Unlock the Editor’s Digest free of charge
Roula Khalaf, Editor of the FT, selects her favorite tales on this weekly e-newsletter.
One Japanese tech group has emerged a major, but under-appreciated, beneficiary of the worldwide synthetic intelligence growth. Shares of Fujitsu have risen by almost two-thirds from final yr’s lows because it positions itself as a severe contender in enterprise AI transformation.
Fujitsu has launched proprietary generative AI platforms and invested closely in hybrid computing infrastructure in addition to growing superior liquid cooling techniques that assist cut back information centre energy consumption. But at the same time as its AI momentum accelerates, a disaster from the UK might derail its progress.
The problem includes the UK Submit Workplace’s Horizon IT system, which Fujitsu developed and maintained. Between 1999 and 2015, a whole bunch of sub-postmasters have been wrongfully prosecuted for theft, fraud and false accounting because of defective information produced by the system. Some people have been imprisoned and others pushed to chapter.
As public outrage grows, Fujitsu — which a public inquiry final week stated was conscious of “bugs, errors and defects” in its software program — is going through renewed authorized and political scrutiny, with requires accountability intensifying in Parliament. Former MP Kevan Jones has proposed that Fujitsu contribute an interim compensation fee of £300mn.
That fee could be equal to a few fifth of Fujitsu’s adjusted working revenue for the fiscal yr ended March. When accounting for extra dangers corresponding to authorized charges, compliance prices or potential income losses from suspended contracts the monetary affect might be considerably increased.
Fujitsu’s income is closely uncovered to the UK public sector. It has been a key authorities provider for many years, with UK Treasury-affiliated organisations alone holding over £3.4bn in lively contracts with Fujitsu since 2019. If political strain escalates and triggers a partial or full exclusion from future public-sector initiatives, as some MPs have demanded, the fallout could be severe. Even simply shedding its contract enterprise with HM Income & Customs might value Fujitsu as much as £300mn in annual income.
Fujitsu has been in an excellent place so far as its world AI goals are involved. Its providing, which incorporates cloud computing and provide chain administration, has been a key driver of group earnings development over the previous yr. Traders have been betting the acceleration in demand from corporations for Fujitsu’s platform will proceed. If ongoing points within the UK erode each its earnings energy and the belief of the corporate’s worldwide purchasers, they may but find yourself wrongfooted.
june.yoon@ft.com
