The Next Big Theme: August 2023

Online social platforms show resilient pricing power, artificial intelligence maintains relevance as providers refine their offerings, and microchips become a top priority for the US government. In this month’s Next Big Theme, Global X explores the recent news and developments in social media, fintech, AI and more.

Social Media & Streaming

Platforms Tap Into Consumer Loyalty for Growth

The growth prospects of social and online sharing platforms continue to climb, and recent price increases reflect their potential. Spotify raised the price of its premium service by US$1 to US$10.99, marking its first price adjustment since 2011.1 Spotify also raised prices for its subscription tiers Duo, Family, and Student.2 YouTube increased its individual YouTube Premium plan by US$2 to US$13.99 per month and YouTube Premium Music by US$1 to US$10.99 per month.3 Apple and Amazon also raised prices for their music subscription offerings over the past year.4 Feature enhancements can be another source of growth. Despite Threads’ initial rapid growth tapering off, Meta remains committed to developing the platform. Recent updates to Threads include a Following tab that enables users to access threads from followed accounts in chronological order, deviating from algorithm-driven suggestions.5 Also, in response to user demand, Threads is set to add a desktop-friendly web version and a full search feature.6

FinTech & Millennial Consumers

FinTech and Big Tech Show Synergy

The payments landscape is ripe with new and enhanced consumer services. Fiserv unveiled a collaboration with Amazon that enables eligible debit and credit cardholders to convert uChoose Rewards® points into purchases on Amazon.com and the Amazon mobile app.7 Over 200 financial institutions are enrolled, and hundreds more are expected to provide this redemption feature by year-end.8 PayPal introduced PayPal Pay Later to Microsoft customers in several countries, including Australia, Germany, France, Italy Spain, the United Kingdom, and the United States.9 Also, US customers will soon be able to use PayPal’s Venmo in the Microsoft Store, an extension of an existing partnership focused on Xbox purchases.10 Apple Pay helped Apple to record-breaking revenue within the payment services category in Q2 2023.11 Recent Apple Card success includes its Savings account, which exceeded US$10 billion in only about four months since its debut in April.12

Artificial Intelligence

Generative AI Intersects with User Experience

Pioneers in the field of generative AI are consistently refining their offerings to elevate user experiences across a multitude of domains. Google is updating its AI-powered Search Generative Experience (SGE) with images and videos in the summary box above search results.13 With the SGE feature enabled in Search Labs, users can expect a richer multimedia display for search outcomes. Still in the experimental phase, Google continues to refine this feature, aiming for faster presentation of the summary box and more contextual information for the linked content. With Meta’s generative AI-based AudioCraft, users can create musical and audio compositions.14 AudioCraft models MusicGen and AudioGen tools use text inputs to generate new audio content, while its EnCodec model enhances music quality through reduced artifacts.15 Microsoft rolled out the Windows Copilot Preview to Windows Insiders via a controlled feature release.16 The initial preview prioritises an integrated User Interface (UI) experience, with forthcoming previews set to show additional functionalities.

Semiconductors

Chip Security Top Government To-Do Lists

Global semiconductor sales surged to US$124.5 billion in Q2 2023, a 4.7% increase from Q1.17 June sales increased 1.7% from May to US$41.5 billion.18 Continued sales strength shows why governments are so keen to develop the industry. In the United Kingdom, the government aims to create the next generation of scalable semiconductor companies, helped by initiatives like the Silicon Catalyst-led pilot incubator program, which offers startups contract, funding, and team-building training.19 China aims for semiconductor self-sufficiency amid persistent trade sanctions. Working towards that goal is the National Natural Science Foundation of China (NSFC), which introduced a program to allocate up to US$6.4 million to as many as 30 research projects focused on “chiplet” technology. Chiplets are small, well-defined integrated circuits that can be combined with other chiplets.20 At the end of 2022, India’s government announced a US$10 billion incentive plan to develop the country’s semiconductor industry. At the SemiconIndia conference, top US semiconductor firms Micron, Cadence, Applied Materials, and AMD lauded India’s technological prowess, emphasising their investments in the country and new ventures.21