CIBC Tech & Innovation Market Update – December 2024

Starbucks had trouble paying its employees in November, and not because of a cash flow issue. The coffee giant is one of several large blue-chip companies that has had its operations impacted by an ongoing ransomware attack on a supply chain software company. That company is Blue Yonder, an Arizona-based provider of supply chain planning software for 3,000+ global companies and a peer to Kinaxis. Ransomware attacks have been on the rise over the last several years and as more data moves into the cloud hackers are exploiting factors unique to cloud, such as the ability to impact multiple companies by targeting a single software provider. According to CrowdStrike’s 2024 Global Threat Report, cloud environment intrusions increased by 75% from 2022 to 2023. If you have an account with one of the affected companies you may want to consider changing your password: IBM recently reported that 46% of cyber breaches in 2024 involved customer personal data.

In its landmark antitrust case against Google, the Department Of Justice (DOJ) is swinging for the fences. The DOJ and a group of states asked the federal court to force Google to divest its Chrome browser. The request follows the DOJ’s August victory, when Judge Amit Mehta ruled Google has created and maintained an illegal monopoly in search. Google generates significant ad revenue from Chrome user data, with Bloomberg noting Google’s Chrome business could be worth up to $20B if the presiding judge orders its sale. Google shares were down ~5% after the news broke.

We’ve written about party differences on tech policy in the past, but with Congress returning to Washington post the US election, we thought it prudent to revisit the President-elect’s stance on tech and evaluate where we could see change over the next four years. The new administration will oversee a period of significant technological advancement and investment and there are several key areas where the incoming administration appears to differ in opinion from the prior. In particular, many expect President Trump to target the FTC early in his term, given previous comments pledging to curb “regulatory onslaught” from independent agencies.

Wharton University recently published a report based on an analysis of findings from a survey of more than 800 U.S. senior business leaders. Participants of the survey included only leaders of large commercial organizations with 1,000+ employees. The report found that weekly usage of GenAI in the workplace has almost doubled over the last year, from 37% in 2023 to 72% in 2024. While discussions around AI last year heavily centered around opportunity and hype, companies are now more focused on measurable ROI as the dust settles. Spending on GenAI more than doubled in 2024 and the majority of responders (68%) reported current GenAI budgets over $5MM; however, survey results indicate increases in spending will likely slow as companies search for returns.