FTI Consulting News Bytes – 28th October 2022

This week’s news

Tech industry reacts to new PM Rishi Sunak’s ‘credentials’ to be tech industry ambassador

UK Tech News reported this week on the tech industry’s reaction to Rishi Sunak’s appointment as the UK’s new Prime Minister. Overall, the views of industry leaders such as Stephen Kelly, chair of entrepreneur network Tech Nation, and Russ Shaw CBE, founder, Tech London Advocates and Global Tech Advocates, are positive, with cautious optimism that Sunak’s tech and investment background will bring stability and prosperity to the UK tech market. Sifted also reported this week on the positive reaction to his appointment among the tech community. Sunak already has a lot to contend with, such as a UK semiconductor strategy, crypto regulation and the Online Safety Bill. He may also want to commit to the goal he set out as Chancellor to make the UK a “global cryptoasset hub.” However, these pressing issues may have to remain on the back burner in the short term, as regaining market stability will be a top priority for everyone.

Elon Musk appointed Chief Twit

Elon Musk completed his $44n Twitter takeover this morning according to US media and the BBC. Musk tweeted “the bird is freed,” in what is assumed to be a reference to the deal closing. It is thought that the news of the deal completion will be greeted with mixed reviews among Twitter users and employees, as The Telegraph reports that Musk has already started restructuring the current workforce. Musk has said he bought the social media platform to help humanity and for “civilisation to have a common digital town square.” It is unclear what the future holds for Twitter as some have reported of its potential transformation into a “super app”, much like the Chinese app, WeChat, that incorporates services including messaging, social media, and mobile payments. However, what is known is that Twitter’s shares will be suspended from trading on Friday, according to the New York Stock Exchange.

Despite a stellar quarter for fundraising, is there trouble ahead for European VC?

VC fundraising has had an impressive quarter, with 47 new funds, totalling €8.7bn raised between July and September in Europe according to Sifted. However, some market watchers predict a rocky next few months for VCs, as the number of rounds and overall investment levels are down year on year and share prices of publicly listed VCs are down between 30% and 75% since the beginning of 2022. Some investors have warned that if deal activity continues to fall (as it has done for the last three quarters), the market could “run out of oxygen.” However, others believe that there is no chance of VC investment disappearing soon, as VCs possess their highest level of dry powder – uninvested capital to spare – to date. Some investors think that we may well see a slowdown compared to the 2021 VC boom, but with these dry powder conditions, VCs will continue to see success in the future.

Watchdog warns emotion-sensing tech ‘is snake oil’

An arm of biometric technology, ‘emotion-sensing tech’, has been in the spotlight this week due to the UK’s information commissioner Stephen Bonner’s blanket warning on the technology’s “ineffectiveness.” The Guardian explained that such technologies, which have received significant investment and engagement recently, attempt to infer information about mental states using data such as the shininess of someone’s skin, or fleeting “micro expressions” on their faces. There is a risk of the technologies being used to make decisions about recruitment, or to tell if someone is lying. The Information Commissioner has said that such technologies have inbuilt bias, inaccuracy, and could pose a risk to vulnerable people. He went so far as to warn that any organisations found to be using these technologies will face consequences. According to The Times, using biotechnology to make decisions regarding someone’s personality will remain a hot topic on the UK regulatory agenda. The watchdog is currently developing guidelines on the wider use of biometrics to be published next Spring, and will include facial, fingerprint and voice recognition technology which are already in operation.

Spotify wants to get into audiobooks but says Apple is in the way

Spotify has hit some serious roadblocks in the development of its audiobooks venture. According to the New York Times, Apple has rejected Spotify’s audiobook app from its app store three times in the past month. It points to a wider issue that Apple holds an incredibly powerful role as a gatekeeper to any app’s success, which has long frustrated app developers. Companies such as Spotify have urged regulators and lawmakers to acknowledge Apple’s actions that may be impeding competition. Some have acted, with European regulators more than three years into an antitrust investigation, and US Congress is still considering laws that could ban Apple from requiring apps to use its payment system. However, UK antitrust authorities decided not to investigate competition issues in the music streaming business earlier this year.

Top Tweets of the Week

• Bloomberg Technology tweets that 5G wireless services are ‘overhyped’ with many users seeing no gain in speeds, a new survey finds
• Elon Musk tweets as he enters Twitter’s HQ with a sink in hand: “let that sink in!”
• George Freeman MP tweets that he has been appointed Minister for Science, Technology and Innovation in Prime Minister Rishi Sunak’s new government

Number of the Week

£413bn – The amount by which digital tech is expected to grow the UK economy by 2030, according to a recent study by Public First

Contact Us

To be added to the distribution list for FTI Consulting News Bytes, or for further information on the dedicated TMT team at FTI, please contact [email protected].