Hi, I’m Azeem Azhar. I’m exploring how our societies and political economy will change under the force of rapidly accelerating technologies and other trends. If you like this email, please hit the heart at the top of this message!

📅 Save the date! We have two State of the Exponential members-only briefings coming up in December:

• On Dec 5, Penny Mealy, a Research Associate at the Institute for New Economic Thinking at the University of Oxford Martin School, will join us to discuss the intersection of complexity economics and job transitions.

• On Dec 10, Kyle Samani, the Managing Parent at crypto-native investment firm Multicoin Capital will join us to discuss investing in blockchain. Kyle raised a $75 million fund from investors including Andreessen Horowitz, to invest in cryptocurrency projects.

• Read more about Kyle and Penny, and REGISTER HERE
  

📚 Author’s circle: Our friends at the MIT Press want to share copies of Dr. Ramesh Shrinivasan’s great new book Beyond the Valley with EV members. The book explores how to bridge the gap between the users and designers, the tech elites and the rest, by thinking outside the Silicon Valley box. If you’re an annual member of EV, located in the US or Europe, and would like to receive this book, fill out the form here. The number of copies is limited, offered on first-come-first-serve basis.

If you’re not a member, you can get a monthly or annual membership below.

Dept of the near future

🌀 ‘It is because social systems are so complex that we need mathematical models,’ argues biologist, Peter Turchin. A long read in The Guardian delves into Turchin’s belief in the predictive power of historical data, and what it would mean for historians to embrace complexity science in the way that biologists did more than fifty years ago. (Also The Santa Fe Institute held a symposium on New Complexity Economics. ‘[T]he exponentiation of data and computer power, progress in algorithms, statistical physics, adaptive dynamics, and in neural, behavioral and cognitive science, suggests that a new complexity revolution is on the horizon,’ David Krakauer, president of the Institute, wrote in announcing the meeting, which included talks from EV reader, Eric Beinhocker, on pseudoscience vs. reality and economics as an evolutionary process.)

🧫 The coming age of generative biology. Reductionism has proved inadequate at understanding biology, but machine learning might help identify some generalizable principles, argue Molly Gibson and Andrew Beam. (See also Zavain Dar’s guest edition of EV where he introduced ‘new radical empiricism’. Also, if you want to dig deeper, this podcast with Sir Gregory Winter who created the class of drugs known as monoclonal antibodies is rather good.)

📻 Entertainment companies are pouring billions into creating more television than ever before in hopes of luring customers into signing up for their streaming services. The number of TV shows made in the US has grown by 129 percent in the past eight years, but it’s not clear whether this enormous investment will be worth it: ‘This isn’t a gold rush, it’s an arms race. We don’t know if there is any pot of gold. Once the music stops, there will be carnage. It might take three to five years, but there has to come to a point when we come to our senses.’ After all, there are only so many hours in the day for humans to watch TV shows. This week, Disney launched a $7-a-month streaming service, garnering 10 million subscribers in 24 hours. Apple plans a Prime-like subscription bundle wrapping TV, News and Music in one, although its premium News+ service appears to have stalled.

🇪🇺 Angela Merkel is calling for European ‘digital sovereignty’. The German Chancellor wants the EU to claw back its citizens’ data from US tech companies and develop its own platform to manage data. EU officials have become some of Silicon Valley’s most formidable opponents in recent years, in particular, the inimitable competition and digital policy chief Margrethe Vestager, amidst a growing concern in Europe about the power of the tech giants. Last week, President Macron gave a remarkable interview in The Economist where he presented a realist view of technological sovereignty: ‘In my opinion some elements must only be European.’ This idea of technological sovereignty is gaining meaningful currency. There are only three rule-makers in this game: China, the US, and the EU. Everyone else (including the post-Brexit UK) will need to align with one of those blocs or find an alternative strategy.

💯 Zadie Smith on fighting the algorithm: ‘The key with the unfreedom of the algorithm is that it knows everything and it feeds back everything. So, you can no longer have this bit of humanity which is absolutely necessary — privacy: the sacred space in which you do not know what the other thinks of you.’

