Week In Review: Sorrell says S4 Capital sales fell due to AI investment, Snap and Google roll out AI ad solutions, and OpenAI acquires coding company Windsurf.
Brands and Agencies
S4 Capital Revenue Falls Due to AI
According to Sir Martin Sorrell, the founder of S4 Capital, clients spending on AI instead of marketing is to blame for the company’s 11 percent drop in the first quarter of this year. In the company’s most recent earnings report, revenue in the Middle East was down 17 percent, whilst Asia-Pacific was down by 13.6 percent – overall net revenue was down 11.4%. The owner of the ad agency, which houses the likes of Monks and MightyHive, also said that recent US tariffs imposed by President Donald Trump are making clients cautious about spending, which is also fuelling revenue slumps.
Zalando Reveals 3D Retail Model Replicas
The online fashion retailer Zalando, known for housing brands such as Adidas, Ralph Lauren, and River Island, revealed this week it’s using AI to create realistic 3D replicas of its fashion models. In partnership with Hamburg-based photography studio ORENDT STUDIOS, the retailer has created ‘digital twins’ of its real-life models, and said the innovation cut costs by 90 percent. Fashion giant H&M also famously created their own ‘digital twins’, with the rise of these replicas saving brands time, and the need to travel for expensive shoots.
Media
Europe’s Media Outlets Join Initiative For Safe AI Use
The European Broadcasting Union and the World Association of Newspapers and News Publishers (WAN-IFRA) launched an initiative to ensure AI is used safely and effectively in media. The initiative, called ‘News Integrity in the Age of AI’, shares five steps to abide by for safe AI use. These include only using authorised generative AI tools for news purposes, stating for readers when AI has been used, and clear lines of communication between technology companies and news organisations. The initiative hopes to establish clearer standards for AI usage, and prevent ethical issues such as misinformation.
National Film and TV School Launch AI Course
The National Film and Television School (NFTS) has created its first AI course, which focuses on the use of the technology in screen productions. The new course, titled Certificate in AI Protocols and Practices for Film and Television, has been developed in partnership with Deep Fusion Films and consists of online, weekly lessons over six months. The course explores the use of AI in film and TV production, whilst delving into the risks and challenges film and TV makers can face.
Copyright AI Amendment Defeated in Parliament
A Data Bill amendment that would make AI companies adhere to copyright laws has been defeated in parliament. The amendment, which involves tech companies giving up information about the data they scrape, was initially passed by the House of Lords but was later defeated in the House of Commons this week. The Bill change was backed by creative industry bodies, such as the Publishers Association, and signifies an ongoing battle between Big Tech and creators, as the use of works continues to be used to train AI models.
Alphabet Creates ‘100 Zeros’ AI Film Initiative
Google parent company Alphabet announced this week that it’s launching an initiative for film and TV productions that use its AI tools. The initiative, first reported by the Business Insider, is a collaboration with Range Media Partners, a management and production firm. Google reportedly plans to search for, fund, and help produce film and TV under the initiative, and is the tech giant’s first major step into original entertainment.
Tech
Microsoft Doesn’t Allow Workers to Use DeepSeek
Microsoft employees aren’t allowed to use Chinese chatbot DeepSeek. That’s what Brad Smith, Microsoft’s Vice President said during a Senate hearing on AI and national security in the US. Smith cited fears around the use of data, especially if associated with the Chinese government. The Vice President also said the risk of DeepSeek’s answers being fuelled by “Chinese Propaganda” played a role in its banning. Many firms have banned DeepSeek from employee-use for the same reasons – this is the first time Microsoft has disclosed this information publicly.
PubMatic Reveals Media Buying Platform
AdTech firm PubMatic announced the launch of an upgraded AI suite of solutions. The buyer-facing platform said the new suite of Gen AI tools will include natural language solutions that let users explain their needs, real-time supply insights, targeting and efficiency tools, real-time optimisation, and privacy protection. “Our goal is to give media buyers a smarter, faster path to campaign performance,” said Kyle Dozeman, Chief Revenue Officer, Americas, at PubMatic. “We’ve embedded Gen AI into the entire PubMatic experience, integrating the technology seamlessly into our proven tools.
Google Uses Publisher Content Despite Opt-Out
Google is reportedly using content from publishers to train its AI models despite them having opted out of their works being used, according to a report from Bloomberg. Eli Collins, the VP of Google’s AI arm DeepMind, said the rules for adhering to publishers’ decision to opt-out of their work being used to train AI models works differently in DeepMind than it does for Google’s Search products. A Google spokesperson told Bloomberg that users “only decline to have their data used in Search AI if they opt out of being indexed for search.”
OpenAI Acquires AI Coding Assistant Firm Windsurf
OpenAI’s ChatGPT is reportedly acquiring AI coding assistant company Windsurf for $3 billion. The acquisition will bolster the tech giant’s offering relating to coding helped by AI, with there being increasing competition in AI coding capabilities from the likes of Anthropic and Microsoft. The deal would mark OpenAI’s biggest acquisition to date and signals a move to be the leader in AI-assisted software development.
