🔮 Chinese autonomous vehicles; massive AI models; batteries; Serena Williams, Russia in Ukraine++ #362

Hi, I’m Azeem Azhar. I convene Exponential View to help you understand how our societies and political economy will change under the force of rapidly accelerating technologies.

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Today’s edition is supported by our knowledge partner, McKinsey & Company.

Tech trends for 2022. What technology trends are top of mind for business: metaverse, crypto, Web3, 5G? We asked leaders in industry, academia, and at McKinsey to share their perspectives on what’s likely to headline business agendas this year, trends that could—but shouldn’t—slip through the cracks, and what executives should think about when considering new technologies. Here’s what they told us.

🎙This week on the podcast

Technology is making agriculture more efficient and sustainable, but traditional farming still has its problems. This week I spoke with Daniele Modesto, CEO and co-founder of ZERO Farms – a startup dedicated to getting vertical farming right.

The near future

🇨🇳 Chinese autonomous vehicle ambitions
China is racing ahead with the autonomous vehicle future. McKinsey & Co reckons that 60% of journey-miles in China may be autonomous by 2040.

However, their industry may have an unhealthy dependency onAmerican chips. China currently has zero per cent market share for making sub-10nm chips (the most advanced types). As listeners of my podcast will know, I’m skeptical about the extent to which autonomous mobility will really take off given our alternatives. In China’s case, a cocktail of high-speed rail, metro transit and micromobility would make sense. And yet, the Chinese market is always special because it responds incredibly well to state guidance. Autonomous mobility is a key target in the 14th 5-Year plan, and a 2020 document setting out the national roadmap is targeting “the widespread operation of various connected vehicles with highly automated driving capabilities across vast areas of China” by 2035. Since the pandemic, Chinese authorities have put their foot on the soon-to-be-redundant accelerator pedal: 27 regions have regulations for autonomous vehicles, and more than 3,600km of road is available for testing.

🕹️ Good computer
Graphcore, a British chip maker, is rolling out a new ML-focused computer capable of 10 exaflops (10^18 calculations per second, about seven million times faster than an iPhone 13). The computer comprises several thousand processing units, packaged with 4Pb of RAM and exceptional memory bandwidth. Some interesting technical details are available here. The computer should be able to handle neural networks with 500 trillion parameters, hence “brain scale” is the term being thrown about by analysts. The largest neural net I know of is the Alibaba M6, a multimodal language model, which weighs in at 10 trillion parameters, about fifty times larger than GPT-3. I would expect future neural networks to continue to get larger and larger because it is an approach that has proven to work. These huge models generalise well and work across different domains, often with immediate industrial application. For example, GPT-3 is now used as a smart software programming autocomplete tool in Microsoft’s CoPilot product.

Graphcore is a sober-minded firm and it feels unlikely that they would put a system capable of 500-trillion parameter models on their 2024 roadmap if there wasn’t already burgeoning demand for it. (By the way, I don’t like the phrase “brain scale” because it is making claims that the science can’t back.)

🔋 Used batteries
All this demand for electric vehicles (and, of course, grid storage) has been pushing interest in battery technologies. Battery-based startups had a banner funding year in 2021.

However, the breakthroughs have struggled to materialize, argues Christopher Mims. Instead, the industry is seeing compounding improvements of 7-8% per year. Mims is one of the best journalists covering tech anywhere, so I recommend reading his stuff. For a detailed discussion on what is really going on in the lithium market, I commend Steve Levine in conversation with Jim Lowry.

Sunday commentary: When the pieces land

The institutional volte-face by the European Union has proven that in times of real crisis even the most slow-moving can move quickly. Germany’s shift, reversing decades of deeply held beliefs about the nation’s role, has been even more remarkable. Olaf Scholz addressed each of the criticisms I levelled at Germany in the Sunday newsletter in one blistering speech. I’d like to take credit for Germany ending its reliance on Russian gas, speeding up a move to renewables and increasing its defence spending to build its resilience. Given when the newsletter was sent and when he made his speech, I think it unlikely 😉.

I want to connect the dots between geopolitical confrontation and some underlying themes of the Exponential Age. Like many crises, this war will accelerate and accentuate some of those trends. Here are six quick thoughts:

  1. Massive push for new energy

One might believe that Russian gas will find new outlets. Pakistan just ordered a whole lot of the stuff from Russia. But for any country with net-zero targets and wishing to remain aligned with the West (or at least not strongly aligned to Russia), it isn’t clear how appealing that supply will be.