🎧⭐ Researcher and author on the future of work, Laetitia Vitaud, joins me in this week’s podcast conversation. We discuss the reinvention of craftsmanship in the digital era, how it’s fueling the new safety bundle, and why the robot paradox is ailing today’s conversations on job automation.

Climate catastrophe: 410.43ppm | 3,841 days

Each week, we’re going to remind you of the CO2 levels in the atmosphere and the number of days until reaching the 450ppm threshold. 

The latest measurement (as of November 13): 410.43ppm; November, 2017: 405.14ppm; 25 years ago: 360ppm; 250 years ago, est: 250ppm. Share this reminder with your community by forwarding this email or tweeting this.

There are ‘profound shifts’ underway in the energy system, says the IEA. Read Simon Evans’ excellent analysis.

As I’ve written previously, the IEA has consistently underestimated the speed of global solar capacity. I genuinely wondered where the blind spot in their forecasting is. They have been consistently wrong for a dozen years. The trouble with these bearish estimates is that it will depress investment levels in solar, while making fossil fuels relatively more attractive than they otherwise would have been. It’s very bad form. 

🇸🇪👏 Sweden’s central bank has sold off some Australian and Canadian bonds in compliance with a new policy of not investing in assets from issuers with large carbon footprints. Bonds from the coal and oil mining states of Western Australia, Queensland and Alberta were dumped under the new policy.

Dept of huge tech firms

Tech firms continue to leverage their huge audiences to enter new markets. The economic rationale is clear. Huge distribution makes customer acquisition more straightforward. Healthcare and financial services are particularly attractive. They are large parts of our economies, fundamentally driven by data, and dominated by clunky old-economy dinosaurs. 

The Wall Street Journal exposed how Google’s secret Project Nightingale has been collecting and analysing the health data of millions of people. Google signed an agreement with a healthcare chain to use their patient data to train machine learning models for individualised healthcare. Neither patients nor doctors were aware their data was being used by Google.

Google is also looking to hoover up financial data. Project Cache will offer checking accounts to customers in partnership with CitiGroup and a Stanford University credit union. Google says it hasn’t decided whether to charge fees on the accounts, a comment which suggests the value of this product lies in data collection, not the product itself. 

Elsewhere:
Google isn’t just collecting data from healthcare providers, it and other advertisers are also gathering data directly from users themselves. An FT investigation found that 79 percent of health websites were collecting data on users, of which 78 percent were sending data to Google’s advertising subsidiary DoubleClick. Amazon, Facebook and Microsoft were also among the companies collecting user data on health websites.

⛔ Facebook has shut down 5.4 billion fake accounts so far this year, an increase of 64 percent in 2018. Suggests the account creation process might be broken.

OECD economists point out ‘superstar firms are running away with the global economy’. These firms are more ‘innovative, productive and profitable than everyone else’ with serious consequences for the economy and long-term competition. (As an example, Apple’s iPad alone has higher sales than two-thirds of the Fortune 500.)

Apple is banking on a 2022 release for its AR headset, with a more chic pair of AR glasses to follow by 2023.

Alibaba’s Singles Day sales racked up more than $38.3 billion in purchases from over half a billion shoppers around the world. Alibaba brought in starpower from celebrities like Taylor Swift and Kim Kardashian to help flog 26 percent more purchases than in 2018. Livestreaming played a key role in the success of Singles Day, turning the online buying spree into an interactive event. More than a million people shopped using smart speakers. 

Dept of AI

The environmental costs of AI are growing at a phenomenal rate. Even though deep learning is inspired by efficient 20W human brains, it is thousands of times more demanding of energy. Researchers are arguing that energy efficiency should be an evaluation criterion for research. Very accessible paper with some eye-opening data points on the growth in complexity of modern deep learning models.

🤔 There are practical steps which can be taken to reduce the wastefulness of deep learning. Co-founder and CTO of Fritz Labs Jameson Toole lays out a few ideas including using native formats and frameworks, leveraging available accelerators like GPUs or DSPs by using supported operations only, monitoring performance across devices, identifying model bottlenecks, and iterating architectures for specific hardware. 

