Technology DECODED

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Verdict’s week in data: Google may charge for GenAI and UK AI super-brains

Alongside our daily news coverage, features and interviews, Verdict’s news team sifts through the week’s most intriguing data sets to bring you a roundup of the week in numbers.

This week saw reports that Google is considering charging for GenAI features, a UK AI start-up raising funds for an AI super-brain and another major gaming company sale.

Google considers charging for GenAI features in major business model revamp

Google is considering charging for new premium GenAI features, which would mark the first time the search engine giant has put any of its core products behind a paywall. 

Google may charge for features such as its Gemini AI assistant in Gmail and GenAI-powered search, the Financial Times (FT) reported, citing three people familiar with the matter. 

Big Tech companies including Google have been evaluating how to most effectively implement GenAI into their business models.

Engineers are reportedly working on developing the technology but are undecided on whether or when to launch it.

Google’s main search engine will remain free and ads will continue to be shown alongside search results even for paying customers, according to the FT

“We are continuing to rapidly improve the product to serve new user needs,” a Google spokesperson said. 

According to GlobalData's deals database, GenAI's value totalled $7bn in 2023. This marked a major increase over 2022 when deals totalled $3.3bn.

In 2018, the value of GenAI venture financing deals in the country was just $215m. The volume and value of GenAI deals have been rapidly increasing in the US, driven by the release of OpenAI's ChatGPT.

GlobalData forecasts that the overall AI market will be worth $909bn by 2030, having grown at a compound annual growth rate (CAGR) of 35% between 2022 and 2030.

In the GenAI space, revenues are expected to grow from $1.8bn in 2022 to $33bn in 2027, a CAGR of 80%.

UK start-up raises £10m to speed up LLM training with AI super-brain 

Oriole Networks, a UK start-up that uses light to train large language models (LLMs), has raised £10m ($12.64m) in seed funding as it hopes to solve AI’s critical energy problem.

The round was co-led by the University College London (UCL) Technology Fund, the Clean Growth Fund, XTX Ventures and Dorilton Ventures, with support from Innovate UK Investor Partnership. 

UCL spinout Oriole Networks was created in 2023 by Prof. George Zervas, James Regan, Alessandro Ottino and Joshua Benjamin. The start-up has found a way of using light to connect thousands of AI chips into what the company calls a “super-brain”.

According to the company, the super-brain can be used to train LLMs a hundred-times faster than traditional methods with just a fraction of the energy. Oriole Networks said it has the power to revolutionise time-critical tasks, increase AI adoption and accelerate machine learning algorithmic progress in a low-carbon world.

The value of AI venture financing deals in the UK reached a peak in 2023, according to GlobalData's deals database.

AI deals in the UK totalled $3.7bn in 2023, marking a significant increase from just three years prior, which saw deals total $1.5bn in the country.

The value of deals in the UK saw a slight decrease in 2022, totalling $2.8bn, a slight increase from $3.5bn in 2021.

Sweden’s Embracer Group to sell Gearbox Entertainment to Take-Two for $460m

Swedish games giant Embracer Group has confirmed that it is divesting Gearbox Entertainment to 2K Games and Rockstar parent company Take-Two for $460m (SKr4.9bn). The move comes just three years after Embracer purchased Gearbox for $1.3bn.

Embracer has been dramatically downsizing its company following a flurry of acquisitions and the collapse of a potentially “transformative” $2bn deal in 2023. 

According to a Verge report, the botched deal, which is rumoured to have involved the Lord of the Rings IP, fell through when Saudi-owned Savvy Games Group backed out. 

After the deal collapsed, the company said it was undertaking a “comprehensive” restructuring of the business.

Embracer sold Saber Interactive for $247m in February and laid off 1,400 people last year. The company also closed beloved Saints Row maker Voilition and Square Enix Montreal in 2023.

“Today’s announcement marks the result of the final structured divestment process and is an important step in transforming Embracer into the future with notably lower net debt and improved free cash flow,” Embracer CEO Lars Wingefors said in a statement. 

The news comes as the value of gaming mergers and acquisitions (M&A) deals peaked in 2022, according to GlobalData's Deals Database.

The value of M&A deals steadily increased from 2018, before plummeting in 2023, according to the company.

In 2022, the value of deals totalled $123bn, a significant increase from 2021, which saw deals totalling $93bn.

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