Snap Reveals AI Ad Solutions
Snap, the parent company of image-chat social app Snapchat, has announced new AI-powered advertising tools. The tech company’s AI features include ‘Smart Bidding’ and ‘Smart Budgeting’ which lets the advertisers adjust bids and allocate ad spend to the most effective ads. “These tools will allow advertisers to set cost-per-action targets while Snap’s systems handle real-time adjustments,” Snap said in a statement. The new features are currently in alpha testing.
Pinterest Reports Strong Quarter Due to AI
Image vision-board company Pinterest reported strong earnings this quarter, with the firm’s CEO attributing wins to using AI to build better user experiences. On an earnings call, Bill Ready, the firm’s CEO said: “Our ability to leverage AI to personalise our users’ experience is a key differentiator and has enabled us to find our best product market fit in years. The ability for users to explore their interests visually and take action on them is one of our core differentiators and an important reason why users come to our platform in the first place,” he added. “This is especially relevant for Gen Z, our largest and fastest growing user cohort, who have been raised on an internet of visual content across images and video and who find utility in the ability to search visually.”
OpenAI Remains Non-Profit
OpenAI announced on Monday that it will remain non-profit, despite initial plans to convert into a for-profit company. Critics raised concerns about the change to for-profit compromising OpenAI’s ethical principles. However, The company hopes the switch will better allow them to increase revenue and keep up in the AI race. In a letter shared on OpenAI’s website, CEO Sam Altman explained that the company is veering toward a capital structure in which there is more possibility for profit. He referenced a “big” stake in OpenAI’s business arm, which has not yet been determined.
Google Releases CTV Ad Updates with AI Assistance
Google upgraded its CTV ad targeting AI tools to include improved AI-powered insights. Its tools like’Commitment Optimiser’ and ‘Audience Persona’ help brands and publishers create and improve campaigns, utilising Google’s AI systems. Google is also expanding its partnership with providers like Netflix and NBCUniversal, and campaigns can be run through digital platforms like Spotify and Roblox. Google AI is integrated within Display & Video 360, Google’s marketing platform.
IBM Launches Agentic AI Tools
Technology company IBM released new tools which help enterprises build and deploy AI agents. Agentic AI is distinguished from Gen AI by their autonomous nature – their ability to complete tasks without user intervention. The technology is accessible through IBM’s WatsonX Orchestrate platform. The system’s capabilities include rapid building of agents, showing enterprises other agents for use, and finding agents for specialised domains such as sales. Along with agentic AI upgrades, IBM also introduced a tool which uses AI to extract insights from unstructured data.
ServiceNow Expects $1bn Revenue For AI Product
Software company ServiceNow predicts its AI product, NowAssist, will generate $1bn in revenue by next year. The company’s Chief Financial Officer announced the 2026 goal at an annual conference. She included that some customers have increased their spending by 60 percent by upgrading to use the AI tools. The NowAssist products are currently generating $250m in annual contract value for ServiceNow. ServiceNow provides AI agents for enterprises across industries, including IT and CRM. The company saw a 19 percent year-over-year growth in Q1.
Meta’s Q1 Report Shows AI-Success
Meta reported over $42 billion in revenue, a 16 percent year-over-year increase, in Q1 2025. Its results point to the success of its advertising and AI technology. Its AI-powered advertising tools, such as Advantage+, currently have over 4 million users, and ad impressions within Meta’s social media platforms grew by 5 percent. Meta AI has around 1 billion active users each month, which CEO Mark Zuckerberg predicts to increase during the year. The company allocated nearly $14 billion to AI infrastructure in Q1 and continues to gear its focus toward AI advancement.
Apple Shifts to AI Search
As Google’s antitrust trial drew to a close, Apple’s Senior VP of Services, Eddy Cue, said that tech giant is “actively” looking to revamp its search offering to include AI. Cue told the US court that the company’s own web browser Safari experienced its first dip last month because users are increasingly turning to AI tools for their search needs. Google’s ‘AI Overview’ feature, where search responses are summarised, has changed the nature of search browsers for users. Apple’s interest in AI search serves as a threat to Google as many IPhone customers currently use Chrome – the comment wiping $150 billion from Google’s market value.
StackAdapt Launches Email Marketing and Data Hub
StackAdapt announced this week it has launched an email marketing and data solution. The company’s email tool is fuelled by its Data Hub, which allows users to upload and segment first-party data. “Bringing email into the StackAdapt ecosystem gives our clients an entirely new way to activate their first-party data and close the loop between media and messaging,” said Vitaly Pecherskiy, Co-founder and CEO at StackAdapt. “As marketers face increasing pressure to do more with less, consolidating tools and proving performance is critical.”
Doubleword Raises £9m in Series A
UK-based AI start-up Doubleword, which focuses on helping companies self-host their own AI models, raised roughly £9 million in a Series A funding round. Leading the round was Dawn Capital, one of Europe’s biggest tech investors, that has previously funded tech firms Mimecast and iZettle. Other investors include Hugging Face CEO Clément Delangue and Dataiku CEO Florian Douetteau. The technology aims to solve AI inference – the process where AI models make predictions from unseen data. Meryem Arik, Co-founder and CEO of Doubleword, said: “Our customers want to build AI-powered applications – not AI infrastructure. We eliminate the heavy lifting of inference at scale so they can go from idea to production faster, without racking up technical debt.”