Microsoft is making a bet on UK company Graphcore, which claims that its new chips can dramatically speed up processing times, while being more energy efficient. Meanwhile, Facebook and Baidu are putting their money on Intel, which has just unveiled its first-generation Neural Network Processors. The devices are Intel’s challenge to AI hardware market leader Nvidia.

Chip start-up, Groq, announced its new AI chip which is the first chip to achieve one quadrillion operations per second, and up to 250 trillion FLOPS. 

AI trained on historical data soaks up historical biases. The latest example to make headlines is BERT, Google’s natural language prediction algorithm which is now being rolled out across some Google services including search. Although algorithmic bias is obviously concerning, in some respects the conversation around it is a very positive step—AI is forcing us to finally pay attention to biases which have been entrenched for decades.

Chart of the week (beta)

It is incredible to see the continued decline in the price of lithium-ion batteries. This is a key driver behind the growth of electric vehicles.

Based on the falling battery prices, Bloomberg is predicting price parity between EVs and internal combustion vehicles by mid-2020s in most segments.

Do you like the chart of the week? Please hit the heart on top of the email or share this post.

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Short morsels to appear smart at dinner parties

🗡️ Jonathan Schulz of George Mason University and his colleagues think that medieval church policies towards marriage and kinship help to explain psychology in Western, Educated, Industrialized, Rich, and Democratic (WEIRD) societies in modern times. In particular, they suggest it may account for psychological differences such as individuality, non-conformity and pro-social behaviours. (Full paper here.)

All of Magic Leap’s patents appear to have been quietly assigned to JP Morgan months ago. This may suggest that Magic Leap have had to put their intellectual property up as collateral for a loan.

💡 Failing 15 percent of the time is the ‘Goldilocks zone’ for learning.

🐝 Bees are capable of social learning, but the most exciting revelation of this research is fact that they can play football!

Mathematician Dan Rockmore thinks the best ideas happen when we’re not paying attention. The eureka moments are the ones which we tend to focus on, but behind that moment is usually hours and weeks and months of percolation somewhere in the deep recesses of our brain. Great ideas need time and space to grow.  

Despite the spiralling US-China trade war, the US remains China’s top international academic research partner according to the Nature Index. 

🛑 AI that can learn to evade and circumvent the censorship in India, China and Kazakhstan is being tested right now.

🚗 Most car buyers are over 55, compared to a decade ago when a majority were aged 34-55. Meanwhile, global light vehicle sales have fallen 3.8 percent year on year as of October. 

End note

This issue of technological sovereignty is sufficiently fascinating that I’ve set-up a Google Alert for it!

The end of the Washington consensus is not just about technology. But the nature of current technologies and international competition over them deepens the process of decoupling. 

Technological interdependence is a challenging idea in these times. It is one thing to import a commodity for military use. (During the height of the Reagan-Brezhnev Cold War the US imported meaningful quantities of titanium and platinum from the Soviet Union.) It is another to expose your infrastructure to the kind of backdoor vulnerabilities that we know exist in all complex technologies.

But it is more than that. It will also extend to fundamental rights and values which will be instantiated within the tech infrastructure; just look at the differences between American, Chinese and European approaches to privacy and data. 

One positive signal is that the scientists are still collaborating! 

Have a great week!
Azeem

What you’re up to—notes from EV readers

EV’s Marija Gavrilov is in Lisbon for the next few months. If you’re there, or know someone interesting she should meet, let her know marija@exponentialview.co

Kevin Werbach: China is Pushing Toward Global Blockchain Dominance. Read here the reflections Kevin shared with EV following his recent trip to China.

Damian Vukotic has put together the ‘Lovely Progressives’ playlist which I've enjoyed as background music for pulling together the past few issues of this wondermissive. 

Congrats to several readers recognized among the Top 100 BAME leaders.

Eliot Peper: Government Is a Technology, So Fix It Like One.

Irene Omaswa invites UK’s purpose-driven tech entrepreneurs who want to build their AI capacity to join Social Tech Trust & Microsoft’s AI for Good programme by 22nd November.

