FTI Consulting News Bytes – 24 November 2023

FTI Consulting News Bytes

We start this week with Sam Altman’s reinstatement as CEO of OpenAI after a well-documented series of twists and turns. The UK government’s budget is then in focus as the statement included a pledge to spend £500 million over the next two years on computing power for AI models. In a move that is sure to make many lives easier, Apple is set to adopt a new communication standard next year, which should make communicating between Android and iOS devices smoother. Startup valuations are then under our scope as Sifted highlight it’s been a tough year for both startups and investors. Finally, we look at Black Friday spending, with the Financial Times reporting that consumers are holding back spending this year. 

This week’s news

Sam Altman reinstated as OpenAI boss   

OpenAI Chief Sam Altman will return to the company he co-founded, following an attempted boardroom coup last Friday, CNN Business reports. In a dramatic reversal, Altman was reinstated under an “agreement principle” which will see Atlman serve under the supervision of a new board of directors, the Company said late on Tuesday. Altman’s reinstatement has been perceived as a resolution to a crisis that pitted all of the Company’s employees and investors against the four-person board, the Financial Times claims. Following the news, Altman wrote on X (formerly Twitter), “I am looking forward to returning to OpenAI,” adding that “I love OpenAI and everything I’ve done over the past few days has been in service of keeping this team and its mission together.” 

£500m investment pledge to boost UK’s AI development 

In more AI news, the UK government pledged to spend £500 million over the next two years on computing power for AI models in its 2023 Autumn Statement. According to The Standard, the Government sees access to compute as the key to the UK creating a world-leading AI ecosystem, given that it is used to help develop new artificial intelligence foundation models. In his speech, Chancellor Jeremy Hunt said the funding would help create new “innovation centres to help make us an AI powerhouse,” with the article adding that it will bring the total planned investment in compute to over £1.5 billion. Industry expert Jonathan Boakes, Managing Editor at tech firm Infinum, was quoted in the article saying that the latest investment in AI was welcome but more funding for education around AI was needed.

Apple texting with Android users set to improve

Longstanding texting problems between Android and Apple owners will ease next year, the New York Times reports. Starting next year, Apple plans to adopt a new messaging standard – rich communications services (‘RCS’) – allowing for a smoother texting experience between iPhones and Android devices. With the changes, it should be less frustrating for iPhone and Android users to text one another, as Apple announced that photos and videos between these devices will be of higher quality, group messaging more reliable, and users will be able to turn on read receipts and send their locations in their texting threads. According to an Apple statement the RCS technology “will work alongside iMessage, which will continue to be the best and most secure messaging experience for Apple users.”

Downrounds surge for startups

Sifted via a PitchBook report covers the state of valuations for startups. The key finding Is that European tech downrounds have hit their highest levels since 2014 as 21.3% of raises this year priced a company lower than their previous round. Europe’s venture growth companies — Series E and beyond — have been the worst hit by lower valuations, with median valuation figures for 2023 sitting 26.1% lower than 2022. Non-traditional investors — which PitchBook defines as private equity investors, mutual funds, sovereign wealth funds, hedge funds, corporations and family offices have pulled back too. Investment from this group into European tech companies fell from €82.3bn in 2022 to just €32.4bn across the first three quarters of this year.

Black Friday spending  

This Black Friday, retailers are issuing larger discounts as they are having to work harder to tempt customers. The Financial Times reports that UK spending on presents and festivities will fall from £23bn in 2022 to £20bn this year, with more people saying they will not part with cash at all. They also note a “significant divergence in consumer confidence between the old and young, and the least and most affluent households.” In a survey, almost a quarter of respondents said they holding back because they were cutting back on spending, while 17 per cent said they did not have enough money to buy anything this year.

Top Tweets of the Week

• BBC News World: Meta requires political advertisers to mark when deepfakes used
• Tech Crunch:  Instagram now allows anyone to download public Reels.
• The Economist: Attempts to convene an International Panel on AI Safety could lead to the creation of other global organisations in the coming year. But setting them up will be as complex as the technology itself.

Number of the Week

9.6tn – The global estimated number of minutes watched on Netflix in 2021, according to Scott Galloway.