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Machine learning

Global Disruptions: Outages, AI Impact, and Profits Plummet

Strategic Insights

— 2 min read

A massive outage at Amazon Web Services (AWS) affected numerous high-profile apps, including those of HMRC, Halifax, and Lloyds, causing a spike in reported outages. This incident highlights the consequences of relying on shared digital infrastructure, where a single failure can cascade into a broader disruption. Meanwhile, Wikipedia has experienced an 8% drop in human visitors due to the rise of generative AI, with search engines providing direct answers instead of linking to the site. Additionally, B&M has reduced its profit guidance for the second time in a month, attributing the issue to an accounting error and an operating system update. Furthermore, SlimFast's UK and European business has been acquired by Supreme for £20.1m, driven by the growth of weight loss drugs.

Key Takeaways:

  • The outage at Amazon Web Services (AWS) caused a spike in reported outages across various online services, including HMRC, Halifax, and Lloyds.
  • The incident highlighted the vulnerability of relying on shared digital infrastructure, where a single failure can impact multiple companies.
  • Wikipedia has seen an 8% drop in human visitors due to the rise of generative AI, with search engines prioritizing direct answers over linking to the site.
  • B&M has reduced its profit guidance for the second time in a month, attributing the issue to an accounting error and an operating system update.
  • The mistake has resulted in a £7m shortfall in overseas freight costs, which were not correctly recognized in the cost of goods sold.
  • SlimFast's UK and European business has been acquired by Supreme for £20.1m, driven by the growth of weight loss drugs such as Mounjaro and Wegovy.
  • The deal includes a deferred payment of £9m due in 15 months and is expected to expand Supreme's drink and wellness offerings.

Statistics:

  • Over 2,681 reports of AWS outages were logged on Downdetector.
  • 500 reports of issues were logged for the HM Revenue & Customs website by 9am.
  • Wikipedia has seen an 8% drop in human visitors due to generative AI.
  • Traffic to Wikipedia was down 8% year on year as a result of search engines using AI.
  • Click-through rates for AI Overviews had dropped by 89% for DMG Media.
  • Adjusted earnings for B&M's half-year to September are set to be around £191m, down from the original estimate of £198m.
  • SlimFast's UK and European assets reported unaudited revenue of £25.5m and adjusted gross profit of £9.7m last year.

Sources:

  • Wikipedia: AI is causing visitor numbers to plummet
  • Wikipedia: Blog post by Marshall Miller
  • Competition and Markets Authority: Statement by DMG Media
  • B&M: Results update
  • Supreme: Acquisition of SlimFast's UK and European business
  • Downdetector: Reports of AWS outages
  • PA: Business news articles

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