Last week gave us a slew of news regarding the ever-changing business landscape. In the hot seat was short-form video app TikTok, whose chief executive was harshly questioned by lawmakers in Congress. Banks were deeply affected by the collapse of two tech banking giants, and the Federal Reserve raised interest rates for the second time in a row. Artificial Intelligence (AI) products and features are being developed by Google and other digital businesses, and the Personal Consumption Expenditures price index from the Federal Reserve is indicative of the ongoing battle with inflation. Finally, Hollywood writers are facing a potential strike because of worsening working conditions and wages at major studios.
TikTok, the viral social video platform, is owned by Chinese tech company ByteDance and has been scrutinized for it’s effects on users’ mental health, limits to onscreen time, data privacy, and its connection to the Chinese government. CEO Shou Chew attempted to reassure Congress of the private company’s autonomy from the Chinese government, but failed to convince US politicians.
Banks have reeled from the effects of the slip of Silicon Valley Bank and Signature Bank earlier in March. Shares of First Republic Bank fell dramatically and trading was stopped 11 times to prevent further free-fall. Banks are seeking funds from the Federal Reserve loan program to retain cash and survive potential hard times.
The Federal Reserve raised its benchmark interest rate by 0.25%, a decision made despite the banking crisis. Chair Jerome H. Powell emphasized that officials had “considered” pausing rate increases, but this would do nothing to the stubbornly high inflation.
The race to develop AI that can challenge Microsoft’s progam ChatGPT has been won by Google with the release of its Bard chatbot, but with more than 20 A.I. products planned for the future and OpenAI’s GPT-4 on the horizon, the competition is heating up.
The outcome of the struggles between digital companies and major studios will be seen on this Friday with the Commerce Department’s reading from the Federal Reserve’s preferred inflation index. If the figure comes back down to 3.3%, a number predicted by officials by the end of the year, it will be indicative of the success of the Fed in its inflation campaign. Writers who are part of the 11,000-seasoned Writers Guild of America may also be entering a strike, with the possibility for a vote to authorize a strike by early April.
The Week in Business gave us an exciting glimpse at the changing, modern business landscape.