Richard Nortons’ team releases the first gin created by AI.

Chris Michaels invites you to visit two fascinating exhibits at the National Gallery in London: first, Leonardo: Experience a Masterpiece, the first digital immersive exhibition from a major UK museum; second, National Gallery X: a studio for creative R+D rethinking how the exponential technologies will reshape the art, artists and musuems of tomorrow. 

Lejjy Gafour’s company Future Fields recently jointly created Cellular Agriculture Canada with other cellular agriculture/alternative protein companies and are looking for collaboration opportunities world wide. 

Emmanuel Omoruyi shares his blog about his latest reads.

A couple of EV readers have their books out: Michael S. Falk published Get to Work… On Our Future; Nick Ducoff published Better Off After College, to help families make all the right money moves so that college pays off.

Benjamin Lampe published an op-ed on diversity in Financial Times.

To share your news or projects with the EV community, email marija@exponentialview.co. Please no PR.

Hi, I’m Azeem Azhar. I’m exploring how our societies and political economy will change under the force of rapidly accelerating technologies and other trends.

💫 📅 If you’re a bodacious EV premium member, take a note of the upcoming State of the Exponential briefing with Aldyen Donnelly, Director of Carbon Economics at Nori, the world’s first carbon removal marketplace. In this briefing, hosted by EV’s Senior Advisor, Diana Fox Carney, Aldyen will showcase how her company brings together agriculture, carbon removal and blockchain technology, creating a marketplace through which anyone can pay to remove excess carbon from the atmosphere. Read more here and RSVP to attend.

Like what I write? Please hit the heart ❤️ button above.

Azeem

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Dept of the near future

🌿 One of the major factors shaping the deep tech trends of 2019 is the falling cost of DNA sequencing, which opens a treasure trove of opportunities for biotech and medical tech startups. One of those opportunities is the so-called ‘Book of Life’, the genetic sequences of all complex species on the planet and the relationships between them. So far, 0.28 percent has been decoded but the Earth BioGenome Project is setting out to change that, according to EV reader Juan Carlos Castilla Rubio.

🎯 DeepMind had a breakthrough. Its AlphaStar reached the top 0.15 percent of Europe’s 90,000 StarCraft II players. The game is strategically complex and played at breakneck pace, with 300 actions per minute. The first time AlphaStar beat two professional players in 2018, DeepMind was criticized for pitting a superfast computer against mere mortals; this time, the engineers ‘restricted the AI’s reflexes’. (Separately, a neural net has solved in the three-body problem 100m times faster than previously possible. Trisolaris here we come!)

🧠 We don’t really understand what ‘understanding’ means, not even in humans. Decoding what it would mean for a machine to truly understand a concept is even more complicated. The same goes for common sense. I discuss this in the latest podcast conversation with neuroscientist and AI entrepreneur Gary Marcus, whom most of you know as a deep learning contrarian.

🤔 Evan Selinger’s review of an AI anthology asks why technologists fail to think of moderation as a virtue? ‘Markets will have an oversized influence on which AI-infused products and services get developed, how they’ll enter and exit our lives, and who we’ll become as their influence impacts how we think, play, work, and govern.’

🇨🇳 China’s investment in AI is focused on three broad areas: international competition, strategic growth and social governance, according to an analysis of Chinese AI policy and regulation. Good read.

💨 Climate breakdown: 409ppm | 3,855 days

Each week, we’re going to remind you of the CO2 levels in the atmosphere and the number of days until reaching the 450ppm threshold. 

The latest measurement (as of October 29): 409ppm; October 31, 2018: 406.32 ppm; 25 years ago: 360ppm; 250 years ago, est: 250ppm. Share this reminder with your community by forwarding this email or tweeting this.

Dept of innovation

How should we manage our innovation? In a field like medicine, we’ve established a rigorous and scientifically-validated approach to testing and approving drugs, based on clinical trials and randomised controlled tests. In the finance and insurance industries, new entrants must comply with strict rules that protect the consumer. Capital adequacy and anti-money laundering requirements ensure the integrity of the financial system, supposedly.  

