Industry Briefing #16

Technology media highlights

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The Briefing
Published date
August 9, 2024

The Briefing keeps consultants ahead by unpacking essential trends and emerging questions they can answer through market research.

On this week’s issue: The tech landscape is in flux as the EU and US consider AI restrictions, even as Google rapidly rolls out new features. Intel faces large-scale layoffs after a poor second quarter, while CrowdStrike deals with legal challenges following a major outage. In the dating world, apps are losing favor as singles explore new ways to connect.

Key highlights

The EU and US governments are exploring restrictions for AI technology. 

Dating apps are falling out of favor as singles are seeking alternative ways to find connection. 

Intel has announced large-scale layoffs after a disappointing second quarter.

CrowdStrike faces legal challenges after its historic outage. 

Google is introducing new AI features at a rapid pace. 

Governments globally are tightening up AI use restrictions.

Government entities in both the European Union and the United States are implementing new AI restrictions in an effort to protect consumer privacy and eliminate digital safety threats. The EU’s new AI Act took effect on August 1st, which will prohibit the use of AI tools in specific high-risk situations, and requires AI companies to comply with certain standards regarding transparency, discrimination, and sustainability. 

The average European consumer is unlikely to see a drastic change in AI accessibility right away. However, it’s possible that AI startups based in other parts of the world won’t release their products in Europe in the future. Some have criticized the new legislation, and some worry that it could stifle AI innovation in Europe. However, it’s difficult to predict exactly what these restrictions will look like in the long term, as they could continue to change as they are implemented. 

New AI restrictions are also on the table in the United States as many are concerned about plagiarism and impersonation. A group of US senators recently proposed a bill that would give individuals the right to their digital likeness. This bill would give deepfake victims legal protection and recourse, which isn’t currently an option. In addition to holding individuals liable for creating deepfakes, it would also hold the platforms and companies involved responsible. This means that generative AI platforms would need to implement new preventative measures to avoid legal liability. 

The state of California is also considering new AI legislation. A state senator has introduced a bill that would require certain safety measures and tests for AI companies over a certain size. This bill primarily focuses on preventing catastrophic events caused by AI. As with the EU’s new legislation, some have criticized the California bill over concerns about innovation. 

These new proposed laws come as many AI startups are investing heavily in government lobbying efforts. In the upcoming US election, the two major candidates have diverging stances on AI oversight. With these lobbying efforts, startups are attempting to sway AI-focused legislation their way before a new administration takes office. 

Dating apps are struggling as singles are opting to meet potential matches IRL.

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For years, many young singles relied on dating apps to meet potential romantic partners. While these apps boasted an easy, efficient way for people to make connections, they appear to be falling out of favor as their target market looks for offline romance instead. 

Recently, Match Group announced layoffs for 6% of its staff. These layoffs are a direct result of the company cutting livestreaming services across its apps. Match Group owns Tinder, Hinge, Match.com, OkCupid, Plenty of Fish, and several other dating apps. Many of these apps have seen their paid user bases decline recently — for example, Tinder’s paid user base dropped 8% in Q2 2024. 

Some people are also opting out of dating apps for privacy and security reasons. A recent research study assessed vulnerabilities in dating app design and found some concerning results. Most notably, both Bumble and Hinge have a vulnerability that would allow stalkers to pinpoint another user’s location down to 2 meters. While the apps have since fixed this issue, it highlights why privacy and security have become such a big concern for dating app users. 

Intel announces mass layoffs, but remains committed to next-gen chip development.

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On August 1st, Intel announced a shocking round of layoffs. The chipmaker has stated that it will cut over 15,000 jobs after a poor second-quarter earnings report. Intel’s revenue numbers have been consistently spiraling downward for several years, and these layoffs are a cost-cutting measure intended to mitigate further damage. This comes during a tough period for the tech job market, as many major employers have had layoffs throughout 2023 and early 2024. 

These job cuts also come just a few months after Intel was promised $8.5 billion from the US government in its efforts to support domestic chip manufacturing. This money is intended to go to new plants in four different states, which Intel says are still planned to move forward. The company is also planning to release its next-generation CPU chips in September, which are likely to have more advanced AI processing power than current models. 

These layoffs also come amid issues with Intel’s 13th and 14th Gen Intel Core processors, which have been crashing. While a forthcoming patch is planned, Intel is expanding the chip’s warranty for now to provide protection for customers who have been affected. 

Microsoft and CrowdStrike are still dealing with the fallout from the historic outage.

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In mid-July, a problem with an update for CrowdStrike security software caused a massive global outage for Microsoft products and systems. This outage affected approximately 8.5 million devices around the globe, making it one of the largest IT incidents ever. Many industries came to a complete standstill, with organizations unable to access the devices and programs they needed for normal operation. 

The airline industry was hit particularly hard, with roughly 3,000 flights canceled in the US alone on the first day of the outage. This left passengers stranded around the world. Operations at hospitals, banks, government offices, and broadcasting companies were all affected as well. CrowdStrike’s stock has dropped rapidly since the incident and is down by over 40% in less than a month. 

Now, CrowdStrike shareholders are launching a class-action suit against the company. The lawsuit alleges that CrowdStrike misled shareholders about the capabilities of its Falcon security program. On top of that, Delta Airlines is considering taking legal action as well to recoup financial losses from canceled flights. Delta was the airline that was hit hardest by the outage and has still not fully recovered. In addition to a potential lawsuit, Delta is also reconsidering its relationship with Microsoft.

Google is going all-in on AI to stay competitive in a cutthroat tech market.

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Google is making a large push into the AI space, announcing and releasing new AI-powered features at a rapid pace. In May, Google added Gemini-powered automated responses to search results, and the company now plans on adding more Gemini features to the Google Chrome browser. Google Cloud is also planning on adding new AI features in the near future. In addition to Gemini, Google has released smaller open-source generative AI models as part of its Gemma 2 family

With many of its top competitors investing in AI, it’s no surprise that Google is making this shift. Many of the company’s new AI features are designed to make repetitive tasks easier and more convenient. However, not everyone likes being inundated with AI technology at every turn or is happy with this new shift. Google’s focus on AI has also resulted in a 48% increase in greenhouse gas emissions since 2019, which will make it very difficult for the organization to meet its long-term climate goals. 

Many people also have concerns about how AI is being promoted. Most notably, Google has received extensive criticism for an ad during the Paris Olympics in which a father uses Gemini to help his daughter write a fan letter to an Olympic track star. Critics have pointed out that writing a heartfelt personal message may not be an ideal use case for generative AI technology. 

Questions to Stay One Step Ahead

The current tech industry landscape is one of extreme competition and exciting change. AI technology continues to fuel innovative new solutions, but also raises questions of privacy and security. Technical missteps and security incidents have also resulted in financial losses and layoffs for many tech companies. To thrive in this competitive environment, companies will need to develop a deep understanding of their target audience and their needs and preferences. 

  • AI tools: How do consumers use AI tools in their day-to-day lives? Do they support AI regulations or prefer an open-market approach?
  • Dating apps: Do consumers feel safe using dating apps? Do they prefer to meet potential partners online or offline?
  • CrowdStrike outage: How did the CrowdStrike outage change consumer perceptions of the companies involved, such as Delta, Microsoft, or CrowdStrike itself? 

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