FTI Consulting News Bytes – 28 June 2024

FTI Consulting News Bytes

The world’s biggest record labels are suing two AI startups in a bid to protect their intellectual property against tech that enables people to easily generate music based on existing songs. In more AI news, Etched, a startup founded by Harvard dropouts, has raised $120 million as it seeks to take on Nvidia and build a competitive chip called Sohu. Talking of rivals, VW has said it will invest up to $5 billion in Tesla competitor Rivian – the deal creates a joint venture enabling both companies to share technology. Next, the EU has accused Apple of being in breach of its Digital Market Act due to current rules on its App Store which prevent software developers from pointing users to other ways of downloading apps. Lastly, thousands of Chinese engineers and technicians are struggling to get Indian visas, halting the flow of skills for various industries.

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This week’s news

Record labels to sue AI startups over intellectual property breaches

Bloomberg reports that Sony, Universal Music Group and Warner Music Group are taking legal action against two AI startups over alleged IP infringement. As the music industry continues to grapple with AI infringements, the Recording Industry Association of America published a statement attacking AI startups Suno AI and Uncharted Labs Inc. over copyright infringement at an “almost unimaginable scale”. The companies are known for being able to help users simplify the production process using machine learning to generate music based on existing songs. The lawsuit is seeking up to $150,000 “per work infringed” but it further reiterates the challenge creative industries currently face with generative AI and producing content.

Harvard dropouts take on Nvidia 

Etched, a 2-year-old startup founded by Harvard dropouts and headquartered in California, raised $120 million this week to take on Nvidia in AI, writes CNBC. The startup is seeking to build a competitive chip called Sohu which will be used “to train and deploy AI models using “transformers”, the core architecture underpinning advancements like OpenAI’s ChatGPT.” Co-Founder and CEO Gavin Uberti said “If transformers go away, we’ll die. But if they stick around, we’re the biggest company of all time.” Nvidia was dethroned from its brief stint as the world’s most valuable company this week as $550 billion was wiped off its shares.

VW invests up to $5bn in Tesla rival Rivian 

German car maker Volkswagen (VW) has said it will invest up to $5 billion in US-based EV maker Rivian, a Tesla rival. Rivian shares jumped nearly 50% following the announcement of the deal, which will create a joint venture to enable both companies to share technology. The BBC writes that the “tie-up comes as competition intensifies between EV makers and Western countries move to impose tariffs on Chinese imports.” Founded in 2009, Rivian has yet to post a quarterly profit and saw a net loss of over $1.4 billion in Q1 2024.

EU and Apple in conflict over Digital Markets Act            

The EU’s Digital Markets Act (DMA) went into force last month, aiming to better regulate big tech companies and online market places. The bloc has now accused Apple of being in breach of the DMA as currently its rules for its App Store prevent software developers from pointing their users to other ways of downloading their apps. Apple has been threatened with billions in fines as punishment, according to The Independent. Thierry Breton, European Commissioner for Internal Market, said, “for too long Apple has been squeezing out innovative companies, denying new opportunities and choices.”

Chinese tech workers denied Indian visas  

India is facing a possible challenge in its bid to become a major “China plus one” manufacturing nation, writes the Financial Times. Thousands of Chinese engineers and technicians have had their business and employment visa applications rejected in the last few years. This comes despite many India-based manufacturers relying on Chinese talent to help operate their plants. “The flow of skills critical for the development of the electronics industry has halted,” said Pankaj Mohindroo, chair of the India Cellular & Electronics Association. In 2020, India implemented strict curbs on Chinese business amid the Covid pandemic and deadly border clashes in the Himalayas. 

Top Tweets of the Week

• Katie Collins, Tech, Climate & Culture Reporter at CNET: Another record for @taylorswift13 at Wembley – her Saturday night show saw 5.57TB of data used by fans. That’s more than any other concert at the stadium, as well as the UEFA champion’s league final
• Bloomberg Technology: SoftBank founder Masayoshi Son will sketch out plans to bring AI-infused medical care to Japan in a rare public appearance
• Zoe Kleinman, Technology Editor, BBC: OpenAI’s new Voice Mode doesn’t sound like it’s off to a great start. It’s now been delayed because it couldn’t “refuse certain content” or work quickly at scale. Oh and it did also include a voice that sounded a lot like Scarlett Johansson, despite her refusal to work with the product…

Number of the Week

1,901 – The number of days Wikileaks founder Julian Assange, who walked free this week, spent in London’s Belmarsh prison following seven years taking refuge at the Ecuadorian embassy (The Guardian).