The tech industry has had no such framework. It has enjoyed ‘permissionless innovation’ since the advent of the Internet fifty years ago, this week. The open platform enabled entrepreneurs to try new things without getting permission from regulators or, indeed, anyone else.

This is why we got streaming audio in the mid-nineties, while the traditional broadcast industry remained heavily regulated. And why we’ve had a flourishing ecology of remarkably large products like Skype or Wikipedia, alongside weird, wonderful niche products.

The permissionless approach served us well. Can you imagine getting a search engine as good as Google, if it had to be approved by even the most forward-thinking of regulators? If newspaper lobbyists had had their way, would blogging have ever existed, let alone flourished? But, permissionless innovation also enabled other anti-delights, such as the unpleasant Usenet newsgroups, Chatroulette and 4Chan.

An alternative approach, that sits between permissionless innovation and full-on regulation, is the precautionary principle (or PP). Since it emerged in the 1980s, PP has encouraged cautious action if there might be a threat of serious damage, particularly environmental damage—even if we don’t have robust scientific evidence for it. This approach could work in scenarios where this is a chance we might blow the whole place up. 

But in general, I’m quite uncomfortable with the precautionary principle because it is so woolly. It eschews accepted norms of scientific evidence in favour of looser interpretations of what harm might be created. To that extent, it can be subjective and open to lobby and the ill-informed excesses of public opinion. 

A few recent incidents, remind us that public opinion is often not a great guide to complicated technical problems, especially where there are systemic effects.

• Be Cautious with the Precautionary Principle: Evidence from Fukushima Daiichi Nuclear Accident by Neidell et al, makes the case that more people died from the increase in electricity prices after Japan’s Fukushima nuclear reactor was put offline than from the incident at the power plant itself. (Summary of the paper by the Mercatus Center, a research group that is ideologically critical of regulation in general.) When the accident occurred, the Japanese government turned off nuclear power stations because of public fears, resulting in a 20-30 percent spike in electricity prices. Consumers responded by cutting their heating during winter. The authors estimate that 4,500 people died as a result. The disaster has directly accounted at least 1,500 deaths, mostly from the resultant evacuation. Only one death has been attributed to radiation. (The bigger problem with the public response to nuclear power is that it attenuated our decarbonisation progress. 

• The delays in introducing genetically modified ‘golden rice’ may have resulted in up to 2,000 child deaths per day in the developing world, as well as consigning millions of kids to blindness. 

Permissionless innovation (PI), and its weird step-siblings, industry self-regulation and industries cosied up to regulators, are no panacea either.

PI has been superb, brilliant, tinkertastic. The “don’t ask permission culture” lead to so many things we might not have created in the early days of the internet. I know first-hand how hard incumbent telecoms and publishing industries fought for worse than what the internet gave us.

Loosely coupled dumb networks which put intelligence on the edge, aka the internet, allowed for innovation on that edge. In the 1990s, the phone companies hated it. Their power arose for centrally-controlled circuit switching. If they had had their way, the internet protocol would have played second-fiddle to proprietary virtual circuits based on ATM or SDH. And, if they had succeeded, we would never have seen Geocities, Viaweb, Skype, Yahoo, eBay, Instagram, Amazon and, most digital services you use daily. (Admission: I was an aficionado of telecoms protocols in the early nineties.) 

But this week, we mark fifty years since delivery of the first message across the proto-Internet, the ARPAnet. The Internet has been mainstream in most markets for more than two decades. And the entire environment within which technology innovation occurs is vastly different to twenty-five years ago:

• The domains of operation are too important. Information access or self-publishing, the products of the mid-90s, are valuable but ultimately niche. But today’s technology innovators are tinkering with insurance, financial services, healthcare, even our DNA. 

