FTI Consulting News Bytes – 2 February 2024

FTI Consulting News Bytes

This week, we start by looking at the earnings reported by several large US technology companies including Amazon, Apple, and Microsoft. We then turn to the most recent US Senate hearing as authorities question social media executives over poor child safety measures on their platforms. Next, we discuss the risks of AI as the Internet was flooded with explicit, fabricated images of Taylor Swift, and touch on the new legislative steps proposed by the US authorities to tackle the spread of “digital forgeries”. Moving on, we look at the new report published by AWS exploring the economic value of AI in Europe. Finally, we examine a hacking operation from China targeted at critical infrastructure in the US and the country’s response. 

This week’s news

‘Big Tech’ earnings round-up

This week has seen tech industry titans Microsoft, Alphabet, Amazon, Apple and Meta all report their latest set of earnings. For Microsoft and Alphabet, who reported their earnings on Tuesday, CNBC reports that the numbers were “good, but not good enough.” Whilst both companies reported revenue and earnings that exceeded estimates, the outlet suggests they were “punished” by investors who were left “disappointed.”  The publication added later in the week that Meta’s shares surged on better-than-expected results and a first-ever dividend payment, whilst Apple reported earnings that beat estimates for revenue and earnings, with a notable 13% decline in sales in China. Meanwhile, Amazon gave optimistic guidance for the first quarter as results topped estimates, and also announced Rufus, a shopping assistant that uses generative AI to help users search for products.

US Senate child safety hearing

The US Senate Judiciary Committee pressed chief executives of Meta Platforms, X, Snap, Discord, and TikTok this Wednesday on alleged shortcomings related to the safety of children on their platforms, writes Bloomberg. It marks the first time many of the executives, including X’s Linda Yaccarino, have testified before Congress. The session was particularly difficult for Meta’s Mark Zuckerberg, who issued a public apology to families of those who have been mistreated on his platform, or even died as a result of exploitation online, adds the Financial Times. In one rare moment of consensus, it writes, the executives reportedly agreed they were open to the idea of a federal regulatory agency focused on technology and social media.

A Swift response to AI deepfakes

The continued proliferation of sexually explicit, AI-generated deepfakes of Taylor Swift on leading social media platforms after they first spread on Elon Musk’s X, once again underscored the challenge of stopping the spread of fake images on the Internet. The Guardian reported that several US senators introduced a bill on Tuesday this week – known as the Disrupt Explicit Forged Images and Non-Consensual Edits Act of 2024, or the “Defiance Act” – that would criminalise the spread of non-consensual, sexualised AI-generated content. The new measure would allow victims to seek a civil penalty against “individuals who produced or possessed the forgery with intent to distribute it”, or those who had it knowing it was nonconsensual.

Unlocking the economic value of AI

Reuters cited a new report commissioned by AWS this week, which found a powerful 32% surge in AI adoption among European businesses since 2022. The report estimates that the positive economic impact of AI would amount to an additional €600 billion in gross value added for the European economy, bringing the estimated total economic impact of tech adoption in the region to €3.4 trillion by 2030. This comes at a time when the EU pursues its 2030 Digital Decade vision to digitally transform Europe in four key areas –  connectivity, digital skills, digital business and digital public services – by 2030. Tanuja Randery, Managing Director, EMEA, at AWS, noted that last year was pivotal as “the accessibility of generative AI created an appetite for experimentation among consumers and businesses.” 

US foils China-backed hack

On Wednesday, TechCrunch reported on the US government’s announcement that it had “disrupted” a China-backed hacking operation targeting critical infrastructure in the country, amid warnings that Beijing is preparing to cause “real-world harm” to Americans in the event of a future conflict. Speaking during a House of Representatives committee hearing on cyber threats posed by China, FBI director Christopher Wray said: “China’s hackers are positioning on American infrastructure in preparation to wreak havoc and cause real-world harm to American citizens and communities, if or when China decides the time has come to strike.”

Top Tweets of the Week

• Elon Musk, Co-founder of Neuralink: The first human received an implant from @Neuralink yesterday and is recovering well. Initial results show promising neuron spike detection.
• Daniel Ek, CEO and Founder of Spotify: After sitting with our legal team to parse through the fine print of Apple’s DMA announcement (that took a while), which is, at best vague and misleading, I wanted to share my thoughts. While Apple has behaved badly for years, what they did yesterday represents a new low, even for them.
• Mark Gurman, Chief Correspondent at Bloomberg: Netflix has built apps for the Nvidia Shield and the Facebook Portal. So I don’t buy the argument that the Vision Pro isn’t worth the investment. I don’t even know what the Shield is (sarcasm, but you get the point) and the Portal has been dead for over a year.

Number of the Week

$56bn – A judge voided the $56bn pay package of Tesla CEO Elon Musk, ruling that the company’s board of directors failed to prove “that the compensation plan was fair.”