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Elon Musk started off the demo of xAI’s latest AI model Grok 3 yesterday saying their aim is to ‘understand the universe’. Whilst Grok might be a way off from calculating the answer to life, the universe and everything (i.e. 42), it shows an impressive leap forward for a company only founded in 2023.
xAI claims that Grok 3 was developed with a minimum 10x more computing power than its predecessor, Grok 2, using an expanded training data set, and scaled rapidly through the huge investment in building their own data centre, powered by the Colossus supercomputer (See - xAI Colossus to grow to new heights). xAI has been able to get Grok up and running at unprecedented speed, using 100k GPU’s to initially train the system from scratch, in only 122 days. Phase 2 has seen xAI scaled to 200k GPUs, doubling in size in only 92 days.
Benchmarks (which as ever have to be taken with a pinch of salt) show Grok 3 outperforming GPT-o3 mini, Claude 3.5 sonnet, DeepSeek V3 and Gemini 2 Pro. Musk says that Grok 3 is being continuously trained, improving daily. In addition, Grok 3 comes with advanced reasoning capabilities, a feature we have come to expect from the latest AI models. AI reasoning allows for more considered responses, as well as an explanation of the AI’s thought process. Some aspects of the thinking are obscured Musk said to prevent companies distilling (aka copying) it – as was believed to be the case with DeepSeek R1.
In the demo we saw Grok plotting a spacecraft mission from Earth to Mars and back – and according to Musk we may well see Grok on board its next SpaceX launch to Mars – possibly in 2 years. We also saw Grok create and code a game, blurring Tetris and Bejewelled, not exactly groundbreaking but still impressive from where AI was only a few years ago.
The ‘next frontier’ according to xAI will be Agents. Grok’s reasoning models underpin a new feature in the Grok app called DeepSearch, xAI’s answer to AI-powered research tools like OpenAI’s deep research. DeepSearch scans the internet and X to analyse information and deliver an abstract in response to a question. Users can also ask Grok 3 to leverage “Big Brain” mode for reasoning that employs additional computing. xAI describes the reasoning models as best suited for mathematics, science, and programming questions.
Whilst you might just dismiss this latest AI announcement as further hyperbole in the AI news cycle, as I stated in my 2024 Artificial Intelligence (AI) Recap, “one underdog to watch is Elon Musk’s xAI, and its Grok 3 model”. Whilst Musk may be eccentric at times, his relentless pursuit for innovation at speed will mean Grok will be a force to be reckoned with and drive new innovations in how we use and consume AI services.
Posted by: Simon Baxter at 09:52
The modest return to top line growth seen by Capgemini UK in the third quarter of 2024 (see here) gathered pace during Q4. Revenue from the territory for the three months ended 31st December hit €683m, an increase of 1.5% yoy at constant currency (Q324: 0.4%). An uptick in demand from both the Financial Services and Consumer Goods & Retail verticals, supported by the continuing resilience of activity in the Energy & Utilities sector, were the main contributors to the region’s improving fortunes.
The second half recovery was, however, not sufficiently strong enough to make up for the H1 decline. Full year turnover in the region dipped by 1.0% you to €2,753bn, albeit operating margin rose by 110 bps against FY23 to a very healthy 19.7%. A continuing shift in the business mix towards higher margin strategy and transformation services helped Capgemini UK retain its position as group’s the best performing geography in terms of profitability.
The going remained harder for the company as a whole in the fourth quarter. Nonetheless, the pace of yoy revenue decline slowed sequentially with firm-wide turnover in Q424 dipping by 1.1% yoy to €5.58bn. This limited the decrease in full year turnover to 2.0% with global 2024 sales reaching €22.1bn. There were further signs during Q4 of recovery in Capgemini’s North America region, the company’s largest geographic business, and the Financial Services and Telco, Media & Technology verticals, which together generate around a third of global sales. Conversely, demand both from the firm’s Manufacturing clients and in France continued to weaken during the final quarter.
