocks” back in 2021, putting pressure on hedge funds who had shorted the stocks. However, the latest frenzy showed signs of fizzling out as shares slumped on Wednesday, reported Reuters. Patrick Hosking at The Times warned that “meme stock mania” would only end up burning those late to the party and souring perceptions in investing. 

Power-hungry AI demands clean source of energy

As tech companies produce ever more powerful AI models, public concerns in the media about the environmental impact have grown louder throughout the week. The International Energy Agency estimated that AI could consume up to 10 times as much electricity in 2026 as it did in 2023. So, what’s the solution? The Verge suggested offshore wind farms could be the perfect power partner for AI given the high power loads and flexibility. Keeping servers at sea or underwater could also be a more sustainable cooling system. However, there are concerns that the development of renewable energy sources can’t keep pace with the rapid development of AI. The Financial Times highlighted research from Goldman Sachs suggesting US data centres use about as much power as all US solar farms currently produce.

Top Tweets of the Week

• Financial Times: Jeremy Hunt told the FT a homegrown tech giant was ‘definitely’ possible, and shrugged off foreign bids for London-listed companies as ‘part of how capitalism works’ 
• Press Gazette: A group of Republican operatives are launching a new outlet, Washington Reporter, to compete with Punchbowl News and Politico
• Sky News: Premier League clubs are set to vote on whether to scrap video assistant referees (VAR) after a proposal by Wolves. 

Number of the Week

$5.6bn – The collective amount Microsoft and Amazon have committed to invest in France to support its technology industry in the next few years.