FTI Consulting News Bytes – 22 March 2024

FTI Consulting News Bytes

We start this week with plans introduced by the European Union to safeguard the upcoming parliamentary elections from AI-powered disinformation across big tech. Elsewhere, we cover the news that Hindenburg Research has suggested that the $80 billion data centre provider Equinix has been selling shareholders an “AI pipe dream”. Next, we look at the US government’s decision to sue Apple for allegedly unfairly using its market dominance in the smartphone sector against its competitors. Staying with big tech, we highlight coverage of Open AI’s ChatGPT facing scrutiny for not dealing with copyright-infringing GPTs on the platform. Lastly, we cover reports that Apple could soon be using Google’s Gemini AI engine on their new iPhones as the company prepares to launch iOS 18 later this year. 

This week’s news

The EU is imposing election safeguards on Big Tech 

Online platforms including X and TikTok will be subject to European Union (EU) fines according to the Financial Times, for “lax moderation” in a move that will end years of self-regulation for the industry. Under the proposals, which are set to be adopted by the European Commission as soon as next week, online platforms which fail to “adequately tackle” AI-powered disinformation could face fines of up to 6% of global turnover, and will also be required to prove close working with cyber security agents across all 27 of the EU’s member states. As one unnamed EU official put it: “Social media platforms need to show that they are complying or explain what else they are doing to mitigate risks. If they don’t explain, we issue a fine.”  

Hindenburg Research strikes again, accusing data centre REIT Equinix of selling a “AI pipe dream” 

The short seller, whose very name strikes fear into the hearts of companies worldwide, announced on Wednesday that it had taken a short position against Equinix, CNBC reports. Hindenburg also accused the $80 billion data centre provider of manipulating key metrics to boost the appearance of profitability. Backed by former Equinix employees and executives, who allegedly told Hindenburg that the pressure to misclassify capex as growth rather than maintenance came “from top management,” Hindenburg claims that Equinix reported maintenance expenses as spending on growth, creating the illusion that “the company’s cost to maintain its revenue base is lower than it actually is.” Equinix shares fell 3% overall on the day of Hindenburg’s announcement. 

The United States of America vs Apple 

The Financial Times reports that the US is suing Apple for allegedly quashing competition from rivals and limiting consumer choices with its dominant power in the smartphone sector. The landmark lawsuit, filed by the US Department of Justice as well as 16 state and district attorneys, accuses the company of imposing contractual limitations on developers at the same time as making it more difficult for users to switch devices, as well as using its market power to crush the growth of innovative apps and messaging services, reduce the appeal of rival smartwatches, keep rival tap-and-pay apps from its devices and block the development of game streaming apps. Apple’s response called the lawsuit “wrong on the facts and the law.”

Open AI chatbot runs into teething issues 

A TechCrunch investigation has found that Open AI’s chatbot ChatGPT is filled with copyright-infringing GPTs that imply a light touch when it concerns OpenAI’s moderation efforts. The investigation suggests a number of created GPTs could be violating copyright rules and bypassing AI content moderators to create characters and content from popular movies to then sell. Despite stringent rules to prevent forms of plagiarism, efforts to clamp down on spam in the GPT store have so far been in vain. The article adds there has been little to no sign of improvement, stating “One might’ve assumed OpenAI — for all its talk of curation and the importance of safeguards — would’ve taken pains to avoid the obvious pitfalls. But that doesn’t appear to be the case.”

Apple and Google said to be in negotiations on Gen AI

In a widely reported story this week, Apple is said to be in discussions with Google in a deal to bring Generative AI to iPhones. While talks are believed to still be at an early stage, Apple’s desire to introduce new generative AI capabilities follows similar moves by other smartphone providers such as Samsung and Google themselves. A Bloomberg article added any such deal could be seismic but would draw the attention of regulators due to concerns around both company’s market share. 

Top Tweets of the Week

• Mustafa Suleyman, Microsoft AI CEO: I’m excited to announce that today I’m joining @Microsoft as CEO of Microsoft AI. I’ll be leading all consumer AI products and research, including Copilot, Bing and Edge. My friend and longtime collaborator Karén Simonyan will be Chief Scientist, and several of our amazing teammates have chosen to join us. @InflectionAI will continue on its mission under a new CEO, and look to reach more people than ever by making its API widely available to developers and businesses the world over. It’s been an amazing journey, with so much more to come. Thank you to everyone for your support. Things really are just getting started.
• Richard Branson, Founder of Virgin Group: Well, there’s a first for everything. Ukraine’s Soledar salt mines are now in Minecraft, thanks to @U24_gov_ua…And so am I! You can meet me in the world of #Minesalt and play the virtual game while helping to rebuild a school in Ukraine: https://u24.gov.ua/minesalt #Minecraft
• Mashable, Everything announced at the 2024 Microsoft Surface event

Number of the Week

$8.5bn – The amount Intel could receive from the White House to grow US-based chip production, according to The Verge.