Several hundred young people, mostly in their 20s, were recruited by San Francisco-based outsourcing company Sama to work in its Nairobi hub moderating Facebook content. In a lawsuit against Sama and Facebook owner Meta, 184 petitioners are alleging human rights violations and wrongful termination of contracts. The case, one of the largest of its kind, has potential global implications for the conditions of tens of thousands of moderators employed to filter out the most toxic material from social media networks. The cases are the first filed outside the US that seek to change through court procedures how moderators of Facebook content are treated. In 2020, Facebook paid out $52m to settle a lawsuit and provide mental health treatment for American content moderators. Many moderators in Kenya who spoke to The Financial Times said the work left them psychologically scarred, plagued by flashbacks and unable to maintain normal social relations.
Sony says it is considering spinning off and relisting shares of its financial services arm to boost investments in its entertainment business. Shares of Sony rose 6.4% on news of the potential split, which would allow the company the ability to invest in entertainment and image sensors at a new level while retaining a 20% stake in the unit. The IPO would be in line with the company's recent expansion of acquisitions in the entertainment business. Now with growing hopes of higher governance standards in Japan and expectations for larger share buybacks, Sony may be on track to fund aggressive merger and acquisition activity without incurring significant taxes by breaking up and selling its financial unit via IPO. Sony is expected to retain a stake of about 20% in order for the deal to go through.
South Korean authorities are taking measures to stem "tech leakage" to rival China, with Seoul creating a database of chip engineers working for South Korean companies to monitor their travel in and out of the country. Seoul has set up several investigatory bodies to combat leaks spontaneously hiring foreign staff, often through patents. Illegal hiring practices, patent infringements and the theft of intellectual property is being tackled with tougher punishments and easier ways to report suspected violations. The same edition of Nikkei Asia details increased South Korean-Chinese competition for technology experts and top-level executives. According to South Korea’s National Intelligence Service, the number of confirmed National Core Technology leaks has risen steadily over the past five years. In terms of technology investment, Taiwan Semiconductor Manufacturing Company recently pledged $100bn to expand over the next three years as part of a strategy to diversify its manufacturing base away from Taiwan.
Banks should collaborate on data to improve their fight against financial crime by enabling financial institutions to share information from within and outside their networks, according to the CEO of Nasdaq, Adena Friedman. Speaking in the Financial Times, she said the increase in financial crime was partly due to regulations that limited banks’ use of data and technology. Friedman spoke of the benefits of the New York exchange's own approach to combating financial crime, in which data from over 2,400 banks was used in conjunction with advanced artificial intelligence algorithms. Regulators should also allow banks to use data sets in order to combat crime and employ cloud-based AI and machine learning to tackle the problem.
CEOs need to treat cybersecurity as a strategic issue that should be handled at the highest level rather than shifting responsibility to their chief information security officer, according to an FT report. As hacking is an asymmetric menace, it is important for senior leaders to take a strategic standpoint that covers the entire supply network, assess reputational risk and identify the “crown jewels” of their businesses that require the highest level of protection, the report said. While CEOs need to maintain a strategic view of risks and opportunities that covers the entire supply network, they are better placed than CISOs to identify crow jewels, which could be guests passport details in a hotel, customer health data in a spa or intellectual property in a manufacturer. Companies that collaborate during crises fare better than those that suffer in silence, according to Pascal Steichen, who runs Luxembourg’s cybersecurity simulator.
Alibaba has recorded a 2% rise in revenue to RMB208bn ($30bn) in the first quarter of 2021, and has announced it intends to complete the initial public offering for its Freshippo grocery business in the next year and to list its Cainiao Smart Logistics in the next 12 to 18 months. It will also spin off the cloud computing arm as the struggling business moves to become an independently listed company. The six new chief executives and board members for the companies created through the split have been revealed.
Developed nations are struggling with a shortage of workers which is hitting every sector of the economy. The UK, the US and EU are all grappling with the challenge, which has hit skilled jobs in the technology sector particularly hard. The skills gap has been caused by a lack of interest in maths and science by students at all levels, a problem that has led to too few people having the technical skills required by employers. An in-depth report in Raconteur explores the issue, which government policies have failed to tackle, and suggests that initiatives aimed at upskilling the workforce have been viewed as ineffective by business leaders.