From a line of business perspective, Capgemini’s Strategy & Transformation division showed the greatest resilience last year. Revenue from this unit increased by 3.2% yoy in FY24 to almost €2bn, fuelled in part by sales of GenAI-centric engagements. Firm-wide bookings for these reached c.€950m last year, although total 2024 bookings were 0.5% lower yoy at €23.8bn. As we noted in our recent Market Outlook Update, it appears that the accelerated growth in the demand for GenAI services is largely coming at the expense of expenditure on more traditional lines of business (see here).
Commenting of the outlook for the company in 2025, Capgemini CEO, Aiman Ezzat struck a distinctly cautious note. No dramatic changes from business cadence in Q4 are anticipated for the first half of the current year. Moreover, the current uncertainties surrounding the direction of global economic and geo-political developments cloud the view beyond the summer. The firm has therefore opted to provide a broader than usual range for revenue growth guidance of between -2.0% to +2.0% at constant currency in FY25.
Posted by: Duncan Aitchison at 09:29
Tags: results IT+services
Lloyds Banking Group has partnered with UK startup Doshi, to launch a financial education app aimed at students. The co-branded tool utilises gamification techniques and contextual AI to help young people better understand how to save and manage their money. The app is supported by an AI assistant and features a variety of game style “lessons” covering topics such as tax, credit cards, savings, pensions and investing in equities.
Founded in 2021, Doshi aims to make financial education more accessible and engaging. Built by game designers and financial experts the fintech helps to equip its users with greater financial knowledge. Doshi currently provides white-labelled financial education solutions to over 15 UK banks and financial institutions, including TSB. In November 2024, the Market Harborough Building Society launched its own financial education app utilising Doshi’s technology.
Lloyds and Doshi have been collaborating since April 2024 as a result of the bank’s innovation programme. The new app is being piloted amongst 100k of the bank’s student account holders and is expected to run until the third quarter of 2025. The two parties plan to monitor the results of the pilot over the next six months before assessing next steps. If successful the goal is to integrate Doshi’s technology as a permanent feature within the Lloyds banking app.
Posted by: Jon C Davies at 08:41
Posted by: HotViews Editor at 07:00
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Posted by: Future Processing at 07:00
Advania UK has made some personnel changes at the top as it undertakes the integration of acquisitions made last year.
Under CEO, Geoff Kneen, the firm is expanding its top team, adding James Hardy as Chief Commercial Officer and Paul Barlow as Chief Revenue Officer. Hardy was previously in the same role at CCS Media, which was acquired by Advania October 2024. His new role will see him lead the firm’s strategy for, and execution of, taking the new combined portfolio to market. Barlow was the long-time CEO of Servium, acquired by Advania in June 2024. Within the Advania UK business, his role will be to integrate the sales and marketing capabilities into a single team.
This is a very sensible approach, leveraging the insider knowledge of existing senior people with tonnes of market experience. Terry Betts, who was CEO of CCS Media, will be retiring. Advania expects the full integration to complete later this year, by which time the Microsoft specialist should be in very decent competitive shape.
With roots tracing back to Iceland in 1939, Advania has been operating in the UK since December 2021, when it acquired Content+Cloud, from ECI Partners and other shareholders. It is backed by Goldman Sachs Asset Management.
Posted by: Kate Hanaghan at 09:50
Tags: people
With January under our belt, the TechMarketView Research Agenda for Q1 2025 is now full steam ahead.
Across the agenda, our team will this quarter be producing analysis that underpins our 3Ds: Data, Depth, and Disruption.
Data Our analysts have already published some key pieces providing insight into the UK tech market as it currently stands and how we expect activity to pan out. Notably, see our Market Outlook Update, which brings our view of the UK market bang up to date. If you are also a member of our Public Sector research programme, you can read our analysis on the trends and opportunities in Public Sector SITS Market Outlook Update. Stay tuned for our view on the Financial Services market out shortly.
