FTI Consulting News Bytes – 28 March 2025

FTI Consulting News Bytes

This week in TMT news, we begin by looking at the UK government, which has been busy following the publication of the Spring Statement. Of note, Rachel Reeves announced that a minimum of 10% of the Ministry of Defence’s equipment budget would now go towards novel technologies such as drones. In automotive news, it was revealed that Chinese automaker BYD surpassed Tesla in 2024 revenue, driven by hybrid sales. Next up, we focus on the news around technology entrepreneur Tom Adeyoola, who has been appointed Head of Innovate UK, leading the £1.1bn a year agency at a time of intense financial scrutiny. In the EU, lawmakers are pushing back against efforts to weaken the landmark AI Act, warning of potential risks to democracy, while in the UK, ambitions to integrate AI into public services are hampered by outdated IT systems and skill shortages.

This week’s news

New spending on drones and lasers will ‘revolutionise’ UK defence

Chancellor of the Exchequer, Rachel Reeves, this week announced a £2.2bn rise in defence spending, as the government looks to revolutionise the UK’s armed forces with investment into drones and laser weapons. Vowing to turn the UK into “a defence industrial superpower”, The Guardian reports that the chancellor used her spring statement to unveil plans aimed at boosting arms exports and reaching a target of spending 2.7% of GDP on the sector by 2027. A minimum 10% of the Ministry of Defence’s equipment budget will be allocated to novel technologies like drones and AI-enabled kit.

Chinese electric carmaker BYD sales beat Tesla

The BBC reports that BYD, the Chinese electric vehicle maker, surpassed Tesla’s 2024 revenue, reporting $107bn in revenue largely boosted by an increase in hybrid vehicle sales. While both Tesla and BYD sold a similar number of EVs, 1.76 million and 1.79 million respectively, BYD’s inclusion of hybrids brought its total global vehicle sales to an immense 4.3 million.  Now, BYD has introduced a rival to Tesla’s Model 3, the Qin L which not only charges in five minutes, compared to Tesla’s 15, but is also half the price. Amidst economic challenges in China, BYD has effectively leveraged a combination of innovative technologies and competitive pricing to dominate the market, while Tesla has faced global backlash over Elon Musk’s political ties.

Tom Adeyoola to lead Innovate UK

Technology entrepreneur and business leader, Tom Adeyoola, has been appointed as Head of Innovate UK, the government agency responsible for supporting the R&D efforts of 450,000 organisations annually. Adeyoola, who founded Metail, the virtual fitting room service which was sold for an undisclosed sum, joins Innovate UK at a crucial time for the £1.1bn a year innovation agency currently facing scrutiny as the government reviews its spending. The TimesThe Times reports that Innovate UK’s flagship Business Group grant programme supported 10,600 technology businesses last year, with the cash and advice supporting those companies obtain £674 million in private-sector funding, while “creating and maintaining 6,713” jobs. Looking at the present and to the future, the support it can offer businesses has come into question, with one of its grants having already been placed on hold.

EU lawmakers warns against diluting AI Act

European lawmakers are raising concerns over efforts to weaken the EU’s landmark AI Act, describing proposed changes as “dangerous” and “undemocratic.” According to Sifted, the Act, considered the world’s most comprehensive AI regulation, emphasises ethical use, safety, and transparency but is under pressure to relax its enforcement by making key elements voluntary. Tech giants like Meta, Google and Spotify argue that the current rules are too burdensome, citing concerns around trade secrets, copyright, and risk assessments. A group of MEPs who helped draft the Act, warned that diluting it could lead to threats to democracy, such as election manipulation and misinformation. Final negotiations on the Act’s code of practice are underway, with intense lobbying continuing on both sides.

AI ambitions stalled by outdated government tech

The UK government’s plan to integrate AI across public services is at risk due to outdated IT systems, poor data quality, and a lack of digital skills, warns the Public Accounts Committee. According to The Guardian, nearly a third of central government IT infrastructure is considered “legacy,” yet many of these systems remain unfunded for upgrades. While the government aims to rapidly roll out AI-powered services to boost productivity, the PAC highlights concern over civil service pay deterring skilled talent and a lack of coordination between AI pilot projects. The committee calls for urgent funding plans, improved oversight, and increased transparency regarding the use of AI in government decision-making. Despite acknowledging the issues, the government insists it is already acting on many of these challenges through its digital transformation strategy.

Top Tweets of the Week

• Department for Science, Innovation and Technology: The UK is a magnet for AI companies and attracts finance from across the world, which will be accelerated by our new AI Growth Zones. This week Technology Secretary @PeterKyle met with @OpenAI, @AnthropicAI, @Nvidia, and @VantageDC to further position the UK as a global hub for AI investment.

• Reid Hoffman, Co-Founder of LinkedIn: Most jobs will be human + AI. And, yes, it’s also true that AI will do some jobs alone. Throughout history it’s been a net positive for society to have machines do more of the work, and give humans the ability to think, create, etc. AI can give *more* humans that bandwidth.
• Bloomberg Technology: 23andMe has initiated bankruptcy proceedings in the US to help facilitate a sale

Number of the week

$350m The price of one of the latest extreme-ultraviolet lithography machines made by ASML, a leading supplier to the semiconductor industry (The Economist).