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Herman Narula, co-founder and CEO of Improbable, speaks during a session at the Web Summit in Lisbon.

Henrique Casinhas | Sopa Images | Lightrocket | Getty Images

Metaverse company Improbable has sold one of its key gaming ventures to London-listed video game developer Keywords Studios for £76.5 million ($97.1 million).

The company closed the deal to sell The Multiplayer Group (MPG), a multiplayer game services firm, to Keywords on Sunday, an Improbable spokesperson told CNBC.

Based in Ireland, Keywords owns more than 70 studios in locations including Los Angeles, France, Brazil, Mexico and Spain. The firm mainly develops games for third-party developers.

Keywords’ shares have fallen around 49% year-to-date. It has been on an acquisition spree lately, earmarking 91.9 million euros ($100 million) to new takeovers.

That led to a shift from a net cash position at the end of last year to a net debt position of €11.4 million as of June 30.

Keywords also reported earnings per share of 18.48 euro cents in its half-year results for the period to June 30, down 40% year over year.

Keywords said its acquisition of MPG was funded primarily through cash and its existing revolving credit facility, and would contribute double-digit revenue growth in 2024.

Keywords expects the transaction to be earnings per share accretive in its first full year post-acquisition.

MPG was founded in 2018 and is known for behind-the-scenes work on games such as Fallout 76 and Medal of Honor: Above and Beyond.

Herman Narula, Improbable’s co-founder and CEO, told CNBC the transaction was part of its “venture builder” strategy, through which it invests in or acquires gaming and metaverse-related teams with the option of expanding or spinning them off at a later point.

“The thought was, if we understand multiplayer well, and we understand metaverses, maybe we can spot opportunities where we can bring things in the den that we can do well with. And then, at the right time, if it makes sense, to either keep growing them or potentially spin them out,” Narula told CNBC in an exclusive interview.

“It became clear that working with MPG and bringing them in house would have let us learn a colossal amount and help them grow.”

Crypto enthusiasts want to remake the internet with 'Web3.' Here's what that means

Improbable acquired MPG in 2019, and it has grown dramatically since. Employee numbers rose sixfold in the past four years to 360.

And MPG’s valuation has more than doubled to £76.5 million from Improbable’s original purchase price of £30 million.

While the move suggests a potential scaling back of Improbable’s gaming-related investments, Narula disputed the idea that a sale of MPG marks any sort of retrenchment from that space.

“We’re not in any way selling any technology, or in any way ceasing to operate with games companies,” Narula said. “MPG provide a very specific, specialised service.”

A series of games built on Improbable’s original SpatialOS technology have been canceled in recent years.

They include the open-world game Nostos, developed by NetEase, Worlds Adrift, made by Bossa Studios, and the console version of Scavengers, a game developed by Midwinter Entertainment.

Midwinter was sold by Improbable earlier this year to Behaviour Interactive.

Morpheus, a technology platform developed by Improbable, is now the company’s primary product. Morpheus is designed to host mass-scale multiplayer online games.

Improbable has hosted new experiences using its Morpheus tech, including virtual Major League Baseball games, and the “Otherside” metaverse developed in partnership with blockchain firm Yuga Labs.

Trying to sell investors on ‘metaverse’

Founded in 2012, Improbable is a British firm that aims to build what it calls a network of metaverses. In June, Improbable launched MSquared, a metaverse creation suite, and granted developers access to the platform.

MSquared includes its own network, tech stack, and open-source metaverse markup language.

What's next for the 'Metaverse'?

The deal to sell MPG, one of Improbable’s many notable bets on gaming, arrives after a series of struggles at the firm.

Improbable has undergone substantial cost reductions.

The firm, which scored a $3.4 billion valuation in October 2022, laid off dozens of staffers late last year after raising substantial sums from SoftBank and Andreessen Horowitz.

But valuations of once buzzy metaverse and Web3-related startups have been knocked this year and last year by waning investor enthusiasm for the space.

Improbable has more recently touted itself as artificial intelligence-enabled, saying this has helped lower costs. The company slashed its losses by 85% in 2022 to £19 million.

