Weekend Box: AI Safety Sum-Up, Taylor-Nomics & more
Welcome to The Weekend Box, Audley’s weekly round-up of interesting or obscure political, business and cultural news from around the world.
Image credit/Number 10 on Flickr/License
AI SAFETY SUM-UP
This week delegates from 27 governments around the world, as well as the heads of top artificial intelligence companies, gathered for the world’s first AI Safety Summit at Bletchley Park. For the Prime Minister, this high-profile event is one of his legacy pieces to position the UK as the leading authority on the global governance of AI.
Unsurprisingly it was his interview with tech billionaire Elon Musk that captured the most attention, where for 40 minutes Sunak played the role of an enamoured podcast host to one of the most consequential tech leaders in the world. Based on a cartoon he posted on X, which mocked the politicians at the Summit, Musk was seemingly less eager to impress.
Many people see this as Sunak’s audition for a future Silicon Valley role. However, personal ambitions aside, the Summit did demonstrate the government’s ability to mobilise at pace and gather an audience with political and commercial heft.
All participating nations agreed on a framework around the risks of AI, which brought the US and China together for the first time to discuss the technology. There was also a commitment by tech companies to collaborate with governments in testing their advanced AI models before they are released for national security and other risks.
However, in their current form, these agreements and proclamations focus on existential threats and are light in detail. At the Summit, the US made its presence known with a new executive order that set out concrete, actionable plans it would be taking. The UK’s plans pale in comparison when it comes to detail. If the UK is to lead the pack, it needs to be at the forefront of proportionate and effective policymaking to mitigate against AI’s current and future threats. The real work to make the UK a hard power in AI starts now.
Image credit/kremlin.ru/License
BETWEEN MACRON & A HARD PLACE
When you have few friends left, it’s tough to see them being chummy with your enemies. The Kremlin certainly don’t take it well, making this week’s meeting between Presidents Macron and Tokayev in Kazakhstan all the more momentous.
Emmanuel Macron arrived in Kazakhstan on Wednesday to meet his counterpart Kassym-Jomart Tokayev as part of a tour across Central Asia, which will also take in Uzbekistan. The visits will give the French president an opportunity to strengthen ties, partly on the business front, but also to ensure France’s diplomatic relations with two key producers of the uranium it needs to generate 60% of its electricity are strong. The BBC notes that Kazakhstan, in turn, is seeking France’s guidance on its efforts to foster a domestic nuclear power industry.
The meeting has gone well, to judge by the praise the presidents have given each other and their home nations. While President Tokayev described France as a "key and reliable partner,” President Macron has thanked his Kazakh counterpart for abiding by the West’s sanctions on Russia and lavished words upon Kazakhstan for its ‘independence’ and effective negotiation of “geopolitical difficulties... that some may be putting” on the country.
If the wording seems pointed, Russia has not let on if it’s noticed. Kremlin spokesman Dmitry Peskov has commented on the meeting saying that Russia values its relations with Kazakhstan “very highly,” describing the nations as “allies” with “historical ties” and “ties of strategic partnership.” However, Foreign Minister Sergei Lavrov only last week decried the West for trying to pull Russia’s allies away.
Regardless of whether the Kremlin has strong words about this presidential meeting, it is difficult to read reports of it and not think of President Putin watching from a distance; nor to be reminded of how much he has isolated Russia from the world with his invasion of Ukraine.
SMILES ACROSS THE BOARD
George Bernard Shaw once said: “If you’re going to tell people the truth, you had better make them laugh.” When it comes to breaking bad news on earnings calls, the best medicine certainly seems to be laughter.
According to a study published in the Review of Accounting Studies, data demonstrates that if CEOs or managers delivered bad news with an element of humour on earnings calls, stock market returns and analyst forecast revisions were on the whole more positive. After using machine learning to analyse some 12,000 earnings calls, evidence showed that the two-day market reaction was more positive when humour had been utilised and in addition, at the 30- and 60-day mark post-call, there was no reversal to this effect.