While artificial intelligence (AI) raises some concerns over its impact on society, economists writing in the Financial Times argue that policymakers should be focusing on the distribution of the productivity gains AI could potentially bring. This issue concerns intellectual property rights, an issue which is predicated on who controls access to the technology. At one end of the spectrum there is a completely proprietary world, in which the most useful AI is the intellectual property of a monopolistic or oligopolistic company. At the other extreme, there is an open-source world where productivity gains would be earned by those who deploy the technology. Governments could legislate to increase transparency and access to such technologies.
OpenAI has launched an app to allow wider access to its sophisticated ChatGPT chatbot, which handles inquiries and responds with an artificial intelligence-generated answer. Available from the Apple App Store, the mobile product mirrors the website, but also incorporates voice recognition tool Whisper. The groundbreaking chatbot was used by more than 100 million people in January this year and has grown in popularity since it was first launched in November, leading to concerns from AI ethicists over the technology's potential for misuse. The app is now set for release on Android devices in the coming weeks, OpenAI said.
The US Supreme Court has decided not to overhaul internet publisher legal protections in two cases that could have seen significant changes to laws governing online platforms like Google and Twitter. The cases were centred around Section 230 of the Communications Decency Act, which protects online platforms from legal liability regarding content posted by users. The cases were brought following accusations by families of people who died in ISIS attacks that the companies had aided the terrorist group by allowing it to disseminate content through their channels. Judges ruled that the companies were not at fault.
Germany is lacking appropriate funding for start-ups, leading to a lack of German tech unicorns. In terms of Gross Domestic Product (GDP), venture capital investment accounted for only 0.25% of total GDP in Germany last year, while VC funds throughout Europe invested €77bn in 2019. Meanwhile, the UK invested 0.4% of GDP in growth capital last year, and the US spent the most, at 0.78%. Proposals for change include learning from US financial virtues without copying its perceived vices.
The UK government will provide up to £1bn over the next decade to chip companies to increase Britain's resilience in the sector, which has faced severe supply chain disruptions during the pandemic and is threatened by worsening geopolitical tensions. The government's National Semiconductor Strategy will give UK chip companies £200mn between 2023 and 2025 with the rest to be distributed by the end of 2033. The strategy is aimed at boosting areas where the UK has a strategic advantage, rather than building specialised fabs, which can cost up to $10bn.
Policy-makers are facing a dilemma in regulating artificial intelligence (AI) systems, according to an op-ed in the Financial Times. Generative AI, which autonomously produces text or images, is difficult to regulate because it is uncontrollable. Regulators have previously focused on controlling the high-risk applications of the technology, such as in healthcare. But, with all-purpose AI chatbots such as OpenAI’s GPT-3 looming, the consensus is shifting to regulate AI models themselves. Experts are debating how to separate benign from harmful uses without hobbling innovation. Possibilities range from limiting the most powerful versions of the technology for restricted uses to subjecting large language models (LLMs) to direct regulatory oversight.
The leaders of G7 countries have called for “guardrails” to be established for the growth of AI, particularly around the risks of its large language models. European Commission President Ursula von der Leyen and UK Prime Minister Rishi Sunak were among those to raise concerns at the summit in Japan, citing the “potential benefits” of AI to citizens and the economy. The state leaders call for development of AI that is “accurate, reliable, safe and non-discriminatory” reflects the wider worries of governments worldwide. Earlier this month, the competition watchdogs in the UK and the US began indicating plans to regulate the sector. The European Union also recently agreed tighter rules on using AI, including restrictions on chatbots, while the ministers for digital and technology of the G7 nations agreed to base AI policy on democratic values, protective of human rights and personal privacy, and risk-based to maximise benefits whilst mitigating risks.
