FTI Consulting News Bytes – 19 January 2024

FTI Consulting News Bytes

Tech news is snowballing in this week! Inevitably, a major focus at Davos is how we grapple with tackling technology’s biggest risks – not least AI.  Vodafone and Microsoft signed a $1.5 billion to improve customer experience through GenAI services. In a bid to increase home-grown unicorns, the UK’s tech secretary has called for more funding into British startups and launched a new forum for industry and government collaboration. With upcoming EU digital competition rules, a group of small European companies have signed an open letter accusing Big Tech “gatekeepers” of not doing enough to engage with them. Lastly, OpenAI is collaborating with the Pentagon on a number of cyber security and defence projects. 

This week’s news

AI, Davos and snow

“The Davos elite embraced AI in 2023. Now they fear it”, writes The Washington Post. AI continues to be a key theme at the World Economic Forum but last year’s excitement over the launch of ChatGPT and the technology’s possibilities have given way to anxieties around misinformation, jobs displacement and a widening economic inequality gap. According to The Guardian, the UN secretary general António Guterres told world leaders that “powerful tech companies are already pursuing profits with a reckless disregard for human rights, personal privacy, and social impact.” Meanwhile IBM’s EMEA Chair, Ana Paula Assis, told Reuters that “clients are still very worried about how they bring those solutions within the boundaries of regulations and compliance.”

Vodafone signs $1.5 billion Microsoft deal for AI, cloud and IoT

Vodafone and Microsoft have agreed a 10-year partnership to improve the telecoms group’s customer service using Microsoft’s generative AI services. Reuters reported that Vodafone will invest $1.5 billion in AI and cloud services developed with Microsoft over the next ten years, while Microsoft will in turn become an equity investor in Vodafone’s managed IoT (Internet of Things) platform when it is spun out as a standalone business by April, and help scale Vodafone’s mobile financial platform in Africa. Margherita Della Valle, Vodafone’s group chief executive, said the “unique” partnership with Microsoft would improve the quality of its customer experience for consumers. The Times noted that the partnership announcement failed to lift Vodafone’s shares. The stock closed flat at 67¼p and is down by more than a quarter over the past year.

UK government sets sights on more home-grown unicorns 

The UK’s technology secretary Michelle Donelan has launched a “scaleup policy sprint” to increase the number of home-grown unicorns. She told Sifted that the UK has made good progress scaling up its tech companies, but the country should “continue to close the gap on the US” in terms of venture capital investment. This would be mean “pumping £5bn per year more into British startups” – enabling the country to become home to half of Europe’s tech unicorns by 2030. In a speech in London earlier this week, Donelan announced a new Scale-Up Forum which aims to bring tech founders, investor and the government together to address issues like access to capital and infrastructure.

European businesses say they’re being “left in the dark” by big tech gatekeepers 

Reuters and CNBC report that more than 20 “small” European companies including Ecosia, Qwant and Shibsted have signed an open letter accusing “Big Tech gatekeepers” of not doing enough to engage effectively with them and others in light of incoming EU digital competition rules. The firms have called on the European Commission and the European Parliament to do everything in their power to ensure the gatekeepers comply with the spirit of the Digital Markets Act, urging them to seek their input into how they plan to comply with new EU rules aimed at creating more competition. It comes ahead of the key 7 March deadline, by which Amazon, Alphabet, Apple, Microsoft, Meta and ByteDance are required to be compliant. “Gatekeepers have either failed to engage in a dialogue with third parties or have presented solutions falling short of compliance with the DMA. Businesses and consumers are largely kept in the dark as to what is going to happen after 7 March 2024” they said.

OpenAI collaborates with the Pentagon on cybersecurity projects

OpenAI is reportedly working with the Pentagon on a number of projects including cybersecurity capabilities, which is a departure from the startup’s earlier ban on providing its AI to militaries. Bloomberg reports that OpenAI is developing tools with the US Defense Department on open-source cybersecurity software — collaborating with DARPA for its AI Cyber Challenge announced last year — and has had initial talks with the US government about methods to assist with preventing veteran suicide, Anna Makanju, the company’s vice president of global affairs, said in an interview at Bloomberg House at the World Economic Forum in Davos on Tuesday.

Top Tweets of the Week

• Sabah Meddings, UK Business Reporter, Bloomberg: Fujitsu beginning to feel the heat: More than $1 billion has been wiped off the value of Fujitsu after the company’s European chief said it had a moral responsibility to provide compensation for its role in the UK Post Office Horizon scandal.
• Daniel Leufer, Senior Policy Analyst, Access Now: #AIAct updates. @POLITICOEurope just leaked what appears to be the most recent “4 column document” on the AI Act. This is the almost unreadable 1000 page behemoth with all the alternative versions of articles & what should be the final version adopted it in the deal.
• Sigalos MacKenzie, Tech Reporter, CNBC: Generative #AI discussions have dominated private & public talks at #WEF. But CEOs from Intel, Salesforce, OpenAI & the Nasdaq tell CNBC higher generative AI accuracy is needed to advance the technology into new use cases: https://cnb.cx/48I0Tog @sherman4949

Number of the Week

$22bn – The amount that four of India’s software giants – Tata Consultancy, Infosys, Wipro and HCL Technologies – have added in market value in just two trading sessions, driven by strong earnings and optimistic sentiment (The Economic Times).