‘Tale of two metaverses’

Improbable originally set out to build large-scale computer simulations that have applications in gaming and defense.

But its metaverse bets have now become its main focus.

Improbable sold its defense business to Noia Capital in September, marking an exit from a loss-making venture for the firm.

Narula says he expects to see a “tale of two metaverses” emerge next year. Centralized gaming experiences such as Roblox and Fortnite will be eschewed in favor of decentralized, “Web3” metaverses, Narula said.

Web3 refers to the idea of a more decentralized and open version of the web, outside the control of a handful of powerful tech companies like Amazon and Meta.

Blockchain is a key technology involved.

“Ultimately, they [Roblox and Fortnite] are games with different modes made by users and by brands. But people can’t build businesses that they have control over, or that can do commercial things that would be appropriate,” Narula said.

“The other branch of the metaverse, which is driven in some ways by Web3 and in other ways by companies like ours … is really about creating a network of sovereign metaverses.”

Analysts have expressed skepticism about the ability for Improbable to commercialize its technology, not least owing to the technical limitations and high costs involved.

“The jury is still out if they have a viable business model going forward, or whether the reality will ever match the ‘virtual’ hype,” Greg Martin, co-founder and managing director of Rainmaker Securities, a private market trading firm, told CNBC.

Narula said he is hoping to sign up many more partners for MSquared in the future.

Improbable, which is focusing on putting on large-scale metaverse events, ran 30 such gatherings in 2023, up from only three last year. The company plans to raise that number to 300 in 2024.

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Week in review: The Nasdaq’s worst week since April, three trades, and earnings

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Week in review: The Nasdaq's worst week since April, three trades, and earnings

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Too early to bet against AI trade, State Street suggests 

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Too early to bet against AI trade, State Street suggests 

Momentum and private assets: The trends driving ETFs to record inflows

State Street is reiterating its bullish stance on the artificial intelligence trade despite the Nasdaq’s worst week since April.

Chief Business Officer Anna Paglia said momentum stocks still have legs because investors are reluctant to step away from the growth story that’s driven gains all year.

“How would you not want to participate in the growth of AI technology? Everybody has been waiting for the cycle to change from growth to value. I don’t think it’s happening just yet because of the momentum,” Paglia told CNBC’s “ETF Edge” earlier this week. “I don’t think the rebalancing trade is going to happen until we see a signal from the market indicating a slowdown in these big trends.”

Paglia, who has spent 25 years in the exchange-traded funds industry, sees a higher likelihood that the space will cool off early next year.

“There will be much more focus about the diversification,” she said.

Her firm manages several ETFs with exposure to the technology sector, including the SPDR NYSE Technology ETF, which has gained 38% so far this year as of Friday’s close.

The fund, however, pulled back more than 4% over the past week as investors took profits in AI-linked names. The fund’s second top holding as of Friday’s close is Palantir Technologies, according to State Street’s website. Its stock tumbled more than 11% this week after the company’s earnings report on Monday.

Despite the decline, Paglia reaffirmed her bullish tech view in a statement to CNBC later in the week.

Meanwhile, Todd Rosenbluth suggests a rotation is already starting to grip the market. He points to a renewed appetite for health-care stocks.

“The Health Care Select Sector SPDR Fund… which has been out of favor for much of the year, started a return to favor in October,” the firm’s head of research said in the same interview. “Health care tends to be a more defensive sector, so we’re watching to see if people continue to gravitate towards that as a way of diversifying away from some of those sectors like technology.”

The Health Care Select Sector SPDR Fund, which has been underperforming technology sector this year, is up 5% since Oct. 1. It was also the second-best performing S&P 500 group this week.

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People with ADHD, autism, dyslexia say AI agents are helping them succeed at work

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People with ADHD, autism, dyslexia say AI agents are helping them succeed at work

Neurodiverse professionals may see unique benefits from artificial intelligence tools and agents, research suggests. With AI agent creation booming in 2025, people with conditions like ADHD, autism, dyslexia and more report a more level playing field in the workplace thanks to generative AI.