Depth An excellent example of TechMarketView’s depth of analysis is our Sustainability Technology Activity Index (STAI). It brings unprecedented depth of understanding to the actions taken by tech firms and their customers to roll out sustainability-related solutions. With a global watchlist of over 1500 suppliers, the STAI give a unique view of activity by use cases areas (for example, ESG reporting, supply chain optimisation, and carbon capture & removal). We also look at the most commonly used tech and analyse suppliers by levels of activity. Read the report later in Q1.
Disruption If you want to understand just who the ‘next big thing’ will be, TechMarketView’s Disruptors & Innovators series brings to life our understanding of the exciting start-up and scale-up players operating in the UK. This quarter, coverage includes those operating in AI in sustainability and front office BPO. But it’s not just the leading-edge players TechMarketView can help you to understand, it is also the market opportunities. In our Emerging Markets Briefings this quarter, we look at AI-enabled crime and also how new regulations, DORA and CTPs, will impact the market.
For a big picture view of how the market is expected to evolve in 2025, check out this quarter’s View from the Chief Analyst and our Tech Confidence Index (both out later this quarter). And for our tech buyer clients, the latest Market Readiness Index: The Road to AI part 2, goes live. This is the concluding part of our in-depth analysis of the largest 20 IT service providers in the UK and their ability to deliver AI solutions for customers. See Part 1 here. This is only for those on our tech buyer programme, but it can be purchased as a standalone report.
It is safe to say, January, February, and March will bring yet another quarter of analysis that demonstrates TechMarketView’s unique understanding of the UK tech market. You can see the full Q1 Research Agenda here. Remember, this may be subject to change and/or additions.
To find out more about our research and how to gain access, please contact our Client Services team.
Posted by: Kate Hanaghan at 09:06
Tags: ResearchAgenda
Posted by: HotViews Editor at 09:00
DXC Technology has extended its existing relationship with the European Space Agency (ESA) with the award of a new contract to develop an AI platform that will enable the Agency to build and deploy AI-powered solutions. The ESA is an intergovernmental organisation that collaborates internationally and supports economic growth via space technology and research.
The new platform will be named “Ask ESA” and is to be designed and built by DXC. The platform will run on NVIDIA and utilise GenAI from French startup Mistral AI, which specialises in the development of large language models (LLMs). The project has been initiated by Francois Margottin, the ESA’s Head of Application Services.
In 2022 DXC secured a multi-year contract to support the ESA. As a result of that flagship deal, DXC delivers network and security services to the ESA’s international workforce facilitating secure global collaboration from any location. DXC has also been working to modernise the ESA’s network infrastructure replacing it with software-enabled environments and leveraging its data-driven intelligent automation platform “Platform X” to enhance the efficiency ESA operations (see: DXC looks to the stars with latest success).
Following the news of the latest deal with the ESA, Howard Boville, DXC President, Consulting and Engineering Services – Powered by AI said that, Ask ESA would provide “a powerful platform that will help them (the ESA) to quickly deploy practical AI solutions that deliver value.”
Posted by: Jon C Davies at 07:00
The UK government made two AI related announcements yesterday, as it continues to shift its approach towards AI technologies. The first is the Department of Science, Industry and Technology (DSIT) announced that it would be renaming the AI Safety Institute to the “AI Security Institute.” This will see the institute shift from primarily exploring areas like existential risk and bias in large language models, to a focus on cybersecurity, specifically “strengthening protections against the risks AI poses to national security and crime.”
Alongside this DSIT also announced the government has signed a Memorandum of Understanding (MOU) with AI LLM provider Anthropic. The aim is to collaborate and explore the potential of advanced AI tools in improving how UK citizens access government information and services online. This will include advancing best practices for the responsible deployment of AI by the public sector. The government will also leverage Anthropic’s Economic Index, which provides real-world AI model usage data to inform empirical insights into the integration of AI into the modern economy. Other areas of collaboration include securing supply chains for advanced AI and UK infrastructure and advancing scientific progress through AI.
