FTI Consulting News Bytes – 25 August 2023

FTI Consulting News Bytes

Dominating global business column inches this week was news of SoftBank chip designer Arm’s IPO plans in the US market. Falling smartphone demand is forcing Arm to explore new sources of growth in the automotive and cloud computing markets. In streaming services news, Netflix is giving gaming a final throw of the dice announcing that its new games will be tied more closely to its shows. We’ve seen another leap forward in space technological advancement as India became the first country to land a spacecraft on the moon’s south pole. Meanwhile, as UK students received their GCSE results, a new survey revealed ChatGPT has been achieving better grades than students while Meta has launched a “universal language translator.”

This week’s news

Cashing in the chips: Arm eyes US listing 

As reported by the Financial Times, SoftBank’s chip designer Arm has unveiled a plan detailing its flotation. It’s a move that would be the biggest initial public offering in the US market in nearly two years, with an expected valuation of $60bn-plus. A quarter of the company’s revenues come from the Chinese market which is observably prone to economic and political risks and is controlled and owned locally – concerns which will be expected to be addressed by the firm. While its designs and products are used in almost every smartphone by approximately 70% of the world’s population, the smartphone market downturn has driven the company to look for new sources of growth. Cloud computing, automotive technologies and AI are among the markets which Arm seeks to expand into while it looks to drive up the value of its intellectual property. 

Netflix takes a bet on gaming 

Netflix is doubling down on its commitment to its game streaming services which entice customers to play games on their platform via their personal devices, according to The Times. The firm’s financial results last year indicated that fewer than 1% of users played its games. Despite this, Netflix has emphasised how its new games will be tied to its shows, with the announcement of Netflix Stories: Love is Blind revealing the game will be released in anticipation of the new season of its adjacent dating show. A difficult last 18 months has included a decline in subscribers as well as the emergence of rival platforms. Netflix remedied these challenges by reversing two long-held policies, password-sharing and the launch of an ad-based subscription service, which boosted subscriber numbers. Netflix has also remained somewhat unaffected by the losses suffered by the likes of Disney due to industry strikes deterring $1.5bn of spending. Despite the short-term financial stimulus gained from the password-sharing crackdown and strike action, executives have decided to leverage the advantages of Netflix’s technical infrastructure and active userbase to head in a new direction. 

Dancing in the moonlight: India’s lunar south pole landing

Earlier this week, India became the first country to land a spacecraft on the moon’s south pole. The lunar surface where the Chandrayaan-3 spacecraft landed is thought to contain water ice and over the coming weeks a rover will be deployed to study the mineral composition of the surface. The mission lays down the foundation for a potential long-term base with scientists hypothesising how the water ice could be used for fuel, oxygen and drinking water. Prime Minister Narendra Modi tapped into the triumphant mood of the country and waved an Indian flag in a conference call as the spacecraft came to land. Modi’s speech praised a “new India” and its “new beginning” with Sky News  commenting that the landing has “changed the geopolitics of space” by cementing India’s status as a major tech power.  

ChatGPT – as good as or better than students?

In around a quarter of university courses, ChatGPT may be as good as or better than students, New Scientist reports. Notably, this only reflects questions which require a clear answer and memory recall as opposed to critical analysis. The research, run by New York University Abu Dhabi, surveyed nine out of the total 32 courses, including computer science, psychology and business. In some cases, ChatGPT’s answers were significantly better – for instance, it achieved nearly double the average score of students in an Introduction to Public Policy course. Thomas Lancaster at Imperial College London said these results reveal an issue with university assessments which should encourage students to think critically. “If [better answers are] possible [with ChatGPT], it suggests that there are flaws in the assessment design.”

Meta’s new multilingual AI translation model

TechCrunch reported on Meta’s launch of SeamlessM4T which can translate and transcribe close to 100 languages across text and speech. Described by Meta as “the first all-in-one multimodal and multilingual AI translation model,” the new software is built on recent advancements made by the tech giant, such as text-to-text machine translation model, No Language Left Behind, which was released last year. SeamlessM4T’s launch has been received positively by industry experts, with GlobalData senior analyst Beatriz Valle highlighting its potential to improve large language models and other AI chatbots’ responses to prompts in non-English language. She noted; “With AI taking over the market, the dominance of English has become apparent, and creating robust models in a variety of languages is a social and commercial imperative.” Meta has also released the model for free under a research license in an effort to uphold its commitment to open science.

Top Tweets of the Week

• Adam Grant, Organisational Psychologist, Wharton: Trigger warnings are not effective. 24 studies, 7k people: alerts about upsetting content don’t prevent distress or promote learning. All they do is raise anxiety. The best way to shield mental health isn’t to sound an alarm beforehand. It’s to make support available afterward.
• UK Government Department for Science, Innovation and Technology: On 1-2 November 2023, governments, AI companies and experts from around the world will meet at Bletchley Park for crucial talks on the safe and responsible development of AI.
• Sabbah Meddings, UK Business Correspondent, Bloomberg: EXCL: Pret boss Pano Christou says London shops failing to bounce back post-Covid. Pret is moving away from the skyscrapers – only seven of the 78 stores opened since April 2021 are in central London. Christou thinks Pret could reach 1,500 in the UK. 

Number of the Week

99% – The percentage of the world’s smartphones powered by Arm’s CPUs