FTI Consulting News Bytes – 29 September 2023

FTI Consulting News Bytes

This week saw several dramatic developments in the ongoing Big Tech AI arms race. Amazon kicked off proceedings with the announcement of a $4 billion investment in Anthropic, which will see the AI start-up use AWS as a primary cloud provider for future foundation model development. Meta then stole the headlines with the launch of its own chatbot voice assistant among a swathe of new consumer-facing AI products. Elsewhere, there are encouraging signs for European tech start-up funding as Dawn Capital raised $700 million for early-stage business-to-business software firms. In social media news, Reddit unveiled plans to pay top contributors in the US for content. Finally, an exclusive poll from The National found that British adults backed Keir Starmer to do a better job on the world stage than British Prime Minister, Rishi Sunak.

This week’s news

Amazon invests $4bn in Anthropic to accelerate GenAI capabilities 

On Monday Amazon announced it had reached a strategic agreement with San Francisco-based start-up Anthropic, creators of ChatGPT rival Claude, bringing together respective industry-leading technology and expertise in GenAI. Amazon has earmarked an investment of up to $4 billion designed to accelerate the development of Anthropic’s future foundation models, enabling Amazon developers and engineers to build with Anthropic models via Amazon Bedrock. The agreement will see AWS become Anthropic’s primary cloud provider. As per the Financial Times, the deal aligns with Amazon’s chipmaking ambitions as it seeks to position its “Trainium and Inferentia chips as credible alternatives to Nvidia’s processors for the training and running of generative AI models.” Market reaction to the announcement was positive with Amazon’s stock valuation climbing around $21 billion on Monday. 

Meta enters AI chatbot market 

Meta generated a global media news cycle towards the latter part of the week following the announcement of an array of new consumer AI products at its annual Meta Connect conference in Silicon Valley. Chief among them was a new voice assistant, ‘Meta AI’, designed to answer queries and craft responses in a fashion similar to ChatGPT and other programmes. Meta users will be able to access the voice assistant from within any of the company’s messaging platforms, a key point of differentiation from its Big Tech rivals. As reported by Reuters, the new announcements “reflect how Zuckerberg plans to navigate the shift this year of investor fervour to artificial intelligence from augmented and virtual reality technologies.” Encapsulating the speed and competitiveness of the AI chatbot race between the tech giants, on the same day Meta unveiled its new toy to the world, OpenAI, the Microsoft-backed creator of ChatGPT, revealed that its chatbot is now able to browse the internet to provide users with current information.

Green shoots of recovery for European VC tech start-up funding?

London-based venture capital firm Dawn Capital has raised $700 million for business-to-business software start-ups in what is thought to be the largest early-stage fund of its kind in Europe, as reported by The Times on Monday. The capital is to be invested from two funds: a $620 million early-stage fund and an $80 million “opportunities” fund for growth-stage firms in Dawn Capital’s existing portfolio. One of the most prominent tech investors in Europe, Dawn Capital boasts a portfolio that includes PayPal-owned payment firm iZettle, Visa-owned open banking start-up Tink and Quantexa, the software company that helped the UK Government investigate fraud on the pandemic bounce-back scheme. Marking positive news for venture capital tech start-up funding following a global slump in the first half of 2023, Evgenia Plotnikova, a general partner at Dawn, said venture capital could be in a “golden age” despite the difficult economic climate in Europe. One area defying the decline however is artificial intelligence, where investment is booming, forecasted to reach the $158.4 billion mark in 2025, according to Goldman Sachs. When asked whether artificial intelligence will be a focus area for Dawn Capital’s new funding, Plotnikova commented: “We’re not hype investors, so we wouldn’t be backing anything that is AI for the sake of AI. That’s a big waste of money for investors.”

Reddit to offer cash for content 

Social media platform Reddit unveiled plans this week to begin paying its top contributors in the US cash for popular posts in an effort to incentivise its most valuable creators, reports the BBC. Additionally, in a revamp of its gold awards system, Redditors can now purchase and award users with ‘gold’ credits of varying cash value. Under the previous system, users could purchase coins without any real-world monetary value to award others in exchange for ad-free viewing. The move follows recent changes at X that saw users who pay the site’s monthly membership fee receive a share of the ad revenue from their tweets. As seen with X, the response to Reddit’s decision has been mixed with social media expert, Matt Novara, voicing concerns that incentivising creators to make content doesn’t necessary lead to better output. Reddit’s announcement also follows a controversial decision by management in June to charge developers of third-party apps used to browse the platform, resulting in a temporary user-driven blackout of the site.

Starmer outperforms Sunak on global stage 

On Thursday, an exclusive poll by The National found that Labour leader, Keir Starmer, would do a “better job of representing the United Kingdom on the world stage” than current Prime Minister, Rishi Sunak. A Deltapoll survey of 2,039 British adults found that 40% of respondents favoured Mr Starmer with 31% choosing to support Mr Sunak. More broadly, the current Prime Minister’s net poll ratings were “largely in negative territory” across a range of issues, according to The National. A majority of respondents claimed that Mr Sunak was going wrong in areas including the economy, the cost-of-living crisis, benefitting from Brexit, immigration and crime. The government’s handling of the war in Ukraine was a positive, with net support of 64% backing Russian sanctions and 46% net endorsing support for Ukraine. Mr Starmer has recently had successful visits to France and Canada, helping to present him as a “credible foreign policy actor”, according to Olivia O’Sullivan at the Chatham House think tank. Foreign policy commentator, Jeremy Black, claimed the ratings came down to people criticising incumbent governments, however, with Mr Starmer’s international standing largely untested. 

Top Tweets of the Week

• Bloomberg UK: NEW: Billionaire Jim Ratcliffe is restructuring his offer to buy Manchester United, sources say, in an attempt to break the deadlock in the long-running takeover saga.
• Mark Sweney, Media Business Correspondent at The Guardian: US billionaire in talks with GB News co-owner over Telegraph bid.
• Lionel Barber, Former Editor of the Financial Times: “Delighted to debut new media podcast with @arusbridger. Top slot is Murdoch and @MichaelWolffNYC new book on The Succession. Tune into Media Confidential @prospect_uk’s new podcast!”

Number of the Week

$996.8 billion – The combined value of UK start-ups according to HSBC Innovation Banking and Dealroom