OpenAI’s £5bn funding raise
Plus, BoE hints at lowering interest rates, Starling Bank “shockingly lax” and Tesco sales rise
OpenAI CEO Sam Altman (Image: Jason Redmond/AFP via Getty Images)
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Business Agenda
A summary of the most important business news
By Sarah Vizard
1. Tesco’s sales rose 3.5 per cent year on year to £31.5bn in the six months to August 24, while operating profit grew 13 per cent to £1.6bn. CEO Ken Murphy has credited “a combination of price, quality and innovation” for its improved competitiveness and “continued momentum”. More details here.
2. Starling Bank has been fined £29m for “shockingly lax” financial crime controls that the City regulator says “left the financial system wide open to criminals and those subject to sanctions”. Banks are legally required to conduct rigorous checks on new customers to prevent money laundering and fraud, but the Financial Conduct Authority identified serious concerns with Starling’s checks. You can read more here.
3. The governor of the Bank of England, Andrew Bailey, says the bank could become “a bit more aggressive” in lowering interest rates if inflation continues to subside. In an interview with The Guardian, he also warned that oil prices could rapidly increase if the situation in the Middle East escalates further. You can read the full piece here.
4. OpenAI, the company that develops ChatGPT, has raised $6.6bn (£5bn) in its latest funding round from backers including Microsoft, Nvidia, SoftBank and Thrive Capital. The deal values the tech company at $157bn, making it one of the most valuable start-ups in the world. You can read more here.
5. The number of people in the UK out of work due to ill health is growing by 300,000 a year, according to analysis by the Health Foundation think tank. It found that there are now 4 million people of working age out of work due to ill health, while a further 3.9 million with work-limiting conditions are in employment. You can read more here.
Business Question
What percentage of Gen Z professionals would choose an individual route to progression over managing others?
A. 72 per cent
B. 65 per cent
C. 57 per cent
D. 43 per cent
The answer can be found at the bottom of the page.
Business Thinker
Deep dives on business and leadership
By Dougal Shaw
♪ Xavier Niel joins board of TikTok
“You may have read in the newsletter last week that I took a trip to Paris to visit the start-up mega-campus Station F. The video and article resulting from that will be out soon. This Wired feature gives a bit of background on Xavier Niel, the French billionaire known as the Richard Branson of France, who set up and bankrolled Station F.
He’s just joined the board of TikTok, as it continues its fight with US regulators. Interestingly, TikTok for Business has a big presence at Station F helping start-ups – perhaps not a coincidence. Interestingly too, President Macron is visiting Station F today, a sign of how important a symbol it is for France.
🔄Reddit upvotes AI translation
If your business product is, in effect, words (like a news website, for example), then what’s one way to expand your market? Translate those words into multiple languages to publish the content to international markets. Reddit is harnessing AI’s translation skills to serve up its content, which is generated by users in community chat boards, to readers in new countries.
Reddit went public earlier this year and wants to expand. It is bringing this automatic, machine learning-powered translation service to more than 35 new countries in Europe, Asia, and Latin America. I interviewed Reddit’s co-founder and CEO Steve Huffman back in 2016 when he visited The Next Web Summit in Amsterdam. He was looking for new ways to monetise the site even back then. You can read my article here.
🚘 Motorway enters the fast lane?
Motorway, the used car marketplace which is a British unicorn, this week released its financial results (always a good MOT) for 2023. Its total sales through the platform rose to £2.2bn. Revenue reached £60.9m, a 48 per cent increase from 2022. Gross profit also increased by 52 per cent, rising to £54.5 million.
There were fears for the firm when Cazoo fell into administration in May. Cazoo sells second-hand cars too, though with a different business model.
However, it is worth noting that Motorway is still operating at a loss as it invests in expansion. Ultimately, that operating loss is the dial on the dashboard industry watchers will observe closely, as Motorway aims to dominate the UK used car market, which it reckons to be worth £100bn.
Tom Leathes, the co-founder and CEO of Motorway, was a guest on our My CEO Secret video series this summer and shared some memorable leadership advice about eating your vegetables, which you can watch here.
Business Quote
Inspiration from leaders
“You don’t manage people, you manage things. You lead people.”
– Rear Admiral Grace Murray Hopper
Business Leader
The best of our content
Why hustling hard isn’t enough
Almost everyone is obsessed with the mindset of sports people. The consistent dedication and sacrifices required to be considered the best of the best. Stories of their hard work echo in eternity.
Michael Jordan famously said: “I’ve missed more than 9,000 shots in my career. I’ve lost almost 300 games. 26 times, I’ve been trusted to take the game-winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed.”
We put these quotes on our walls and plant them in our heads to dip into when we’re struggling to help dig that little bit deeper. However, the reality of elite sport is that while this is an important ingredient of success, recovery is just as important.
Business Leader’s Expert on sustaining performance, Catherine Baker, has penned a piece on why leaders need to learn the power of recovery from elite-level athletes. In it, she points to an appearance by high-performance psychologist Mike Gervais on Simon Sinek’s podcast. Besides helping Olympians win gold medals and the Seattle Seahawks win the Superbowl, Gervais has also CEOs take their companies to the next level.
“When I spend time in the corporate world, we are not talking about working harder. The hustle hard thing, I can’t ascribe to it because I’m looking at people who are exhausted and anxious. The message from elite sport is that I want to show you how we recover. What happens behind the valet rope of elite sport is that we spend way more time talking about daily recovery than we talk about working hard.”
It’s an interesting conversation and well worth a watch:
We shouldn’t cherry-pick the elements of someone’s success to be our north star because it is far more nuanced than that. What they do in the off-season is often just as important in the work they do during the season.
One inspirational quote that you won’t see plastered all over LinkedIn is this one by author Sage Rountree: “Remember, often doing less is more powerful than training more.”
You can read Catherine Baker’s article here.
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And finally…
Lunch with the FT has become something of a media institution. It is a weekly interview with a prominent figure that is published in the Saturday edition of the Financial Times. The editor of FT Weekend, Janine Gibson, has given her own interview to Press Gazette in the style of Lunch with the FT and offered some insight into what makes a great piece.
“If you have somebody that’s too powerful they’re so limited in what they can say. If they speak too often, it’s very hard to get something new out of them,” Gibson says. Instead, she explains, the ideal candidate is “somebody who has just left or is just about to leave a very significant job”. You can find the interview in full here.
The answer to today’s Business Question is A. 72 per cent.