• The tech industry today is simply too big and has tremendous access to capital. Entrepreneurs know how to ‘blitzscale’, that is, grow their companies globally very quickly. Capital markets are willing to support them however barefooted and Adam-Neumannish they are. (Listen to my discussion with Reid Hoffman on blitzscaling.) The biggest firms, Alphabet, Facebook, Amazon, Tencent and Baidu, are sovereign-state in scale. This actual or potential leviathanhood demands we ask them for more prudence.

• There are emergent effects from many of these innovations which, in a permissionless environment, are borne collectively by society or simply weigh on the vulnerable. For example, Uber and Lyft have increased congestion in cities while reducing driver wages. These firms’ founders and earliest investors make out like bandits.

• Our societies are incredibly interconnected. A decade ago, the global financial crisis took a bunch of mortgage defaults by sub-prime-rated American homeowners in and magnified them into the worst financial crisis in history. This crisis brought General Motors to within hours of bankruptcy, and debilitated factories around the world.
  From a sketchily-approved mortgage in Nevada to whacking industrial supply chains, meant those novel financial instruments travelled across the nervous system of the shadow banking sector, eviscerating Lehman Brothers and bringing America’s Bear Stearns, the UK’s HBOS and Germany’s Dresdner, amongst others, to their knees, in the process.

• The financial technologies of synthetic debt instruments emerged, admittedly in a regulated environment—the story is complex—but reminds me of the permissionless approach so common in the tech industry. (In another former life, I happened to hold short positions on the US housing market during 2007 and 2008, and have some personal experience of that crisis.)

So what should the goldilocks zone of regulation look like? How can we support fevered exploration while managing risks, especially systemic, run-away or existential ones?

I’ll turn to some possible solutions in a future issue of EV. Stay tuned :)

Short morsels to appear smart at dinner parties

🛡️ A company in Canada has made an ‘invisibility shield’. Anticipating the inevitable Harry Potter jokes, they’ve named it the ‘Broadband Invisibility Cloak’.

👎 Your AirPods will play music for a couple of years. They’ll pollute the Earth for a few millennia. (In other Apple news, iOS 13 has introduced third-party sign-ins for other apps. It has some nice privacy features.)

Societies change their mind faster than people do.

🥓 The US has its biggest pile of uneaten bacon for 48 years, over 18,000 metric tons. Bacon comes for pigs, highly intelligent, social animals.

🏁 Zoox’s self-driving car is a pretty smooth ride, apparently.

Polyamory is on the rise, but are we not taking it seriously enough?

🌐 All the domains Jeff Bezos registered in 1994, and why cadabra.com didn’t work. 

The story of Hilda Geiringer: the first female professor in applied maths in Germany, and a global pioneer in materials science.

The government of Taiwan has built its own social network with the reported goal to create a process which crosses political divides to develop new policies.

End note

I had a fascinating lunch with a Silicon Valley investor earlier this week. He was pretty excoriating about the direction the large US tech companies, in particular, Facebook, are taking. King Zuck, surrounded by well-trained courtiers, seems to see no limits to his power. 

My lunch brought to mind Aaron Sorkin’s letter to Mark Zuckerberg in The New York Times. Sorkin doesn’t hold back.

As we ate, Alphabet confirmed it was acquiring FitBit, the fitness tracking company. Not content with accessing our search habits, transit patterns, personal email, photos, in-home conversations and viewing preferences, Google is now running hell-for-leather for our physical data and key biomarkers. It is an unpleasant development.

The Internet turned fifty this week. It really is having a mid-life crisis

Best,
Azeem

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What you are up to—notes from EV readers

Ryan Welsh: Explainable AI isn’t just about explanations.

Richard Dent and his colleagues from all over the UK urge universities to act swiftly and independently on climate change in an open letter.

Matt Lang writes about how growing up with voice assistants will shape the childhood.

Stephan Somogyi has a new job as the Product Lead for Android platform security.

Rowland Manthorpe is investigating how tech is used and misused throughout this British election campaign—if there's anything you think he should be looking at, send a message to rowland.manthorpe@sky.uk.

John Battelle launched The Recount, a new politics-focused media outlet.

Gideon Lichfield is looking for a Senior AI reporter at the MIT Tech Review.

Please share your projects and news updates with marija@exponentialview.co