IBM announced earlier this week it would stop developing a software focused on facial recognition and analysis, which was designed to be sold to governments.
This comes in a time where tech giants have started expressing their political opinions, from Facebook supporting Trump’s RNC to Twitter fact checking Donald Trump’s tweets.
As it turns out, each public decision has shown significant repercussions on their stocks.
IBM wants to protect Americans’ privacy
What was supposed to be a big contract for IBM turned out to be a bust, but also a blessing in disguise. “IBM CEO Arvind Krishna said in a letter to Congress that the company will also no longer develop or research the technology”, read the Verge.
In this long feature, analysts explain that IBM’s first and foremost goal was to prevent the U.S. government from identifying citizens and protecting their private life.
On the day of the announcement, on 8 June, IBM shares jumped from $133.23 to $135.83.
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Shareholders are now politically involved
Facial recognition has been under scrutiny for years since it has shown racial bias and within the “Black Lives Matter” movement context, IBM could not help but put a hold on the project.
USA Today said that 2020 “distills a century of horrors in a year” within the country.
From being the hardest hit country by COVID-19, reaching more than 2 million cases to nationwide demonstrations condemning the American police brutality, companies have been pressured to take a side on the situation.
Needless to say this happens in the context of the most controversial presidential race ever in the country, between the current President, Donald Trump and former Barack Obama’s Vice-President Joe Biden.
Other tech giants are following
All things considered, tech giants have decided to take a stance and follow IBM’s lead.
— jack⚡️ (@jack) June 9, 2020
Twitter and Square have announced they will give their employees a holiday on June 19th, the day of remembrance of the end of slavery in the United States.
Right after this announcement, Twitter shares rose from $35 to $36. However, many opponents highlighted the fact that less than 6% of the company is part of the African American community.
Improving this number would be even better. pic.twitter.com/xuc39GTh0t
— Antonio French (@AntonioFrench) June 9, 2020
Square has also benefited from its decision, since its shares went from $90 to $92.72 within two days last week.
Last but not least, Amazon also confirmed that it will not sell facial recognition programs to the American police amid nationwide demonstrations.
Jeff Bezos’ company’s share increased from $2,500 last Monday to $2,618 last Friday.
It looks like the most promising shares of the year in the United States are the company who will follow privacy and equity values.
The above content is considered to be market commentary information and shall not be perceived as independent investment research or investment advice.