Amazon enters the AI race, THG acquires City AM and rental demand 3x since 2019

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Here are the top 5 stories for British business leaders today:

1) Owner of Myprotein and LookFantastic, THG, decides its going to have a shot at running a newspaper by acquiring City AM

• What happened: City AM is a free daily newsletter given out in physical copy - akin to Metro, but more business oriented. They’ve has been struggling since the pandemic due to the reduction in commuter numbers. THG, who we wrote about previously, have acquired City AM, securing a continuation of the business for readers & the ~40 staff members. (Read more)

• Why it matters: This acquisition marks a move away from THG’s core business in e-commerce (and the few hotels / other properties they own). THG’s founder, Matthew Moulding, has said this would allow the group to reach a new audience. Whilst it’s unclear what the rationale for the acquisition is, it’s likely to be to at least partly diversify the business away from its current core.

2) Amazon enters the AI race with a customer service AI tool and more

• What happened: Amazon have introduced a range of AI services already (read more). These include:

  • Amazon Bedrock for businesses to create AI applications;

  • A customer-service agent program (for businesses to implement); and

  • A healthcare system for generating clinical notes after a patient visit.

• Why it matters: When Amazon enters a new industry, you take it seriously. Their AI services have already attracted trials from large companies such as Sony and Ryanair, and apparently thousands more. Amazon’s self-touted advantages in this space include:

  • The range of AI models on offer

  • Lower prices for use of those models

  • Their existing role as the largest cloud provider by revenue, which makes it easier to add the sale of AI tools to customers.

3) Government (ONS) data shows that depression and anxiety are increasingly causing absenteeism amongst workers

• What happened: Britain’s economic recovery has been slower than that of other countries. This is partly because the number of people who are able to work remains below 2019 levels. Which in turn is part driven by a 40% increase in the number of people reporting ‘depression, bad nerves and anxiety’. (Read more)

• Why it matters: The increase in these conditions is likely driven by a range of factors, which includes increased reporting and awareness. However, the ONS report also highlights that another driver is longer waiting times in the NHS, which have led to an increase in the number of people awaiting treatment from 4.6 million in 2020 to 7.4 million by May.

4) Competition for rental properties has shot up, with 3 times as many enquiries per property

• What happened: Demand for rental properties has increased significantly since 2019. The main driver of this has been increasing interest rates, which have made it harder for people to afford mortgages and some landlords having to sell their property. As the graphic above shows, in some areas of Britain, there can be up to 30 rental enquiries for a given property. (Read more)

• Why it matters: Higher demand for rental property comes with higher rents. Landlords increase rents and often tenants put in bids higher than asking as well. This hurts those who are already tight on cash the most, particularly given the increasing cost of food and other items.

5) The UK’s electricity & gas regulator, Ofgem, has announced rules that make electricity suppliers less likely to go bankrupt

• What happened: The past year has seen more than 30 energy suppliers fail, prompting Ofgem to impose rules to make further failure less likely. Under the new rules, companies will have to hold a level of capital which makes them better able to cope with changes in market conditions, without having to declare bankruptcy. (Read more)

• Why it matters: The failure of an energy supplier doesn’t just cause faff for everyday users - it also costs every household an extra £83 (per Ofgem’s calculations). This is why Ofgem has put these new safeguards in place to safeguard companies, and ultimately everyday energy consumers.