Five Top Tech Takeaways: Netflix's Sea of Cash, Superconductivity breakthrough, Farmers Gets Emojied, and Tech Bets Big on AI

Netflix's Sea of Cash

Superconductor Claims Ignite Market Buzz Despite Scientific Skepticism

Claims about a breakthrough in superconductor technology that could revolutionize the power, transportation, and chip industries have sparked surges in some Korean and Chinese stocks, despite skepticism from scientists. The excitement began after a report from South Korean researchers stated they had synthesized the world's first superconductor able to conduct electricity at room temperature and ambient pressure. The superconductor, named LK-99, could be disruptive for a wide range of industries if it can be mass-produced. However, commercialization seems difficult as LK-99 appears to have insufficient ductility to be made into wires. (Source: BNN Bloomberg)

Tech Giants Google and Microsoft Bet Big on AI

Artificial intelligence (AI) is one of the most important and competitive fields in the tech industry, and two of the biggest players are Microsoft and Google. According to a recent report by CSET, a research center at Georgetown University, Microsoft and Google spent an estimated $19.6 billion and $27.6 billion on AI research and development in 2020, respectively. These figures are based on analyzing the companies' financial statements, patents, publications, and other indicators of AI activity. The report also compares the AI spending of Microsoft and Google with other tech giants, such as Amazon, Facebook, Apple, and IBM, as well as the US government. The report reveals that Microsoft and Google are leading the pack in terms of AI investment, innovation, and talent acquisition and that they are likely to maintain their dominance in the near future. You can read the full report here. (Source: The Wall Street Journal)

Canadian Farmer Ordered to Pay for Contract Confirmed by Emoji

A Canadian judge has ruled that a "thumbs-up" emoji can be as valid as a signature in a contract, ordering a farmer to pay CAD 82,000 ($61,442) for an unfulfilled contract. The case revolved around a grain buyer who sent a contract to the farmer via text message, asking for confirmation. The farmer responded with a thumbs-up emoji but did not deliver the agreed-upon flax. The judge argued that courts need to adapt to the "new reality" of how people communicate, dismissing concerns that this ruling could lead to new interpretations of other emojis. (Source: The Guardian)

Hollywood Writer's Strike Helps Netflix Pool $5 Billion in Cash

In the midst of Hollywood writers and actors' strikes, Netflix has experienced an unexpected financial windfall. The streaming giant anticipates a free cash flow of at least $5 billion for 2023, a significant leap from the previously estimated $3.5 billion, due to reduced operational costs from delayed production schedules. The company plans to send the cash to shareholders through stock-buybacks.  CFO Adam Neumann attributes this financial boost to the strikes and the company's successful crackdown on password sharing, which has led to an addition of over 6 million new paid subscribers in Q2, including 1.2 million in the U.S. and Canada. The company reported a profit of $1.8 billion on $8.2 billion in revenue for Q2. This situation presents a unique opportunity for Netflix to capitalize on the current labor disputes, demonstrating resilience and adaptability in a challenging market environment. (Source: CBS)

Free Generative AI Coursework for Professionals

Microsoft and LinkedIn have launched the AI Skills Initiative certificate program, a free coursework library for professionals seeking to learn and apply generative AI skills. The initiative, which leans towards Microsoft's Bing Chat built on OpenAI's GPT-4, consists of five modules, each with a video and some including quizzes or workbooks. Completion of all modules earns the learner a Professional Certificate on Generative AI, which can be displayed on LinkedIn Learning. The certificate program will be available in seven languages and free through 2025. Microsoft is also offering a grant for exceptional proposals on training employees of nonprofit, social enterprise, and research or academic institutions to use generative AI, with proposals due by August 15. Generative AI skills are among the top three training priorities for companies, with over 75% planning to adopt AI in the next five years.  (Source: TechRepublic)

Author: Malik Datardina, CPA, CA, CISA. Malik works at Auvenir as a GRC Strategist that is working to transform the engagement experience for accounting firms and their clients. The opinions expressed here do not necessarily represent UWCISA, UW, Auvenir (or its affiliates), CPA Canada or anyone else. This post was written with the assistance of an AI language model. The model provided suggestions and completions to help me write, but the final content and opinions are my own

The Furious Five (June 27):Adobe/Meta AI Moves, Netflix's Anti-Sharing Economy, and the Titan Tragedy

Adobe Dominates (link)