Earlier this week the UK, along with the US, announced it did not sign an international agreement on AI at the global summit in Paris, citing concerns about national security and "global governance". Together with this announcement of the re-naming of the AI Safety (now Security) institute, the UK government is clearly signposting its intention to change the AI narrative, shifting away from one focused on regulation, safety and AI risks, to that of using AI to power economic growth and protect against external threats.
This change in narrative is also clearly aimed at ensuring the UK does not get on the US (and Trump's) bad side. The US has been clear it views the EU’s approach as heavy handed, stifling innovation, and limiting its ability to compete against China, which it views as a significant threat to US superiority. The US (Trump) mentality is one of you are either ‘with us or against us’, it’s very black and white, and so it is somewhat unsurprising that the UK government is treading carefully to not upset one of its largest trading partners.
For UK suppliers this likely means we will see less regulation and less constraints on where and how AI can be developed. This of course does not diminish the fact that in certain areas we clearly need AI regulation, for example military applications, how AI models use personal data and bias in scoring systems (e.g. insurance and benefits).
The overarching theme in the market at present is one of increasing uncertainty, not just in AI but also for sustainability, trade (i.e. manufacturing) and for the stock market, 2025 is already shaping up to be a challenging year for many.
Posted by: Simon Baxter at 10:01
A report in the Financial Times suggests that UK-headquartered Arm is set to launch its own chip later this year.
The paper says sources indicate chips could be unveiled in the summer, marking quite a departure for the firm. Arm’s business model to date has been to create and license processor designs to other firms who in turn apply this to make their own chips.
If we do indeed see Arm changing tack in this way it would ruffle quite a few feathers by putting it in competition with existing customers. The report also suggests that Meta has already been secured as an early customer.
Arm was acquired by Softbank back in 2016 for c.£23bn. Readers might also remember that Nvidia tried and failed to acquire Arm for $40bn, which ultimately led to Arm’s flotation on NASDAQ. Last month, Softbank announced the “Stargate Project”, a new company that would invest $500bn over four years to build new infrastructure for OpenAI in the US. Arm, Microsoft, NVIDIA, Oracle, and OpenAI were named as key initial technology partners.
Tags: chips AI
Cybersecurity platform supplier Palo Alto Networks reported robust Q2 results, with revenues up 14% yoy to $2.26bn. CEO Nikesh Arora highlighted the company's successful execution of its platformization strategy, as well as strong adoption of SASE, software firewalls, and XSIAM solutions.
Growth was broad based across geographies, with the Americas up by 13%, whilst Europe, Middle East and Africa (EMEA) saw an 18% increase, and Japan-Asia Pacific achieved 17% growth.
In his earnings call comments, Arora emphasised the fundamental shift in cybersecurity demands driven by AI adoption. "As the conversation around AI continues to get omnipresent and companies race to evaluate, experiment, and deploy AI, they're discovering that some of the legacy architectures come in the way of their aspirations," he noted. This trend, according to Arora, is spurring a resurgence in cloud transformation projects and consequently driving demand for network security transformation. This is a trend TechMarketView has been highlighting for some time, with organisations across the public and private sectors increasingly needing to invest in strengthening their data and cloud infrastructure foundations to support AI growth.
Arora also pointed to concerning developments in the threat landscape, citing recent Google findings that adversaries are increasingly using GenAI to accelerate attacks, including creating custom payloads and improving evasion techniques. This evolving threat environment has led to increased customer interest in Palo Alto's integrated security solutions.
Palo Alto also reached a significant milestone, with the company's AI-driven security operations platform surpassing $1bn in cumulative bookings. The company's strategic focus on "platformization" - the integration of multiple security solutions - continues to gain traction, with a number of multi-million contracts signed in Q2. Arora concluded by expressing confidence in the company's long-term strategy, particularly regarding the integration of AI capabilities in new market categories such as enterprise browser, Secure AI by Design and the AI-powered SOC.
