FTI Consulting News Bytes – 26 April 2024

FTI Consulting News Bytes

This week, we start with some of the world’s biggest tech and AI firms agreeing to follow new online safety principles to combat the spread of AI-generated child sexual abuse content. Next, US Congress has approved a bill banning TikTok unless owner ByteDance sells the platform, amid growing US-China trade wars. Elsewhere, Tesla is to accelerate the launch of new models following a first fall in quarterly revenue since 2020. Elsewhere, UK media watchdog Ofcom has warned broadcasters about the importance of impartiality ahead of the general election following TV channels using politicians as presenters. Finally, new analysis from AJ Bell reveals that London’s big listed firms could see their valuations as much as double by moving to New York.

This week’s news

Tech giants agree to child safety principles around GenAI 

Some of the world’s biggest tech and AI firms have agreed to follow new online safety principles designed to combat the creation and spread of AI-generated child sexual abuse material. The Evening Standard reports that Amazon, Google, Meta, Microsoft and ChatGPT creator OpenAI are among the companies to have signed up to the principles, called Safety By Design. The commitments have been drawn up by child online safety group Thorn and fellow nonprofit All Tech is Human and sees the firms pledge to develop, deploy and maintain generative AI models with child safety at the centre in an effort to prevent the misuse of the technology in child exploitation.

US-China trade wars intensify with TikTok in the spotlight 

US app stores will be banned from carrying TikTok in 270 days unless its Chinese owner sells the video-sharing platform, according to the Financial Times. This comes after Congress passed a security package that includes measures to counter threats from China. The Senate on Tuesday voted 79-18 to approve the legislation, firing the starting gun for ByteDance to divest TikTok to avoid the ban. BBC News reports that TikTok will challenge the “unconstitutional” law. 

Tesla accelerates new models after first revenue fall since 2020 

The Times reports that Tesla has reported a fall in quarterly revenue for the first time since 2020 as it delivered fewer electric vehicles to customers due to slowing demand and intense competition worldwide. The world’s most valuable carmaker, said revenue in the first three months of the year was $21.3 billion, compared with $23.33 billion in the same period a year ago – the worst decline since 2012. Tesla, led by Elon Musk, said it had brought forward the launch of new models with the company saying: “We have updated our future vehicle lineup to accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025”. 

Ofcom warns broadcasters over election bias

UK media watchdog, Ofcom, has warned broadcasters about the importance of impartiality ahead of the general election after finding the need to strengthen the rules for TV channels that use politicians as presenters, according to the Financial Times. However, it stopped short of an outright ban after determining there was no clear consensus among British viewers for the move. Ofcom said that following repeated breaches of its rules, it needed to reinforce with broadcasters the prohibition on politicians presenting news. 

Double bubble: Listing in New York could see London firms’ market cap increase two-fold 

New analysis by investment platform AJ Bell reveals London’s big listed firms could see their valuations as much as double by moving to New York. As reported in The Times, “Shell, Diageo and British American Tobacco (BAT) could see their market capitalisations jump if their shares were priced based on the same earnings multiples as their New York-listed peers.” For example, energy giant Shell could see its value rise by almost a third, from £186 billion to £238 billion, by making the move to the US, based on the earnings multiple applied to rival ExxonMobil, an option CEO Wael Sawan says is still on the table, as per Reuters. Meanwhile, Guinness and Jonnie Walker maker Diageo could experience an increase of around a quarter in its value by making the switch, rising from 63.5 billion to £84.6 billion. Grappling with an economic downturn, inflation and rapid rises in interest rates, London’s equity valuations have been depressed in recent years.

Top Tweets of the Week

• Ingrid Lunden, Managing Global Editor, TechCrunch: Automation is not all about AI, despite what the hype implies. I discovered this deal values Tines around $600M – v decent bump showing numbers continue to grow for climb for co’s doing strong numbers.  https://techcrunch.com/2024/04/24/tines-taps-50m-to-expand-its-workflow-automation-beyond-security-teams/ tip @Techmeme
• Matthew Syed, Columnist for The Times & Sunday Times: Time to confront reality: the UK is heading for bankruptcy with public debt set to rise to 300% of GDP. We can no longer afford many of the entitlements we take for granted – and that applies to the super rich as much as everyone else
• Mark Kleinman, Sky News City Editor and Columnist for CityAM: In my column for today’s @CityAM the unfolding bidding war at Hipgnosis Songs Fund, a mysterious plan at the ICAEW to focus on – wait for it – audit quality, and a Treasury special adviser jumps out of the political frying pan into a water industry fire.

Number of the Week

40% – The expected increase in staff at Revolut this year amid rapid expansion, according to City A.M.