Adobe's Financial Triumph Fueled by AI Innovation

Adobe's focus on AI has been credited for the company's recent financial successes. For example, the company is leveraging AI innovations across its product suite, notably Firefly, an AI tool for generating images. This focus on AI has contributed to Adobe's robust financial performance, with the company surpassing Wall Street expectations for the quarter ended June 2, posting revenues of $4.82 billion and adjusted profits of $3.91 per share. Adobe's shares rose over 5% in aftermarket trading following the announcement. This bullish outlook extends to future performance, with Adobe forecasting its current-quarter revenue to be in the range of $4.83 to $4.87 billion, and raising its FY 2023 revenue forecast to between $19.25 billion and $19.35 billion. The company's stock has seen a significant 40% increase since May, driven in part by investor optimism around Adobe's AI strategy. However, some analysts warn of potential overvaluation due to the hype around AI. Despite this, Adobe's management remains optimistic about the future of AI in enhancing their product accessibility and customer productivity. (Source: Reuters, Seeking Alpha)

Outmaneuvering the Competition: Meta’s Open-Source AI Gambit

Tech giant Meta is reportedly planning to offer a commercial license for its forthcoming open-source large language model (LLM), according to an exclusive from The Information. If true, this marks a major shift in approach, as most currently commercially used language models, such as Google's Bard and OpenAI's ChatGPT, are closed-source. This innovative move could potentially lead to broader adoption by companies seeking a more flexible and cost-effective AI solution. However, it's worth noting that this development hasn't been widely reported or confirmed by Meta, so caution is advised until further information is available. (Source: Artisana)

Trustworthy AI: NAIAC's Strategy for Harnessing AI Benefits and Mitigating Risks + NIST AI Risk Framework

The National Artificial Intelligence Advisory Committee (NAIAC) has submitted its inaugural report to the President, outlining strategies for the U.S. government to harness the benefits of AI technology while mitigating its potential risks. The report emphasizes the need for trustworthy AI, new R&D initiatives, international collaboration, and workforce support. Future focus areas for NAIAC include rapidly evolving AI sectors like generative AI. The committee is also set to reassess its working groups to more effectively study the influence of AI on various societal facets such as workforce, equity, and societal norms. Deputy Secretary of Commerce Don Graves highlighted the critical juncture the country is at regarding AI development and the necessity of balancing innovation with risk management. The Biden-Harris administration has emphasized responsible American innovation in AI to safeguard people's rights and safety. The committee's future endeavors will consider mechanisms to keep pace with the swift development and deployment of AI technology. The report also references this AI-Risk framework published by NIST. (Source: NIST)

Netflix Gains On its Anti-Sharing Strategy

Netflix's is benefitting remarkably from the shift towards an 'anti-sharing' economy. During a recent period, the streaming giant experienced a significant surge in new sign-ups, averaging 73,000 daily—a 102 percent increase compared to their previous 60-day average. Remarkably, Netflix added 100,000 subscribers each on May 26th and May 27th. At the same time, Netflix's recent policy change limiting password sharing outside individual households is significantly altering dynamics among families and friends who previously relied on shared subscriptions. While this strategy has boosted the company's sign-ups and revenues, it raises questions about the social and relationship impacts of such business decisions. This shift towards an 'anti-sharing' economy is causing what some users describe as 'breakup talks', disrupting established patterns of digital sharing and challenging relational norms. Although this move is aligned with Netflix's commercial goals, it sparks a discussion about the role companies should play in shaping societal behaviors and norms, highlighting the need for an ESG (Environmental, Social, and Governance) perspective in policy decisions. As we see companies making choices that prioritize economic gain over social dynamics, it's essential to consider the broader implications and the role business should play in fostering or disrupting social connections. (Source: TheVerge, WSJ)

Titan Disaster: A Governance, Risk, Compliance Tragedy

OceanGate's Titan submersible incident has starkly underscored the importance of rigorous internal controls, adherence to governance risk, and compliance for businesses. Despite the repeated warnings about Titan's safety by a prominent deep sea exploration expert, the company's CEO, Stockton Rush, overlooked these critical insights in his pursuit of innovation and market dominance. The tragic consequences were not only fatal to him and four other passengers but also posed severe risks to the broader industry. Critics argue that these calamities were preventable had OceanGate prioritized safety certification and independent validation before operating commercially. Rush's dismissal of such safety precautions—viewing them as barriers to innovation—reflects a dangerous misapprehension that can jeopardize both human life and the reputation of an industry. In the wake of this tragedy, the importance of sound internal controls, risk management, and compliance with accepted standards is clearer than ever. (source: BBC)

Author: Malik Datardina, CPA, CA, CISA. Malik works at Auvenir as a GRC Strategist that is working to transform the engagement experience for accounting firms and their clients. The opinions expressed here do not necessarily represent UWCISA, UW, Auvenir (or its affiliates), CPA Canada or anyone else. This post was written with the assistance of an AI language model. The model provided suggestions and completions to help me write, but the final content and opinions are my own.