Posted by: Simon Baxter at 09:46
Innovative UK technology vendor, Revving, has secured a cash injection of £107m as it looks to scale its invoice factoring proposition, targeted at the advertising sector. As a result of the deal, global asset management firm DWS will provide £100m of debt financing.
Based in Wokingham, Berkshire, Revving was founded in 2020 by Chris Pettit and Dave Mandeno. Both the founders previously worked together in the lending department at venture capital firm Vala. For his part, Pettit has a background in law and the media. Revving provides a technology-based alternative to traditional invoice factoring, enabling faster access to working capital for media and advertising businesses. Revving’s platform has been designed to integrate directly with digital marketplaces, capturing sales data to facilitate early revenue access before invoices are generated.
Extended payment terms in the media/advertising sector often stretch up to 120 days. As any business knows, cash flow is fundamental to survival and factoring the value of outstanding debt can provide a vital source of liquidity. Over the next three years, Revving has said that it hopes to finance up to £1.8bn for UK digital businesses. Revving claim that this level of capital injection could potentially generate an economic impact of £8.6bn, based on figures provided by the Internet Advertising Bureau (IAB).
Posted by: Jon C Davies at 09:09
Tags: funding
UK insurance group, Utmost Life and Pensions (formerly Reliance Mutual) has selected it longstanding partner, Atos, to lead a full transformation of its IT estate. The two companies have an existing managed services relationship that began in 2012. Under the terms of this latest agreement, Atos will oversee the migration of Utmost’s IT systems to the Microsoft Azure cloud.
Utmost Life and Pensions originally started life in 1911 as the Farringdon Reliance Friendly Society. During its long history the company has undergone many consolidations prior to rebranding to its current name in 2019. In 2020 Utmost completed the transfer of all of the remaining business of Equitable Life onto its books. Utmost’s IT transformation initiative is designed to improve the company’s business agility, lower infrastructure costs and provide ongoing stability, security and compliance. It is hoped that the investment will lay the foundations for future growth.
Utmost Life and Pensions, selected Atos to lead the IT transformation project based on its deep understanding of Utmost Life and Pensions’ operational needs and its established reputation in transformational outsourcing. Mark Francis, CFO at Utmost Life and Pensions said: “It’s vital that we have a best-in-class IT foundation to provide a reliable and responsive service to the over 290,000 policyholders that Utmost Life and Pensions protects and helps save for the long term. The cloud platform provides us with the scalability we require to meet our ambitious long term strategic growth goals.”
The transformation project is expected to take 18-months to complete. Ultimately, the move to the cloud should equip Utmost with a more resilient and adaptable IT foundation which in turn should help to facilitate innovation through flexible capacity. Utmost also hope that the modern infrastructure will enhance the experience of its employee’s via flexibility, reliability and mobile access.
The Utmost deal will no doubt be welcome news to Atos’ recently appointed head for the UK and Ireland, Michael Herron, as he works to instil greater optimism in his workforce. After months walking a precarious financial tightrope, in December 2024 Atos completed a major restructuring plan that saw its gross debt reduced by €2.1bn and provided much needed financing for the future (see: Atos Group: A new chapter).
Posted by: Jon C Davies at 10:00
Business process player Conduent delivered a mixed set of results for Q4 2024, with revenues falling short of expectations but EBITDA margins landing at the higher end of guidance. The BPS provider reported Q4 revenue of $800m, representing a -16.1% YoY decline, while adjusted EBITDA margin contracted to 4.0% from 8.0% in the year prior.
Overall, Conduent’s revenue for FY 2024 was $3.176bn, representing a -4.3% decline from the previous year and falling slightly below expectations. Adjusted EBITDA saw a significant decline, coming in at $124m for FY 2024 compared to $247m in FY 2023, with margins falling back to 3.9%. This reflects some of the broader challenges faced by the company in maintaining profitability.
On the plus side, strategically Conduent made some significant moves in 2024, completing three major divestitures including BenefitWallet ($425m), Curbside Management and Public Safety ($230m), and Casualty Claims Solutions ($224m). These sales enabled the firm to reduce its debt burden by 50% compared to 2023 levels, strengthening the balance sheet significantly.
