FTI Consulting News Bytes – 19 July 2024

FTI Consulting News Bytes

This week, we start by looking at the growing excitement among prominent tech executives and Silicon Valley investors as Donald Trump’s presidential campaign gains momentum. We then turn to the UK where AI was surprisingly absent as the new Labour government laid out its legislative agenda in the King’s Speech. This was against a backdrop of several AI business and regulatory developments throughout the week. Microsoft is facing a new UK antitrust probe after hiring a number of senior executives from Inflection AI while Anthropic and Menlo Ventures are teaming up to launch their new Anthology Fund to support investment in AI-driven innovation. Finally, we look at TikTok, which lost its first battle with the EU this week as the court acknowledged ByteDance’s gatekeeper status. 

This week’s news

Trump’s tech line-up

Big Tech and Silicon Valley are warming up to Donald Trump, as his political campaign is gaining momentum. The Financial Times reported that America Pac –  a pro-Trump super political-action committee – has raised over $8.7 million from backers including Palantir’s Joe Lonsdale, Andreessen Horowitz founders and Sequoia’s Doug Leone. Andreessen Horowitz announced last year that it would support candidates who support regulation that enables emerging technologies. Many tech executives  – albeit not universally – began to feel uneasy about the Biden administration’s approach to Big Tech and cryptocurrency regulation, which has likely contributed to their right-leaning preference. Following Elon Musk’s $45 million-a-month commitment, as previously reported by the Wall Street Journal, the excitement is only going to accelerate, it seems.

AI absent from the King’s Speech

In the King’s Speech on Wednesday, the UK’s new Labour government announced a host of new tech pledges focused on cybersecurity and the “innovative” use of data yet details on the highly anticipated AI Bill were scant, according to The Independent. Contrary to reports in the Financial Times earlier this week, the King’s Speech only included a vague reference to establishing “the appropriate legislation to place requirements on those working to develop the most powerful AI models”. The BBC’s Zoe Kleinman admitted on Twitter that “for once [she] was underwhelmed by the amount of mentions of AI” which “didn’t get much of a look-in”. Instead, the government announced a Cyber Security and Resilience Bill to enhance regulatory power and business reporting on cyber threats and a Digital Information and Smart Data Bill designed to improve economic growth by enabling innovative data use including digital verification services. 

Microsoft faces UK antitrust probe

Microsoft’s investment into Inflection AI has triggered a UK antitrust probe, after the Competition and Markets Authority (CMA) said it needed to take a closer look at the hiring of former employees from the AI startup. Reuters reported that that the CMA is set to determine if Microsoft’s ties with Inflection AI should be treated as a merger, which could potentially stifle competition in the UK, with an initial decision due by 11 September this year. Microsoft earlier this year hired Inflection AI’s co-founder and almost all of its employees and agreed to pay the startup around $650 million as part of a licensing fee to resell its technology. The Wall Street Journal reported last month that the Federal Trade Commission in the US was already investigating whether the deal was structured in a way that would help avoid a government antitrust review.

A $100 million Anthology Fund

Anthropic and Menlo Ventures announced that the two companies are teaming up to launch a $100 million AI initiative “The Anthology Fund”, marking the latest entry in a crowded field of new AI backers. CNBC reported that the fund will be targeting companies which are using Anthropic’s Claude AI models to build their products. According to the announcement, Anthropic won’t take a stake in the companies, but will provide networking opportunities and credits for using Claude. The concept was modelled after the iFund, a 2008 partnership between Apple and Kleiner Perkins, but Matt Murphy, a partner at Menlo Ventures who previously worked at Kleiner Perkins, was quick to note the difference, highlighting that AI is moving much faster than iPhone development. 

TikTok’s digital battle with the EU

This Wednesday, the EU Court of Justice gave the green light to the European Commission’s decision to designate TikTok’s parent company ByteDance as a gatekeeper under the Digital Markets Act, dismissing all arguments presented by the company. Bloomberg noted that this will effectively apply the same regulatory requirements which currently apply to the likes of Apple, Microsoft, and Google. Despite the company’s appeal in November, claims were dismissed on the basis that ByteDance’s potential to monetise users and its consolidated position justify the Commission’s designation. This latest development will add further pressure on the Chinese-owned social media giant which also risks a ban in the US.

Top Tweets of the Week

• Financial Times: China deploys censors to create socialist AI
• Ryan Browne, European Tech Reporter, CNBC: Out of a 15/20 min long speech, King Charles mentioned only 1 line about regulating AI. Basically confirming Labour will introduce an AI bill. Light on detail – but significant symbolically.
• Marc Benioff, CEO, Salesforce: Life in San Francisco today: in a Waymo behind another Waymo. Welcome to the future! Our city is leading the AI revolution, with innovation driving us forward every day. Embrace the SF AI boom loop! #FutureForward #SFAI

Number of the Week

$50 trn– market cap Nvidia could reach in a decade, according to tech investor James Anderson, as reported in the Financial Times