As commodities journalist Javier Blas pointed out on Wednesday, Russia was unable to shift – at any price – a load of Siberian gas.

Any nation considering real energy security in the light of these events needs to figure out how to lower its dependence on gas. The Dutch renewable energy association released a plan on how to reduce Dutch dependence on gas by as much as 13% in just one year. The plan is in Dutch, so I’ve had to rely on the comments of Kees van der Leun, a renewable energy expert I have tracked for several years.

They may extend the life of existing nuclear power stations by investing in the new generation of smaller and safer nuclear plants. That isn’t a panacea, of course, because Kazakhstan represents something in the order of 40% of uranium exports today.

Become a member to read the rest of the Sunday commentary.

Dept of our climate future

In every Sunday edition, we track key metrics that tell us a little about our shared climate future. We’re experimenting with different formats, so they may vary from one week to the next.

We have invited EV member Marshall Kirkpatrick to curate stories about our climate future in this section every week: “While the whole world watches war emerge in a resource-rich region, organisations around the world are working with exponential urgency to accelerate transformation toward sustainability and peace. May this week’s highlighted stories serve as tangible examples of a new world emerging, as essential sources of light at a dark and frightening time.”

Big, big winds: The U.S. Bureau of Ocean Energy Management announced after just the first day of bidding that its latest auction of offshore wind leases already broke the record by nearly 4X to become the largest wind auction in US history.  Bidding for 6 leases, with capacity to produce power for an estimated 2 million homes, stood at $1.54 billion at the end of the first day. The previous record of $405 million was set in 2018. The final winning bids of the sale, called the New York Bight areas, totalled an amazing $4.37B (that’s billion with a B!) In contrast, a sale of drilling rights in the Gulf of Mexico late last year attracted only $191.7 million in high bids. “This is excellent news,” said the conservation think tank Center for Western Priorities. “Proof that the wind industry is profitable and will also bring in more federal revenues than oil and gas.”

European manifesto: 7 large organisations released a collaborative statement last week titled Renewable Heat For All – Manifesto. The manifesto begins with these words:

As fossil gas prices have soared, millions have been left at even greater risk of energy poverty. It has never been clearer that we need renewable, affordable energy for all. The global energy prices crisis has exposed just how vulnerable Europe is to volatile international gas markets, given our dependence on imports for 90% of its fossil gas. At the same time, Europe is facing a climate crisis: now is the time to accelerate the energy transition across our society.

The participating organisations included Greenpeace, Friends of the Earth Europe, Bankwatch, Global Witness, the standards organisation ECOS, and the European Environmental Bureau (Europe's largest network of environmental NGOs).

Going further, together: If you’re connected to a large energy consumer like a corporation or municipal government, and you want to power-up the organisation’s shift to renewable energy, check out the World Resources Institute’s new working paper The Power of Collaboration: How U.S. Cities and Corporations Can Work Together to Advance Renewable Energy. This is based on a literature review and interviews with leaders from 20 corporations and governments collaborating together to tackle the challenges of renewable energy procurement. This inspiring document contains case studies, best practices, and cautionary notes that would prove useful for anyone trying to change anything at scale. Two weeks ago we wrote about the 24% annual growth of global corporate procurement of renewable energy and the release of documentation of best practices for electrification by the world’s largest public utility. WRI’s new report helps bring corporate and government action together and is a great contribution to the foundational knowledge needed for accelerated transformation.

Short morsels to appear smart while downing iodine tablets

🎾 Serena Williams announces a $111m venture fund

🔎 Fantastic long read on Cathie Wood, the investor who bet big on innovation in the public markets. I spoke with Cathie on the podcast in 2019, and you can listen back to our conversation here.

💰 Consumer spending on mobile non-gaming subscriptions jumped 41% to $18.3bn last year.

🧐 On Twitter’s attempt to reinvent itself as an open decentralised platform.

Ford intends to run its electric vehicle unit independently of its ICE business –  they’ll increase spending on electrification by $20bn to $50bn over the next four years in an attempt to catch Tesla. Listen back to my conversation with Ford’s Hau Thai Tang.

📻 As Russia slides into totalitarianism, it is banning Western media left and right. The BBC was the latest: booted off the Internet. The corporation has moved to an old-fashioned solution: shortwave radio.

⛔ A 3D video clip of the 40 mile convoy of Russian war materiel stuck oustide Kyiv. See also, accounting for equipment losses by the combatants in Russia’s unprovoked invasion of Ukraine.

End note

Hi everyone,

It is another strange week dominated by Putin’s invasion of the Ukraine. I wish you all the best.

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