A recent study from the UK’s Department for Business and Trade found that neurodiverse workers were 25% more satisfied with AI assistants and were more likely to recommend the tool than neurotypical respondents.

“Standing up and walking around during a meeting means that I’m not taking notes, but now AI can come in and synthesize the entire meeting into a transcript and pick out the top-level themes,” said Tara DeZao, senior director of product marketing at enterprise low-code platform provider Pega. DeZao, who was diagnosed with ADHD as an adult, has combination-type ADHD, which includes both inattentive symptoms (time management and executive function issues) and hyperactive symptoms (increased movement).

“I’ve white-knuckled my way through the business world,” DeZao said. “But these tools help so much.”

AI tools in the workplace run the gamut and can have hyper-specific use cases, but solutions like note takers, schedule assistants and in-house communication support are common. Generative AI happens to be particularly adept at skills like communication, time management and executive functioning, creating a built-in benefit for neurodiverse workers who’ve previously had to find ways to fit in among a work culture not built with them in mind.

Because of the skills that neurodiverse individuals can bring to the workplace — hyperfocus, creativity, empathy and niche expertise, just to name a few — some research suggests that organizations prioritizing inclusivity in this space generate nearly one-fifth higher revenue.

AI ethics and neurodiverse workers

“Investing in ethical guardrails, like those that protect and aid neurodivergent workers, is not just the right thing to do,” said Kristi Boyd, an AI specialist with the SAS data ethics practice. “It’s a smart way to make good on your organization’s AI investments.”

Boyd referred to an SAS study which found that companies investing the most in AI governance and guardrails were 1.6 times more likely to see at least double ROI on their AI investments. But Boyd highlighted three risks that companies should be aware of when implementing AI tools with neurodiverse and other individuals in mind: competing needs, unconscious bias and inappropriate disclosure.

“Different neurodiverse conditions may have conflicting needs,” Boyd said. For example, while people with dyslexia may benefit from document readers, people with bipolar disorder or other mental health neurodivergences may benefit from AI-supported scheduling to make the most of productive periods. “By acknowledging these tensions upfront, organizations can create layered accommodations or offer choice-based frameworks that balance competing needs while promoting equity and inclusion,” she explained.

Regarding AI’s unconscious biases, algorithms can (and have been) unintentionally taught to associate neurodivergence with danger, disease or negativity, as outlined in Duke University research. And even today, neurodiversity can still be met with workplace discrimination, making it important for companies to provide safe ways to use these tools without having to unwillingly publicize any individual worker diagnosis.

‘Like somebody turned on the light’

As businesses take accountability for the impact of AI tools in the workplace, Boyd says it’s important to remember to include diverse voices at all stages, implement regular audits and establish safe ways for employees to anonymously report issues.

The work to make AI deployment more equitable, including for neurodivergent people, is just getting started. The nonprofit Humane Intelligence, which focuses on deploying AI for social good, released in early October its Bias Bounty Challenge, where participants can identify biases with the goal of building “more inclusive communication platforms — especially for users with cognitive differences, sensory sensitivities or alternative communication styles.”

For example, emotion AI (when AI identifies human emotions) can help people with difficulty identifying emotions make sense of their meeting partners on video conferencing platforms like Zoom. Still, this technology requires careful attention to bias by ensuring AI agents recognize diverse communication patterns fairly and accurately, rather than embedding harmful assumptions.

DeZao said her ADHD diagnosis felt like “somebody turned on the light in a very, very dark room.”

“One of the most difficult pieces of our hyper-connected, fast world is that we’re all expected to multitask. With my form of ADHD, it’s almost impossible to multitask,” she said.

DeZao says one of AI’s most helpful features is its ability to receive instructions and do its work while the human employee can remain focused on the task at hand. “If I’m working on something and then a new request comes in over Slack or Teams, it just completely knocks me off my thought process,” she said. “Being able to take that request and then outsource it real quick and have it worked on while I continue to work [on my original task] has been a godsend.”

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