• Cliff Equity
  • Posts
  • 📉 £22bn Black Hole In Public Finances

📉 £22bn Black Hole In Public Finances

Microsoft Sidesteps Watchdog in AI Hire

September 05, 2024

This is Cliff Equity, the UK’s business newsletter that keeps you informed on what’s important in tech, business and finance in less than 5 minutes

In today’s stories:

  • Starmer's £22bn Whodunnit: Tories or Labour?

  • Microsoft Sidesteps Watchdog in AI Hire

  • SET Ventures Powers Up €200M Clean Tech Fund

The summary: Starmer and Reeves are blaming the Tories for a £22bn financial hiccup, while the Conservatives reckon it’s a bit of political theatre, but either way, everyone’s spinning the financial drama to keep us all on our toes.

The details:

  • Labour's Starmer blames the Conservatives for a hefty £22bn "black hole" in public finances, a claim rooted in overspending on public sector pay, asylum support, and inflationary surprises.

  • Conservatives brush off the figure as "spurious," accusing Labour of scaremongering to justify tax hikes, with former Chancellor Jeremy Hunt dismissing the gap as exaggerated.

  • Economists note the financial hole shouldn't have shocked Labour, as some costs were foreseeable, like the need for larger pay raises in public sectors.

  • Despite cries of a "black hole," some argue Labour's choices were self-imposed, opting for tough fiscal rules rather than, say, rethinking priorities or bending the rules.

Why it matters: Keir Starmer and Rachel Reeves are playing fiscal detectives, trying to pin the Conservatives for a £22bn financial ‘whoopsie,’ while the Tories insist Labour’s just making a mountain out of a molehill to justify tax hikes. The real punchline? Some of this financial fuss was always on the cards, like higher pay for nurses and teachers, but Labour’s making tough choices sound like divine necessity. At the end of the day, the economy's not about to implode, but everyone’s trying their best to make it feel like the sky is falling.

The summary: Microsoft’s cheeky quasi-acquisition of Inflection’s AI talent has dodged regulatory hurdles for now, but the CMA’s ready to pounce on any future Big Tech shenanigans.

The details:

  • The UK's Competition and Markets Authority (CMA) has given Microsoft the green light on its $650 million quasi-acquisition of AI startup Inflection, deciding it poses no competition threat—so no full-scale investigation is needed.

  • However, the CMA warns Microsoft’s clever "team-acquisition" tactic, where it hires almost all of Inflection’s brains without actually buying the company, could still fall under future scrutiny.

  • Inflection’s prized AI talent, now working at Microsoft, helped the tech giant sidestep the need for a full acquisition while scooping up key expertise, raising eyebrows over this "quasi-merger" strategy.

  • While Microsoft dodges a regulatory bullet this time, the CMA remains vigilant, eyeing future Big Tech manoeuvres with smaller AI firms—especially when it smells a not-so-subtle merger in the air.

Why it matters: Microsoft’s crafty hire-not-buy tactic is a masterclass in skirting regulations while grabbing top AI talent, which might just give them the upper hand in the AI arms race. The CMA’s raised eyebrow signals that Big Tech's sneaky quasi-mergers won’t escape scrutiny forever. In short, Microsoft’s outsmarted the watchdog for now, but the regulator’s keeping a sharp eye on future mischief.

The summary: SET Ventures’ new €200M fund is supercharging Europe’s clean energy future by backing digital innovations that tackle grid challenges, slash emissions, and make renewable energy the star of the show.

The details:

  • SET Ventures has bagged a hefty €200M for their fourth fund, doubling the previous, to back startups with digital wizardry that speeds up the transition to a carbon-free energy system across Europe.

  • The fund focuses on tech that tackles grid congestion, energy demand mismatches, and storage hiccups – because let’s face it, hardware alone won’t solve climate woes.

  • With a portfolio that’s already saved 3.3 million tonnes of CO2, they’re backing clever startups like vilisto and e-mobilio, proving clean energy isn’t just hot air.

  • Long-standing in the clean energy game, SET Ventures aims to future-proof the sector, with a little help from pals like the European Investment Fund and Triodos.

Why it matters: SET Ventures is throwing serious cash at startups to ensure Europe’s clean energy future doesn’t come with a side of blackouts and inefficiency. By tackling grid congestion and energy storage quirks, they’re making sure renewable energy isn't just a pipe dream, but an everyday reality. Plus, saving millions of tonnes of CO2? That’s just the cherry on top of the carbon-free cake.