FTI Consulting News Bytes – 4 October 2024

FTI Consulting News Bytes

We begin this week’s edition of TMT News Bytes with Britain’s media regulator preparing to take “strong action” against tech companies that violate the Online Safety Act. Then turning to concerns around what tax changes in the Budget later this month might mean for the Aim market. Elsewhere musicMagpie has been acquired by AO World for £10 million, sending its shares soaring. We then cover OpenAI’s latest $6.6 billion funding round, valuing the company at $157 billion, and wrap up with a warning that according to Microsoft, fully-embedded AI personal assistants are coming. 

This week’s news

UK regulator ready to take ‘strong action’ against tech giants

Ofcom, Britain’s media regulator, will take “strong action” against tech companies that break new rules on content moderation Melaine Dawes, Ofcom chief executive, told the Financial Times. Dawes said that the UK’s Online Safety Act, the first of its kind globally comes into force next year, directly addressed much of the internet activity that caused violence across Britain in August. The act will require websites to set and enforce clear content moderation policies and to act quickly to remove illegal content. Ofcom has the power to levy fines on websites that violate the Online Safety Act or shut them down in extreme cases with Dawes saying: “We will absolutely be prepared to use them”.  

Nightmare on Aim Street concerns ahead of the budget 

In the run-up to Labour’s first budget in almost 15 years, to be delivered the day before Halloween, investors have been spooked by concerns that the Treasury is considering cutting tax relief that has underpinned the London Stock Exchange’s Alternative Investment Market (AIM), according to The Times. Quest, part of Canaccord Genuity, told clients last week when screening for 40 of the most exposed stocks, that potential changes “could send investors scrambling to dump small and illiquid shares faster than you can say ‘Boo!’”, going on to state: “Picture Freddy Krueger slashing through Aim share prices, leaving a trail of financial carnage in his wake”. While The Institute of Fiscal Studies said, in its research on raising revenue by closing tax “loopholes”, that the special treatment of Aim shares “distorts investment choices towards these types of shares, particularly for older people seeking to minimise their inheritance tax liability”.

AO World buys musicMagpie for £10 million

In the wake of small and medium-sized British-listed companies attracting a record number of takeover bids, online gadget recycler, musicMagpie has been acquired for £10 million. The Times reports AO World’s acquisition marks the beginning of musicMagpie’s strategic move to become the number one digital destination for electrical recycling, which will be driven by AO’s ability to drastically enhance the platforms consumer tech offering. Shares in musicMagpie rose a whopping 50% following the announcement.

OpenAI valued at $157 billion 

The company behind ChatGPT, OpenAI, has raised $6.6 billion from investors valuing the company at $157 billion – cementing its position as one of the most valuable private companies in the world. Reuters reports that funding attracted returning venture capital investors including Thrive Capital and Khosla Ventures, as well as OpenAI’s biggest corporate backer Microsoft and new participation from Nvidia. Sarah Friar, OpenAI Chief Financial Officer, told employees on Wednesday that the company will be able to provide liquidity for them through a tender offer to buy back their shares in the company following the funding, although no details and timing have been decided, according to a source.

‘Ever present’ personal AI assistants are coming, Microsoft  

Just when you thought AI assistants couldn’t get any better, Microsoft’s Head of AI, Mustafa Suleyman announced that AI assistants with “really good long-term memory” are approximately a year away, reports BBC News. In the ever-lasting pursuit to make our lives easier, Suleyman said that tools will soon be able to recall conversations, projects and problems, encouraging users to invest more time in them to develop their ability to become the most helpful additions to our day-to-day lives.

Top Tweets of the Week 

• Bloomberg Technology: SoftBank founder Masayoshi Son sketched out one of the most aggressive timelines for the adoption of artificial intelligence yet, envisioning a near future where the technology would run entire households
• Pascal Bornet, AI Expert and Author on Google’s NotbookLM: I uploaded my entire new book “IRREPLACEABLE” and it transformed it into a podcast, study guide, FAQ, timeline, and an accurate chatbot that references specific parts of the book to support its answers.
• TechCrunch: Google Maps will show AI-powered review summaries in India   

Number of the week

£24bn -Is Rachel Reeves planning a £24bn pension tax raid? (City AM)