Japanese electronics group Panasonic risks ramping up investment too quickly as it seeks to double capital spending to a record ¥700bn ($5.1bn) for the fiscal year to March. Over half the sum will fund expansion of electric vehicle (EV) battery production. Panasonic was once best known for its LCD televisions, leading to large investments in plasma and LCD technology that ended in failure when cheaper Chinese competitors entered the market, causing the company to withdraw from LCD panel and solar cell production. Panasonic has invested heavily in EV batteries and is the world’s fourth-largest producer and one of Tesla’s leading suppliers. However, US tax credits have accounted for much of the company's net profit increase. Shares currently trade at a discount, with a forward earnings ratio of 12 compared to local competitors. Its heavy investment in production capacity ending in failure after competition entered the market caused the company to withdraw from all LCD panels production in 2012 and also withdraw from solar cells and sell its semiconductor business.
LinkedIn is tackling its growing disinformation problem, according to its most recent transparency report. The business-focused social media network blocked more than 58 million accounts between July and December 2021, up from 22 million in the first six months of 2021. AI algorithms have made spotting fake profiles increasingly difficult, with a Stanford Internet Observatory study identifying over 1,000 active profiles using what seemed to be pictures generated by AI. Shalinda Adikari and Kaushik Dutta at Cornell University have proposed that the network target newly created profiles with no avatar or biographical info limited engagement; LinkedIn currently doesn’t use this strategy. Many businesses also report having been targeted by scammers on the site, and users have expressed concern about low-quality content. LinkedIn said last year it was taking steps to block “inauthentic profiles and activity”.
CEO of OpenAI, Sam Altman, faced US lawmakers recently. With AI predicted to have potentially dangerous consequences for humanity, Altman has warned of the need for AI regulation. He co-founded OpenAI to ensure that technology advances were used safely and has admitted that if this technology goes wrong, it can go very wrong. His belief in long-term investment has made him a great investor. Altman’s company, OpenAI, is a not-for-profit organization that is dedicated to making sure AI benefits humanity at large, but it also has the huge moneymaking potential of AI to grow.
UK chief executive of the Competition and Markets Authority (CMA), Sarah Cardell, is proving an irritant to Bobby Kotick, CEO of Activision Blizzard. The CMA has been trying to block the video gaming company's acquisition by Microsoft in a similar fashion to US Federal Trade Commission chair Lina Khan. Both the UK and US are taking an approach to antitrust enforcement that is less willing to accept the traditional behavioural recoveries and more interested in preventing companies from extending their existing monopolies. Regulators are believed to be worried that large pharma and tech firms are locking out smaller competitors.
Revolut is locked in a board clash with largest shareholder SoftBank who have demanded compensation for giving up its priority class of shares, which the Bank of England has made a condition for granting the crucial licence, according to people with knowledge of the situation. If Revolut does not simplify its ownership structure to win a long-delayed banking licence, the payments group cannot lend or benefit from the UK’s deposit insurance scheme, which impact the fintech’s expansion into the US, Australia, and Singapore. Regulators also request Revolut expand their group level board and add more technology expertise. SoftBank had demanded double the amount of common stock Revolut is offering in exchange for giving up the preferential rights linked to its current shareholding class.
The London-based fintech is now rushing to release its 2022 accounts, and hopes to release them next month, which it hopes will be approved by its auditors after it built new systems to better document exchanges and flows of money around the app. Despite a two-and-a-half year wait for the banking license, founder, Nik Storonsky, has criticized the “extremely bureaucratic regulator,” voicing his frustration of the delays. With its 30 million existing clients, Revolut needs the license to help it expand and continue competing against other digital banks and payment services.
Revolut’s locked discord tells a wider story about London and Europe’s continued dominance in fintech, with the fintech being a potential example of London losing its status, since Brexit, as Europe’s primary financial services hub, while the UK business secretary is seeking to prevent the company moving its headquarters. Regulatory concerns have spotlighted potential conflicts of interests with banks investing in fintech and purchasing fintechs outright, and Europe’s banking industry experiencing low profitability and increasing competition from global fintechs.
Entegris, a top supplier of chip-making materials, has invested in a $500m manufacturing centre in Taiwan. The facility in Kaohsiung will house the company's most advanced manufacturing operations and produce the latest chip-making materials including filters and containers. President and CEO of Entegris Bertrand Loy stated that the investment was a "sign of the conviction we have in the future of the semiconductor industry in Taiwan." The chip manufacturing industry has been highly competitive, with leading chipmakers TSMC, Samsung Electronics and Intel racing to produce cutting-edge chips of 3nm and below.