Whilst there is no definitive explanation for why this might be, it is thought that by peppering the call with humour and lightening the mood with a joke or two, confidence is instilled in future performance and optimism is seen across the board.
Unsurprisingly, only ~12% of calls analysed featured an element of levity from managers (identified as anything that triggered laughter on the call), and typically the humour was mild. However, even these small nuggets of laughter were enough to have an impact.
The authors summarise their findings saying, “humour has a significant association with immediate stock market reaction, subsequent analyst behaviour, and future firm performance. Taken together, our evidence suggests that humour can soften the disclosure of negative news and signal relatively stronger future firm performance.”
A joke here or there clearly has its place, even in the boardroom. That being said, it is perhaps better to exercise caution and some good old-fashioned common sense about what sort of language you use in your workplace. Some scenarios will never require anything other than appropriate seriousness, as the damning evidence coming out of the ongoing Covid inquiry shows…
UNILEVER CEO: ‘STAY ON BRAND!’
Unilever’s new CEO Hein Schumacher has revised the firm’s approach to social purpose. He did so as part of a brand marketing review of the FMCG giant’s stable of 30 ‘Power brands’ like Dove, Lynx, and Ben & Jerry’s, in a bid to refocus and deliver ‘faster growth.’
Predecessors Alan Jope and Paul Polman pioneered a ‘brand purpose marketing’ approach that ran through all the group’s brand communications. Polman introduced it in 2013 with ‘Project Sunlight’, a global sustainability campaign, while Jope threatened to sell off brands that were unable “to stand for something more important” than shiny hair, soft skin, whiter clothes, or tastier food, clashing with leading shareholders in the process.
Schumacher has been more brand-specific, warning against “force-fitting purpose in every brand” but allowing brand leaders to include an overt social purpose if it drives sales. Dove soap has, for example, consistently explored social attitudes around beauty and health to maintain its market lead.
Schumacher confirmed that Ben & Jerry’s is another such brand, based on its long history of championing causes such as LGTBQ+ and refugee rights. He has trodden carefully, however. Last year Alan Jope overruled the brand’s boycott of the Palestinian occupied territories, prompting a legal fight and public spat with the company. The brand has not commented on the Gaza conflict to date, and while acknowledging its enduring “social mission,” Schumacher declined to comment, saying “it’s not a topic of discussion.”
Meanwhile another leading brand, Dyson, has clashed with the government over a more direct social intervention after Sir James Dyson’s frustrated attempts to donate £6m to a state primary school in Wiltshire, to help it expand and build a new science and technology centre. Dyson claims the Department of Education has blocked it, while the government says due process must run its course.
TAYLOR-NOMICS
Moving on, let’s ‘Speak Now’ about Taylor Swift.
Even if you're not a so-called ‘Swiftie’, Taylor Swift’s latest tour has earned her a reputation far beyond the music industry. As the president of a major online research company observed: “If Swift were an economy, she’d be bigger than 50 countries.”
Analysts estimate that Swift’s ‘Eras Tour’ is set to earn $1 billion in sales, but that’s not all. She is becoming a core pillar of the US economy, with the tour generating close to $5 billion in consumer spending in the United States alone.
It's no wonder when Swifties are willing to spend $1,300 on average for the perfect concert experience, between costs for tickets, travel, accommodation, and clothing.
Now that the US leg of the Eras Tour has concluded, we will have to wait at the edge of our stadium seats until May 2024 to see the full impact of the European leg. In the select UK cities Swift is set to visit, local economies should prepare for a commercial boost. As the Governor of Illinois noted, it took just three concerts to break Chicago’s hotel revenue record and revive its tourism industry.
At this point Eras is much more a Tour, it's a financial phenomenon. The concert film ‘Taylor Swift: The Eras Tour’, recently released in the UK, grossed a casual £5.7 million in ticket sales in its first three days alone.
Where next for Taylor Swift the economic juggernaut? Watch this space. The Swift empire is not to be underestimated.
And that’s it for this week. I hope you found something of interest that you might want to delve into further. If so, please get in touch at cwilkins@audleyadvisors.com.
For now, that’s The Weekend Box officially closed.