Despite top-line pressure, CEO Cliff Skelton highlighted sequential improvement in adjusted revenue over the past three quarters. The company's outlook for 2025 projects adjusted revenue between $3.1bn-$3.25bn and aims to improve adjusted EBITDA margins to 4.5-5.5%. However, the challenging Q4 results, marked by a net loss of -$12m compared to a $6m profit in Q4 2023, suggest ongoing transformation efforts will be crucial for any sustainable growth to occur in 2025.
Posted by: Marc Hardwick at 08:23
Tags: results
In a crowded and competitive market, technology businesses need more than just a great product to stand out – they need a voice that resonates. CommsCo helps scaleups and established tech firms cut through the noise with strategic PR services designed to build brand authority and drive meaningful engagement.
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Posted by: CommsCo at 07:00
Mastek has entered into a new partnership with Indian startup OpenAna. OpenAna is the creator of Ana, an AI-powered autonomous software engineering tool, designed to automate and accelerate software development. The collaboration will focus on integrating OpenAna’s GenAI capabilities into the software development lifecycle (SDLC) process.
Founded in New Delhi in 2023 by Rajiv Sondhi and Arsh Anwar, OpenAna’s AI technology is able to autonomously manage SDLC from design to deployment. The collaboration with OpenAna enhances Mastek’s existing GenAI capabilities and should help its clients to innovate faster, optimise development workflows, and accelerate transformation. By using AI to support the automation of software development, end-user organisations should be able to improve outcomes and consistency.
Raman Sapra, President & Chief Growth Officer at Mastek said of the new alliance “We are excited to partner with OpenAna, as it aligns with our shared vision of transforming Software Development through Gen AI. By leveraging the Ana platform, we aim to empower our customers by developing and maintaining software applications more efficiently and effectively.”
In many ways the automation of software development using GenAI may be one of the most valuable use cases for this technology. In industries such as Financial Services, where many of the largest organisations have significant technology debt, effectively resourcing modernisation is a massive financial overhead and is also often a challenge in terms of accessing the relevant talent (see: AI in UK Financial Services).
Posted by: Jon C Davies at 09:19
UK-based AI workforce startup Noxus has raised $1.5m in pre-seed funding led by SFC Capital, with participation from Antler, Bynd VC, Caixa Capital, AltaIR Capital, I2BF Global Ventures, Yellow Rocks, and Smart Partnership Capital.
Noxus’ platform aims to help its customers bring together a “robust knowledge base” from multiple sources across their organisation in a secure environment, before layering model-agnostic “AI co-workers” range across to support repetitive employee workflows in a number of use cases (mainly around search, analysis, and document preparation).
The company intends to use the funds to further develop and scale its platform and expand.
Subscribers to TechMarketView’s TechSectorViews research can read more about AI in back-office operations in the first of our series of AI Impact reports, which draws on in-depth interviews and proprietary analysis to provide greater insight into the true disruption AI poses across different business domains (see AI Impact: Back Office Operations).
Posted by: Craig Wentworth at 09:19
Tags: funding AI co-workers multi-model
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As shipping companies race to meet ambitious decarbonisation targets, Smart Green Shipping has partnered with MOL (the Mitsui O.S.K. Lines shipping business) to bring modern 35m wing-sails to commercial vessels. By combining centuries-old sailing principles with advanced automation and data analytics, they're showing how traditional maritime wisdom and modern technology can work together to create a more sustainable shipping industry.
Tune in to hear how this innovative tech, along with Smart Green Shipping’s Wind-as-a-Service financing model, is helping shipping operators cut fuel consumption by up to 30%.
For more about our Totally Sust podcast series (new episodes on the first Thursday of every month), including how your company can feature, drop us a note at info@techmarketview.com.
Posted by: HotViews Editor at 08:48
Tags: shipping decarbonisation financing Wind-as-a-Service
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