FTI Consulting News Bytes – 23 June 2023

This week’s news

Tech under pressure for AI misuse 

Technology companies come under pressure as institutional investors become increasingly worried about the implications AI may have on human rights. According to the Financial Times, the initiative is driven by The Collective Impact Coalition for Digital Inclusion comprised of 32 leading financial institutions. In recent investor meetings, asset managers warned their portfolio companies about the potential risks linked to AI, such as surveillance, discrimination, and unauthorised facial recognition. Two months ago, in a bid to push for more regulation of the fast-growing industry, Norway’s $1.4 billion oil fund’s CEO Nicolai Tangen said he would set guidelines on how the 9,000 portfolio companies should use AI “ethically.” As regulators and organisations around the world assess potential risks, companies will likely remain under scrutiny in the near future.

UK AI regulators face trust crisis

The UK regulators chasing the rapid evolution and innovation in AI also come under the spotlight this week. Less than one in 10 MPs are “confident that existing UK regulators will be able to effectively govern AI”, according to new research conducted by YouGov in association with the AI policy network Appraise. Of the survey of 108 MPs, only 7% of Prime Minister Rishi Sunak’s own party are confident in regulators’ ability to handle the emergence of AI, as reported by UKTN. The worrying findings follow recent comments from the PM on his ambitions for the UK to be the “geographic home for global AI safety.” On the subject, James Boyd-Wallis, co-founder of the Appraise Network, commented to UKTN that “good policy is never created in a climate of paranoia… If we focus too much on long-term fear factors, we’re in danger of overlooking the benefits and risks of AI in the here and now.” Boyd-Wallis concluded that the AI sector needs greater debate about what is safe and what isn’t to strike the right balance and formulate effective policy.

The return of Masayoshi Son 

Breaking the seven-month silence, Masayoshi Son has drawn media attention as the CEO of SoftBank announced the Group is set to win the AI race. According to Reuters, the billionaire claimed he had been working on technologies he hopes will be realised by Arm. Following a number of setbacks in the past few years, Son is considering a visionary role, committing to spend the rest of his life being “an architect, to design the future of humanity”. He admits he is a heavy user of ChatGPT and is reportedly speaking regularly to OpenAI CEO Sam Altman. As SoftBank shifts to “offence mode”, it remains to be seen how the company’s strategy will evolve.

Six to become five in UK software

Elsewhere, following rumours of a deal earlier this month, the news broke this week that Swedish private equity group EQT was assessing a potential acquisition of Alfa Financial Software, a member of the FTSE All Share Software index. Alfa is one of only six members of this index in the London stock market, the fewest number in at least 15 years, according to the Financial Times’ Lex column. Six may soon become five if EQT chooses to finalise an offer by early July. Alfa’s largest shareholder, CHP Software and Consulting, has already committed to a deal with EQT at 208p per share worth £609m. Alfa competes against big enterprise software players including SAP and Oracle. These groups could look to bring Alfa into their own fold, according to Lex. The column concluded, however, that following the meagre 5% rise in Alfa’s share price on Wednesday following the news, “traders may doubt any rival offers or even one from EQT” in the coming weeks.

Microsoft’s quantum ambitions

Finally, we turn to big tech with news this week from Microsoft claiming a “breakthrough in physics” in its pursuit of the next supercomputer. The Times reported on Thursday that CEO Satya Nadella had finally discovered a method to make more reliable qubits, the building blocks of quantum computing. Microsoft hailed the breakthrough as the start of a “new era”, completing the first stage of a six-part plan to create a computer capable of solving some of the most complex issues faced in the world today. Qubits are inherently unstable, leading to errors in results from quantum computers that are currently limiting their usefulness. Microsoft’s ambition is to solve this stability issue. Significant issues of speed, accuracy and scale remain but more optimistic researchers believe that quantum computing technology may be operational “by the end of the decade, revolutionising everything from drug discovery to cryptography”, according to The Times.

Top Tweets of the Week

• Alex Heath, Editor at The Verge: I’ve confirmed that Mark Zuckerberg is serious about fighting @elonmusk and is now waiting on the details (if Musk decides to follow through). “The story speaks for itself,” a Meta spokesperson says re: Zuck’s IG post saying “send me location”.
• Katie Prescott, Technology Business Editor at The Times: “If you’re anxious about AI, get on and fricking use it!” says @Marthalanefox, President, The British Chambers of Commerce  (Reporting from The Times’ CEO Summit, London)
• Bloomberg Technology: Ocado shares jump 44% following a Times report on “speculation of bid interest” from tech firms such as Amazon.

Number of the Week

5,000  – The number of refugees Amazon has pledged to hire across Europe over the next three years to support people fleeing Ukraine and other crisis-stricken regions

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