FTI Consulting News Bytes – 26 January 2024

FTI Consulting News Bytes

Moving on from Davos, it’s tech news that is strutting down the couture runway this week. Fantasy meets the real world as ElevenLabs, the two-year old voice AI startup was announced as the first unicorn of 2024. Newzoo predicts the gaming industry will generate $189 billion this year, up from $184 billion in 2023. Next, Japan is living in the year 3000, having turned to robots to solve its labour shortage crisis. Elsewhere, electric vehicles are facing serious challenges and we’re beginning to wonder whether the EV bid has backfired. Finally, we spotlight a viral, eyebrow-raising AI customer service story that’s a big no no.

This week’s news

Voice AI startup ElevenLabs gains unicorn status

ElevenLabs becomes the latest tech company to reach unicorn status following a $80 billion Series B fundraise, Reuters reports. Led by Sequoia Capital and venture capitalist, Andreessen Horowitz, to name a few, the two-year old is now valued at an immense $1.1 billion. The valuation rides the upward artificial intelligence wave, and artificial generation of voices. Now joining the ranks of tech giants Revolut, Airbnb and OpenAI, newfound financial backing drives ElevenLabs to the forefront of audio technology, with it no doubt set to be in-part involved with almost every video game voice character, movie and television dubbing, and audiobook in the future.

Global games market expected to grow to $189bn in 2024

Global leader in video gaming and gamer data, Newzoo, has, in its latest report, reported it estimates the global gaming market to generate $189.3 billion in 2024, Games Industry reports. Set to be a “lean year” for games companies, data firm predicts, plus generative AI “won’t significantly impact game production at scale in 2024” After what has certainly been a rocky year for gaming, with layoffs coming more frequently than game releases, the forecast is welcome industry-wide. The main growth drivers are expected to be the install base of Xbox Series and PlayStation 5 sales. With fewer news releases set for 2024, the industry will be heavily relying on sequels, leveraging existing IP’s and exploring small-experience AAA titles as increasingly more players say bye-bye to big, flashy productions. It appears how we consume gaming is changing… it’s going to be a year to watch.

Japan turns to AI and robots to tackle labour crisis 

One of Japan’s biggest problems is its lack of labourers: the country faces a chronic labour shortage which shows no signs of abating, with RWI estimating a shortage of 11 million people by 2040, according to the FT. As a potential solution, Japan is exploring the introduction of avatars, robots and AI in key sectors including construction, trucking, farming (43% of Japan’s farmers are aged 75 or over) and retail: sectors which up until now were considered to be at lower risk to significant impact from AI. With increased labour costs, new laws around overtime and working hours regulations, and a steadily shrinking population, it’s no surprise that Japan has turned to innovative solutions: the question is whether this innovation will prove to also be the solution.

Has the EV bid backfired?  

As Nasdaq-listed electric van maker Arrival lurches closer to insolvency with its shares plummeting by 95% last year, those who sped into the electric vehicle hype are not necessarily finding that their investments have paid off. Telegraph highlights Addison Lee, Hertz and Uber are but others are selling off their electric vehicle fleets or struggling to get drivers adopting EVs at their desired rate. The lack of access to public charging facilities remains and the bureaucracy companies are facing to get them set up, Addison Lee reported earlier this year. The Department for Transport hopes there will be 300,000 chargers installed across the UK by 2030, but until then the infrastructure does not match the idea. Companies are also finding that EVs are proving more expensive to maintain and repair than initially expected. With energy prices higher than ever last year, EVs face a whole host of problems in becoming the new standard of vehicle.

When AI goes wrong and viral   

DPD had to be quick off the mark this week as its online support chatbot swore at a customer. It uses AI to answer queries and word quickly spread of the mix-up. The BBC highlighted the firm’s statement: “We have operated an AI element within the chat successfully for a number of years…An error occurred after a system update yesterday. The AI element was immediately disabled and is currently being updated.” Nevertheless, X went feral for the slip up, with the original tweet detailing the encounter racking up 800,000 views in a mere 24 hours. The incident is the latest in a series of AI chatbot faux pas which include a Chevrolet chatbot agreeing to sell a Chevrolet for $1 (not far off in today’s downturned automotive market…).

Top Tweets of the Week

• Ashley Beauchamp: Parcel delivery firm DPD have replaced their customer service chat with an AI robot thing. It’s utterly useless at answering any queries, and when asked, it happily produced a poem about how terrible they are as a company. It also swore at me.
• Up Next Designer, Fashion Commentator: SCHIAPARALIEN COUTURE👽☎️📀📼📡 The whole collection is a dialogue between the past and the future. The first look called the Mother Look was made of pre-iPhone technologies like a fan, flip phones, a calculator, CDs, microchips & the motherboards which creative director, Daniel Roseberry, grew up with 20 years ago. It’s old-world techniques with new world technological elements.
• Ethan Mollick, AI Professor at Wharton: It is startling to see how much of the world’s R&D spending comes from (mostly American) tech giants. The R&D spending of Amazon is greater than the R&D spending of all companies and government in France. Alphabet beats Italy. Pepsi’s R&D spending beats all sources in Nigeria.

Number of the Week

$3tn – Microsoft’s new market cap as of January 24, making it the second company ever to reach the milestone.