🔮 Democratic AI; local economies; synthetic biology; rare earths, crypto heroes ++ #380

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.

In last week’s Sunday Commentary I look at how our understanding of security in Europe is shifting👇

🔮 Sunday Commentary: What is it Good For?
War, huh, yeah What is it good for?Edwin Star - War (what is it good for?) The war in Europe has forced many European nations to rethink their understanding of security. NATO is finding its mojo again. The Russian commentariat elite have lost their composure, as Julia Davis’ exceptional

The near future

🧵 Welcome our AI overlords
Loved this publication from DeepMind: Democratic AI, an experiment to design a social mechanism of allocation of resources that would be preferred by a majority. The system trained a deep reinforcement learning agent on human feedback about societal wealth allocation. The outcome was neither a dog-eat-dog libertariana or an aggressive egalitarianism. Rather, the winning configuration of societal resources redistributed funds to “people in proportion to their relative rather than absolute contribution,” taking into account initial endowments. Secondly, the system “especially rewarded players whose relative contribution was more generous, perhaps encouraging others to do likewise.” Interestingly, the final configuration was one which was supported by majority vote — so humans remained in the loop.

It’s fascinating to be able to run experiments like this in silico and see how they play out. Radical ideas for distribution which are purely designed in neuro can often end in disaster; consider the translation of Marx’s ideas to the Soviet Union or the Chicago School’s to Chile. (Full Nature paper on Democratic AI here. I’ve not read it yet.)

🗺️ Local production
Reshoring and nearshoring is booming as security, supply and shipping concerns encourage US firms to build factories closer to home. Manufacturers are now pricing in fragility as they think about where they build their products. This may not yet show up in data. Kearney, a consultancy, has been tracking reshoring for nearly a decade, and last year American firms increased their reliance on China. What might be more of a leading indicator, though, is executive peer pressure. More than three-fifths of executives would follow the herd to reshore. As I wrote in Exponential, I expect technology to provide headwinds for the Davos version of globalisation. Much of this technology (like precision fermentation, additive manufacturing or solar power) enables the low-cost, responsive, localised making of stuff. Since the book came out, supply chain security has become a priority which has only fuelled this trend.

Of course, the decision for onshoring vs. offshoring is a nuanced one. Contract manufacturers are not going to stand idly by while their market disappears. Some in China, like Foxconn, may even have automotive manufacturing in their sights. However, I’ve spoken to a number of senior execs in large auto manufacturers, as well as in dynamic startups, and they remain doubtful that contract manufacturing for vehicles will be possible due to the complexity of modern cars – powertrain, batteries, interior, software and user experience. I do wonder whether contract manufacturers might have an easier way in with lower-cost vehicles at price points of $5,000 or less, like the Wuling Mini-EV.

See also: Not content with aiming for semiconductor sovereignty, Chinese firms have clubbed together to build openKylin: an open platform for a Linux-based operating system to replace Western ones.

⚙️ Local work
Remote work may create global labour markets and, in turn, fundamentally shift the choices that individuals make as they enter the workforce. There has been an implicit trade-off between the economic opportunities of the city and the bucolic comforts of your hometown. As investor Marc Andreessen argues, that might not be true now. Williamsburg, a trendy neighbourhood in Brooklyn, is having a retail revival. Retail rents are up 20% year-on-year. This could be a taste of how distributed work may revitalize neighbourhoods.

Working remotely is still an option, but working in VR isn’t yet. In one study, people working in VR found themselves less productive, more frustrated, more moody and suffering increased eyestrain. See also: The productivity increases in four-day work week trials.

🧫 Understanding bio and machine learning
Much is written about the intersection between bio and ML, but if you aren’t a life sciences person and have ML chops, exactly how and why might escape you. Joshua Elkington’s tear-down of ExScientia’s funding deck helps us understand what firms of the future bioeconomy might look like. ExScientia uses ML to accelerate the innovation cycle, and jumps into partnerships with other companies whenever it’s missing capabilities or data. This acceleration - without sacrificing the quality of drug design - makes the whole process cheaper, and largely automated.

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 a view of our current climate status in this segment every week, and you can read Marshall’s curation below. Here’s Marshall: “In Michael Lewis’s book The Premonition: A Pandemic Story, it’s said that effective public health strategies don’t offer silver bullets; they use pieces of Swiss cheese layered one on top of another until no holes go all the way through. In that spirit, we offer you this week’s orchestra of incomplete, imperfect, and yet inspiring climate work around the world.”

