FTI Consulting News Bytes – 21st April 2023
Welcome to FTI Consulting News Bytes – a roundup of top tech stories of the week from FTI Consulting’s TMT (Telecom, Media & Technology) team in London.
This week, we begin with the question: who owns a song created by AI? as discourses surges through media with the viral release of an AI-generated Drake and The Weeknd song. Next, we look at the latest M&A news in gaming, as Sega Sammy announces a $776m bid for Rovio, the makers of Angry Bird. Elsewhere, in the US, Joe Biden’s IRA and Chips and Science Act seem to have had a positive impact on investment, as companies have committed more than $200bn to US manufacturing projects since Congress passed the subsidies. Turning back to the UK, the Chancellor of the Exchequer, Jeremy Hunt, gives his views on artificial intelligence, as he calls for the UK to push ahead in harnessing AI technology. Finally, reports emerge that Apple could triple investments in India in the coming years.
This week’s news
Who owns a song created by A.I.?
Following the release of the now viral Drake and The Weeknd AI song, the New York Times explores who truly owns a song created by artificial intelligence. Lawmakers are beginning to contemplate new rules around authorship and ownership, as questions surrounding what is owed to the creators of original material begins to be asked. AI has advanced to such an extent that it is now capable of copying human works, by using artists’ productions as training data. Mark Lemley, Director of a Stanford Law programme focussing on science and technology, commented “courts in the future won’t be so sympathetic to machine copying”, and calls for a “fair learning” standard for using copyrighted material in machine learning. At present, only a human’s work can be copyrighted – but of course, this leaves a grey area about human work that has partly relied on generative AI to be created. Like the artificial intelligence which creates this music, intellectual property issues are a work in progress which will only continue to develop and get more complex.
Sega Sammy launches €706mn offer for Angry Birds maker Rovio
The Japanese games maker behind the Sonic the Hedgehog franchise has launched a $776m offer for Rovio Entertainment, the makers of the mobile game turned movie franchise, Angry Birds, the Financial Times reports. The bid is based on Sega’s projections of the global gaming market expanding by $263.3bn by 2026, with mobile gaming growing to 56% of the overall market in this time. The bid comes following Rovio’s 2018 profit warning a few months following its IPO, of which it never fully recovered in investor confidence, and for Sega, the bid marks its assertion to move into mobile games, as part of its traditional business – machines – continues to decline. With the amalgamation of two makers of household games, it’s possible Sega might soon be on the cusp of creating a super game, something like a ‘Fortnite of Minecraft’ level duet. Only time will tell.
US manufacturing commitments double following IRA and Chips Act
Companies have committed more than $200bn to US manufacturing projects since Congress passed subsidies including the Inflation Reduction Act (IRA) and the Chips and Science Act last August, the Financial Times reports. Both laws form part of President Joe Biden’s efforts to reduce US dependence on Chinese supply chains. The investment in semiconductor and clean tech investments is almost double the commitments made in the same sectors in the whole of 2021, and nearly 20 times the amount in 2019. The FT’s data shows that whilst most US manufacturing commitments since August have come from domestic suppliers, approximately a third are from foreign-headquartered companies. Cullen Hendrix, senior fellow at the Peterson Institute for International Economics, commented “The magnitude of these investments together is pretty staggering”, adding “This is attempting to go from zero to 100 miles an hour in terms of supply chain development in a way that we haven’t seen in quite a while”. In the UK, Sky News reported that the UK’s Chancellor, Jeremy Hunt, was ‘wary’ of new subsidies as companies look to US for government support as Britain’s only surviving home-grown battery producer said it was considering shifting manufacturing from the UK to the US to benefit from American subsidies.
UK Chancellor hunting victory in AI race
Speaking at the Politico TechUK launch event in London, Jeremy Hunt has said that the UK should push ahead in harnessing AI technology to tackle the its “growth challenge”; the Chancellor added that he doesn’t “buy” the argument that AI could lead to job losses, City AM reports. Hunt also expressed the need for the West to “win the race” and set global standards for the emerging technology through “super smart” regulation to ensure that it is a “force for good”, according to Politico. His comments on AI come as Politico reported that the U.K.’s security minister, Tom Tugendha, warned that the U.K. had to beat its rivals in the AI race, warning hostile states and criminals would use the technology to look for chinks in the UK’s cybersecurity armour. Leading industry figures including Sundar Pichai, CEO of Google, and Elon Musk have warned of the risks of the rapid advancement of AI. Later at the event, when questioned on the UK’s response to Biden’s policies including the IRA, Hunt confirmed that the UK would not compete with the subsidies, commenting “The thing that makes you competitive is the quality of your ideas, not the amount of your subsidies”.
Apple could triple investments in India
The next few years could see Apple double or triple investments in India, along with exports, according to Rajeev Chandrasekhar, India’s deputy minister for information technology. Chandrasekhar told Reuters “I am very confident that this Apple-India partnership has a lot of headroom for investments, growth, exports and jobs – doubling and tripling over coming years”. The minister’s comments came after a meeting with Apple CEO Tim Cook in New Dehli as Apple opens second store in the South Asian country, the world’s biggest smartphone market after China. Currently, the US tech giant mainly assembles iPhones in India through Taiwan contract manufacturers but plans to expand into iPads and AirPods, as it looks to cut reliance on China. Tim Cook confirmed that Apple was “committed to growing and investing across the country”.
Top Tweets of the Week
- Twitter: Tomorrow, 4/20, we are removing legacy verified checkmarks. To remain verified on Twitter, individuals can sign up for Twitter Blue here: https://twitter.com/i/twitter_blue_sign_up
- Thomas Pesquet, French astronaut: Never mistake trial for failure. As you say in #BocaChica, “it’s not an explosion, it’s just rapid unscheduled disassembly.” Congrats @SpaceX on this #Starship launch! #SpaceX
- Charlie Conchie, Investment Editor at City AM: We spoke with City Minister @griffitha at @InnFin Global Summit yesterday to chat through the lay of the land for #fintech and beyond.
Number of the Week
£15bn – The amount Jaguar Land Rover will invest in electric vehicles over the next five years.
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