AI’s deflationary winds will blow away profits 27 Jun 2023 Artificial intelligence could add $8 trln a year to world GDP, McKinsey estimates, defying the gloom about robots replacing humans. Though companies should benefit from lower costs, consumers could use the technology to find better deals. It all adds up to lower prices.
Prosus’ juggle leaves bigger worries up in the air 27 Jun 2023 The $147 bln Dutch investor is ending its complex shareholder structure with South African parent Naspers. It’s simpler for investors, and enables more buybacks. But the group will still have a stake in Tencent it can’t easily sell and lopsided governance, meriting a discount.
Big Tech backlash swells the AI gold rush 26 Jun 2023 Cloud provider Databricks is buying a machine learning startup for $1.3 bln, almost six times its valuation earlier this year. Models backed by Microsoft and Google dominate artificial intelligence. But a bet that companies want to control their data is pumping up smaller rivals.
AI’s regulation naysayers protest too much 21 Jun 2023 Lawmakers in the European Union and elsewhere are scrambling to draft artificial intelligence rules. Industry leaders like OpenAI boss Sam Altman warn the approach is too onerous. Yet the risks of pandering to special pleading exceed the dangers of stifling a nascent industry.
Crypto is dead: long live crypto! 16 Jun 2023 Already reeling from fraud and falling prices, cryptocurrencies suffered a fatal blow with US charges against two leading exchanges. Yet Felix Martin argues that the demise of speculative digital tokens may help revive their original purpose as private global currencies.
AI speed benefits now apply to EU boycott U-turns 26 May 2023 On Wednesday Sam Altman threatened to quit Europe if it “over-regulates” his booming startup OpenAI. He’s now rapidly rowed back. As with their disruptive new technology, AI mavens may have a shrewder sense than older US peers of when to stop poking the Brussels bear.
AI boom could expose investors’ natural stupidity 19 May 2023 Corporate leaders and money managers are jumping on the artificial intelligence bandwagon. The study of behavioural economics suggests people are easily carried away by hype. Some of the limits of human reason may also apply to supposedly smart machines, writes Felix Martin.
How do you solve a problem like AI? Tax it 18 May 2023 Generative artificial intelligence could put a rocket up company profits, and potentially leave millions jobless. The economic and social disruptions could be profound. But fiscal distortions make it hard to tide over the losers. Closing obvious loopholes is growing more urgent.
Why the jobs market could brush off AI threat 16 May 2023 Hiring seems to be waning in the US and Europe. Yet in this Exchange podcast, recruitment boss Sander van ’t Noordende strikes a hopeful note. The Randstad CEO explains why artificial intelligence and a possible economic slump are doing nothing to dampen demand for talent.
Big Tech’s AI victims will fall fast 12 May 2023 Online education company Chegg is suffering as students lean on artificial intelligence to help with homework. Hollywood writers are paranoid. While AI is accruing value to Big Tech, smaller companies will quickly – and once again – be annihilated by well-capitalized tech firms.
AI offers leisure, if not happiness 12 May 2023 Technology has outpaced economic growth for 50 years, while workers have long traded higher productivity for more leisure. These trends will continue as artificial intelligence automates more jobs. The salient question is how to distribute the gains – and the free time.
German software buyout battle hits investor glitch 10 May 2023 Bain Capital has launched a 2.5 bln euro knockout offer for IT group Software AG. But the target seems oddly happy to stick with a lower bid from existing backer Silver Lake. Shareholders can either take an inferior price or risk a messy stalemate.
Deutsche Boerse data pivot comes at a price 27 Apr 2023 Boss Theodor Weimer is buying fund software firm SimCorp for 4 bln euros. Like peer LSEG, the German exchange is hoping a shift into the faster-growing data business will mean richer valuations. It’s a logical gamble, but such deals are expensive, and take time to pay off.
Capital Calls: Allianz’s fintech sale 19 Apr 2023 Concise views on global finance: The $100 bln insurer may offload its 5% stake in German digital banking startup N26, a decision that would make all kinds of sense.
Cyberattack risks rise up company agendas 18 Apr 2023 Digital breaches and data theft were up 40% in 2022. As firms expand their digital network, the weaknesses criminals exploit will also grow, DXC Technology’s security expert Mark Hughes told The Exchange podcast. Defending against attacks will inevitably cost more.
Capital Calls: Bridal bankruptcy 18 Apr 2023 Concise views on global finance: David’s Bridal, which dresses one in four American brides, has filed for Chapter 11 bankruptcy for the second time in five years. Trends that push women to spend more on themselves suggest the chain would have better luck with bachelorettes.
Bank mess hands tricky start to top Indian IT boss 13 Apr 2023 There’s no honeymoon for K Krithivasan, the incoming CEO at $145 bln Tata Consultancy. Like other outsourcers, it has struggled to retain workers. Now staff are squeezed by soaring rents in the country’s Silicon Valley. Cost pressures are rising just as US clients hit the brakes.
Capital Calls: Disney, Jobs, Aesop 4 Apr 2023 Concise views on global finance: Boss Bob Iger accused Florida Governor Ron DeSantis of ill will, but plans to spend plenty in the Sunshine State; US job openings data might be skewed by fake postings; Natura’s $2.5 bln Aesop sale is a blueprint for stressed M&A.
Israel hits tech sector cash cow while it’s down 3 Apr 2023 Prime Minister Benjamin Netanyahu has delayed a controversial plan giving the state power to override court decisions. Foreign investors in Israel’s key tech sector, which accounts for half its exports, were already getting stingier. They’ll get even more so if the idea returns.
Fiddly call-centre deal shows why M&A is so quiet 30 Mar 2023 Dealmakers have had a quiet start to 2023, given economic uncertainty and shaky debt markets. Concentrix’s $4.8 bln swoop on Webhelp solves many of those problems with a clever structure, including a convertible note. But it’s not a formula that would work in many other cases.