FTI Consulting News Bytes – 27 October 2023

FTI Consulting News Bytes

It’s been a busy week in the world of TMT! Some of the world’s biggest tech companies released their quarterly earnings, with AI in the spotlight for most. AI was also at the center of debates at Bloomberg Tech Summit on Tuesday, especially to discuss its impact on the creative industries. We then turn to the latest innovations in robotics at Amazon’s Fulfilment Centres, before exploring the possibility of a secondary share sale from second-hand marketplace Vinted. Finally, a new quantum milestone has been reached, with a new world record for the first quantum computer with over 1000 qubits.

This week’s news

Big Tech Earnings

Earnings season is well underway with tech in the spotlight. Microsoft, Alphabet, Meta and Amazon all reported quarterly results this week. The major focus has been on how AI and Cloud services are fitting into the strategies of these companies. Microsoft posted strong results, with demand for new AI products prompting corporate customers back into spending (Bloomberg). Alphabet’s Cloud revenues missed estimates, but resilient advertising revenues meant the Company reported its strongest business growth in more than a year, according to the Financial Times. Meta also benefitted from resilient advertising revenues which grew 23%, and reported its most profitable quarter on record, according to The Times. Finally, Amazon’s Q3 revenue and earnings “blew past analyst expectations” with strong revenue growth in digital advertising and resilient consumer spending boosting its retail business, writes CNBC. 

AI in the Creative Industries – the end, or birth, of an era? 

FTI Consulting’s TMT team stopped off at this year’s Bloomberg Tech Summit in London to hear the latest thoughts on emerging tech, with AI unsurprisingly at the heart of most conversations. Creatives clashed with AI pioneers, grappling with the question of how film, TV and music will be impacted by AI technologies, reports Bloomberg. Victor Riparbelli, CEO of AI video generator Synthesia, explained that powerful LLMs like ChatGPT could not have been created without being trained on vast amounts of data available online. Hilary Krane from the Creative Artists’ Agency, whose client roster includes Hollywood stars Tom Hanks and Reese Witherspoon, dismissed this argument, quipping “maybe you can create a better product if you steal from other people.” Synthesia, for its part, always gets consent from individuals before creating their avatars – a practice that should become standard across the industry according to Krane. 

Amazon pilots the humanoid robot, Digit

Amazon unveiled its new bipedal humanoid robot, Digit, and robotic system, Sequoia, which are designed to take on “highly repetitive tasks” and improve the experience of employees. Digit has arms and legs, and can move, grasp and handle items like humans, while Sequoia integrates with other robotic systems to track inventory better. Amazon, which now has more than 750,000 robots working collaboratively with its human staff, said its robotics systems had created “hundreds of thousands of new jobs.” Amazon Robotics’ chief technologist, Tye Brady, told the BBC that people are still central to the fulfilment centre process given their ability to “think at a higher level, [and] diagnose problems”.

Vinted weighs €200mn share sale

With sustainable fashion booming, Vinted is weighing a secondary share sale that could be worth more than €200mn as the Company seeks to position itself at the forefront of the sustainable fashion industry. The Lithuanian startup, valued most recently in May 2021 at €3.5bn, is working with Morgan Stanley to consider options for its capital structure ahead of a potential IPO, the Financial Times reports. Discussions are at an early stage, and Vinted’s options range from selling new shares to its current capital structure, but a secondary share sale could boost its valuation and provide liquidity for early investors as the Company benefits from the growing demand for sustainable fashion and used clothing markets.

A quantum leap for Atom Computing 

California-based Atom Computing this week broke records by creating the world’s first quantum computer that exceeds 1,000 qubits – more than double the previous record holder, IBM’s Osprey machine, which has 433 qubits. A quantum bit, or “qubit”, is a basic unit of quantum information. In future quantum computers, large numbers of qubits dedicated to error-correcting will be required alongside programmable qubits. Atom Computing’s quantum computer is designed to easily scale up the systems and add more qubits to the grid so this is possible. CEO Rob Hays spoke to Forbes about the challenge of building the new machine.

Top Tweets of the Week

• Bloomberg Live: “VC downturn is slowing down investment in every category…climate I think is attracting more interest.” @TechstarsParis’ Raphaele Leyendecker on tech investments in the current economic climate. #BloombergTech
• Katie Prescott, Technology Business Editor at The Times: Yes – It’s time the drudgery of ‘life admin’ was given some proper recognition […] Organisations also should note that the burden of life admin often falls disproportionately on women, especially those with young children (kidmin and schoolmin can be hell). Thus supporting staff in this way can be an indirect blow for equality
• Tom Seal, Media and Telecoms Reporter, Bloomberg: UK space minister @GeorgeFreemanMP opening the London Stock Exchange this morning, before a roundtable with investors, business and government agencies on improving UK space investment

Number of the Week

32% – The amount by which shares in Kokusai Electric jumped on Wednesday on its stock market debut, valuing the chip equipment maker at $3.6 billion (Japan’s biggest IPO in five years).