FTI Consulting News Bytes – 24 May 2024

FTI Consulting News Bytes

This week was packed with significant developments across the sector driven primarily by AI news. At the Second Global AI Summit, leading companies including Google, Meta, and Microsoft pledged to develop AI responsibly, supported by commitments from major global economies. AI regulation was under the spotlight this week as the UK passed the Automated Vehicles Act, allowing fully autonomous self-driving cars on its roads by 2026. The EU has also approved the world’s first major AI regulation, the AI Act, aimed at ensuring transparency and accountability in AI applications. We then explore new research that reveals that AI skills can significantly boost salaries and productivity, positioning AI as a pivotal factor in the future of the workplace and economic growth. Lastly, we look at a concerning trend, dubbed the “Sephora kids” phenomenon, which raises alarms about children’s exposure to potentially harmful online content and the growing influence of social media on young consumers.

This week’s news

Second global AI summit secures safety commitments from companies

Sixteen companies at the forefront of developing artificial intelligence pledged to develop the technology safely at a time when regulators are scrambling to keep up with rapid innovation and emerging risks. Global tech firms such as Google, Meta, Microsoft, and Open AI were backed by a broader declaration from G7 major economies, the EU, Singapore, Australia, and South Korea. According to Reuters, participants noted the importance of interoperability between governance frameworks, plans for a network of safety institutes, and engagement with international bodies to build an agreement at a first meeting to better address risks. 

Self-driving cars “will be on British roads by 2026”

Self-driving cars have been given the green light to operate on British roads within two years after a new bill aimed at regulating the vehicles passed into law. The law paves the way for the introduction of “level four” fully autonomous vehicles on the road and does not require a “safety driver,” allowing motorists to become passengers in their own cars. According to The Times, the Automated Vehicles Act sets out that when a vehicle is in a self-driving model, a passenger will not be responsible for how it performs and the burden of responsibility will lie on corporations such as insurance providers, software developers, or vehicle manufacturers.

The EU green lights world’s first major AI law

The European Union member states have given the final approval to introduce the world’s first major law for regulating AI. The AI Act is a groundbreaking piece of regulation that sets comprehensive rules around AI and gives the EU Commission the power to fine companies that breach the AI Act as much $38 million or 7% of their annual global revenues — whichever is higher. According to CNBC, the AI Act takes a risk-based approach to the technology and aims to regulate it based on the individual applications and their perceived threat to society. Compared to the US, the EU’s AI Act is more comprehensive and is designed to emphasize trust, transparency and accountability, while also ensuring the technology can boost European innovation.  

AI skills drive salary and productivity surge

As the demand for AI skills is on the rise globally, new research from PwC paints an optimistic picture of the future of AI in the workplace and highlights AI’s potential to boost productivity and create new industries, despite concerns about job displacement. The Times reports that UK workers with AI skills could receive a salary 14% higher than that of their peers, according to the research. As the UK looks to solve its productivity problem and bridge the economic gap with other nations, the report concludes that AI could be the “industrial revolution of knowledge work” and a key driver of efficiency.   

The “Sephora kids” era raises concerns about online content 

In an opinion piece, the Financial Times’ Cristina Criddle explores the Sephora kid phenomenon and highlights how these children are expected to have the greatest spending power in history. By the end of this year, more than $5.39tn globally will be spent on them annually and is forecasted to increase by $10bn each year. Cristina notes that Generation Alpha is the first to truly grow up with social media at its fingertips and copy older influencers online by showing off their “hauls” of items purchased or given to them, posting “shelfies” or GRWM videos. She adds that the online promotion of some brands to children is drawing increasing scrutiny, with some dermatologists telling the FT that some videos feature products with ingredients such as retinol, that could damage young skin.

Top Tweets of the Week

• Madhumita Murgia, AI Editor at the Financial Times: Can we agree we don’t want AI making up/telling bedtime stories to children, using generated voices? Or am I in the minority on this, which is why we constantly see this held up as an e.g/demo of a cool application?
• CNBC: NewsCorp and OpenAI strike “multi-year partnership” deal to use journalistic content improve ChatGPT
• Bloomberg Technology: Scale AI, a startup that helps top tech companies improve the data used to build artificial intelligence products, roughly doubles its valuation to $13.8 billion

Number of the Week

262% – The percentage Nvidia’s revenue has soared in the past quarter on record AI chip demand.