Hi, I’m Azeem Azhar. I convene Exponential View to help us understand how our societies and political economy will change under the force of rapidly accelerating technologies.
The near future
🇨🇳 Chinopticon. Exported.
How bad is Chinese surveillance getting? The New York Times provides new details of efforts to capture video footage, voice print, DNA samples and biometrics across the country. There is currently one camera for every three Chinese citizens… It isn’t hard to imagine a world where that ratio is 10, or even, 100 to 1.
About 80 million Americans use TikTok and “everything is seen in China” according to a Buzzfeed investigation.
At a private event last week, a senior technology exec said it was a fair assumption that the Chinese authorities are recording everything said on the Internet, even if it is encrypted, for future use. (We might only be a decade or so from quantum computing capabilities that would decrypt traditional public key encryption on the Internet.)
That suggestion doesn’t seem too fanciful, as a few years ago we learnt that Western agencies could record up to three days of much of the world’s Internet traffic for analysis. The Chinese state’s willingness and capacity to do something like that could exceed those ambitions.
🧨 Cyberwar rejoined
In last week’s EV, I explored the industrial side of Russia’s war in Ukraine. Now Microsoft outlines just how febrile cyber activity has been: 128 targets in 42 countries outside of Ukraine, and 15 attacks in Ukraine.
In a war of attrition, Russia has the upperhand. They have huge territory, industrial capacity and a disregard for the loss of human life on either side. For Ukraine to prevail, a broad coalition will need to be willing to support it – and this is where the softer aspects of the war, information operations and cyber, play a role.
See also, Russia is being accused of orchestrating a “massive disinformation campaign” blaming Ukraine and the West for the global food crisis.
⛰️ Going vertical
Whether firms should be vertically or horizontallty integrated is rather cyclical, like the embeardedness of men or, more realistically, like hemline lengths. My old boss, CK Prahalad, coined the notion of the core competence of the corporation 30 years ago. This kicked off a strong shift towards horizontal rather than vertical firms, ones which contracted out anything that wasn’t core to their business.
But the best technology firms (ergo, the best firms in the world) are increasingly vertically integrated. Apple is one of the best examples. Its consumer-grade silicon is 2-3 years ahead of anything else in the market - even better than firms for whom making processors is their core competence.
In the automotive industry, Tesla is “absurdly integrated”, making its own batteries and chips and sourcing its own raw materials, as Henry Ford did back in the day. Other car firms are trying to follow suit, as explained in this excellent survey. To note: car bosses are rather plodding in their ambition to bring capabilities in-house, perhaps something they should reconsider. (If you run an automaker, happy to help!)
In these moments of disorder, I expect to see the degree of vertical integration to increase. Managers will emphasise control and innovation over efficiency and parsimony.
Sunday commentary: The metaverse isn’t, in general, magic
I’m asked about the metaverse a great deal. It is one of the hot technology topics du jour. I’ve spoken to dozens of people involved in the metaverse, and some of these conversations have made it to the podcast, including with Nick Clegg, Mike Schroepfer, Amy Wu, Ronit Ghose and David Chalmers.
So I now want to share the current state of my thinking.
There are too many parts of the metaverse ecosystem that don’t yet work or are unproven which means that too much about the final dynamics (of use cases, of industry structure, of device format) are currently unknown and unknowable. Outside of games, some popular like Roblox and others fading in popularity (like many NFT-based pay-to-earn games), applications remain niche. Absent a large-scale burning pain, niches may proliferate but a large market might not emerge.
The closest technology analogy to the metaverse’s current state that I can think of is General Magic. General Magic spun out of Apple in 1990 to build a universal communicator, a personal object, that we could use for calling people, sending messages, enjoying media and buying things electronically. It was fanciful then, but merely quotidian now.
Dept of our climate future
In every Sunday edition, we track key metrics that tell us a little about our shared climate future. Our member, Marshall Kirkpatrick, takes the time to curate developments towards a positive climate future, and you can read Marshall’s curation below. Here’s Marshall: “As we in the US battle advancing political authoritarianism, the field of ecologically sustainable economics saw fast and furious advancements around the world this week. Especially in transportation, we decided to make a list.”
- Remote-piloted and autonomous electric “pod” trucks will begin transporting goods on US highways after the Federal government granted permission to the Swedish firm Einride on Thursday.
- Earlier this week, Volvo Trucks announced a new long haul vehicle that runs on hydrogen fuel cells, emits only water vapor, and can drive 600 miles. It’s aimed to be available later this decade.
- Last week, the Biden administration and the government of Norway (the 4th largest shipping nation on earth) issued a Green Shipping Challenge praised by the Environmental Defence Fund to incentivise a shift to zero carbon shipping no later than 2050.
- Earlier this month, mobile kinetic energy capture and storage firm Ecolution announced it will turn garbage trucks in Amarillo, Texas, into rolling and breaking renewable energy mini power plants.
- A Danish firm says it’s broken the world record for the longest passenger and vehicle ferry ride on a single electric charge.
- Airplane manufacturer ZeroAvia announced it will begin testing a 19-seat half-hydrogen powered airplane next month in California.
- The largest grocery chain in the US, Kroger, announced it will expand its 350-charger EV charging network to more stores throughout the country.
- And the Los Angeles city council will introduce a proposed law banning the construction of new petroleum gas stations.
That’s a lot of momentum in decarbonising transportation!
Investment growing, more needed: According to a flagship report by the International Energy Agency this week: “Global energy investment is set to increase by 8% in 2022 to reach USD 2.4 trillion [a record level], with the anticipated rise coming mainly in clean energy. Although encouraging, the growth investment is still far from enough to tackle the multiple dimensions of today’s energy crisis and pave the way towards a cleaner and more secure energy future.” Dr. Simon Evans, Deputy Editor of the publication Carbon Brief, shared his favourite charts from the report and put it in further context. Relatedly, a new US Solar Buyer Consortium has formed to buy $6B in solar panels and expand the solar supply chain’s capacity. In wind, UK-based researchers have found that the global pipeline of wind power generation capacity, from planned to operational, has doubled in the past year alone.
To market, to market: Renewable energy generation is essential, but equally essential is getting that energy onto transmission grids for distribution to energy users. In the US, this has been a major barrier to expansion of the renewables market. This week federal regulators at FERC unveiled new plans that should address many of the problems leading to a clogged backlog of renewable energy projects looking to come online. Widely praised, the plans were described by Exponential View member and renewables expert Ramez Naam as “good steps.”
Short morsels to appear smart while measuring bacterium
💻 Australian scientists have revealed the first ever quantum circuit, a huge step towards an advanced quantum computer.
🏃♂️ Why don’t you feel hungry after you exercise?
🎒 Vitalik’s guide to being a digital nomad. Lots of Uniqlo.
🔋 Vehicles-to-grid in action: how Leicester nurse Marie is cutting her energy bills in half.
🍎 MacOS: from 1984 to present. Warning: viewers may experience feeling old.
We are convening a roundtable on crypto regulation sometimes in July. If you’re an expert in the field and want to contribute, fill out this form. If you know someone who is, forward the form to them. Thanks to those of you who already filled out the form – we’ll be in touch with more details next week!
Really hope if you have expertise in this area you’ll sign up!
What you’re up to – notes from EV readers
Vessela Ignatova wrote “The biz of Biz Ops - building a function that supercharges the business”.
Wharton School Professor and Director of Blockchain and Digital Asset Project, Kevin Werbach co-led an examination of DAOs beyond hype.
Josh Berson is convening a multi-series seminar on Ignorance as Politics. Read more and apply here.
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