More validated solutions: Project Drawdown, the leading source of aggregated research on quantifiable ways to reduce greenhouse gas emissions, has published its first major update in 3 years. They’ve added 11 new solutions that could contribute to climate change mitigation. The organisation also updated the science and economics of the 93 solution types listed. Reflecting our growing appreciation of the role of the ocean in climate, the newly added solutions are seaweed farming, seafloor protection, macroalgae protection and restoration, improved fisheries, improved aquaculture, improved cattle feed, improved manure management, methane leak management, recycled metals, recycled plastics, and reduced plastics. Drawdown concludes that the investment in these solutions sufficient to limit warming to 1.5C would cost US$23.6 trillion, would avoid or sequester more than 1,600 gigatons of gases, and would save more than US$140 trillion in lifetime costs. Sounds like a good deal!

Renewables investment growing, 10X more is needed: The above number (US$23.6 trillion) is interesting to look at relative to the International Energy Agency’s latest report finding that that global energy investment is predicted to increase by 8 percent in 2022 to reach $2.4 trillion, 80% of which will be in renewables, storage, and grid. The report includes many caveats, including the rising cost of materials. We’ve been thinking a lot lately about the risk that the growth of renewable energy might just continue to support growing energy demand without displacing fossil fuels, and the concept of Jevons Paradox. Also, about the incredible costs of mining not just coal and oil but steel and more. And the risk that renewables make the continuation of centuries of extractive colonial economics… sustainable. And so it’s with a complicated optimism that we note, for example, massive new investments like $750M for utility scale renewables by Intersect Power, following that firm’s $2.6B financing in November, and joined by another $900M raised this week by Pine Gate Renewables and D.E. Shaw. The broad and related “carbon tech” market, from carbon accounting to carbon capture, utilization, and reduction - raised $9B across 273 different companies in the three months of this year, according to data published by Pitchbook last week.

Turning Mines Into Renewable Energy Hubs: In the United States, a new $500 million program funded by the bipartisan infrastructure package aims to transform current and former mines into clean energy hubs, possibly including solar, microgrids, direct air capture and nuclear plants. The U.S. Department of Energy has issued a Request For Information to inform strategy for the program, which will start with funding demonstration transitions at two to five of the 17,000 mines in the US.

Big moves on plastic: The full weight of the economy of California will impact the plastics industry under a new law that will require plastics manufacturers to pay for recycling infrastructure, reduce plastic used in packaging by 25%, and make all single-use packaging to be recyclable or compostable by 2032. Plastics are a significant driver of climate change, from their use of oil in manufacturing to their emissions when burnt at end of life. India, reportedly the largest source of plastics thrown away or burned on earth, moved this month to ban 19 common single-used plastics nationwide.

Supreme Courts Outside the US: Many eyes are on the US Supreme Court’s disappointing decision in West Virginia. v. EPA that would make it harder for the Environmental Protection Agency to protect the environment. However, the Columbia Law School blog points out that in two other parts of the world, top courts are making different decisions. The European Court of Human Rights has accelerated to its Grand Tribunal: a case brought by six young people in Portugal who filed a complaint against 33 countries alleging that the respondents violated petitioners’ human rights by failing to take sufficient action on climate change. The suit calls on EU member countries to take more ambitious domestic action. And in Brazil, the Supreme Court has ruled against the Bolsonaro administration and said that the Paris Climate Agreement is a “supranational human rights treaty” and that the protection of the climate is a constitutional value.

That’s what’s being done for our climate around various parts of the world. What’s happening where you are?

Short morsels to appear smart while acid washing ore for rare earths

🌿 We could make buildings, cars and planes out of plant fibres. On top of strengthening materials, it’s a great way to lock up carbon.

🌇Car-free cities revolutionise life for their residents - from health, well-being and security to environmental impact.

🚖Autonomous taxis malfunctioned and blocked a San Francisco street for several hours.

🕯 Oldest trick in the book: Germany turns off the lights to manage the Russian gas supply crunch.

📉Here is another reason why you don’t want to capture every last detail of your citizens: Shanghai suffers a billion-record data heist.

💎 Turkey discovered 694 million megatons of rare earth element reserves, and is rushing to start extracting.

⛓Black Americans were more exposed to crypto than other groups, possibly because it held out the promise of overcoming the structural bias in the existing economy.

⚖️ On Sam Bankman-Fried’s efforts to stabilise crypto.

☄️On Bukele’s dangerous bitcoin bet for El Salvador.

👀 The first augmented reality contact lenses were tested out on a human. They contained micro-batteries to solve the power supply challenge.

End note

It’s summer, it’s hot. The heat has gone to my head so…

🇫🇷 On Bastille Day, the paperback of Exponential is going to be published in the UK and many other markets. The book had a really tremendous response, so if you haven’t bought a copy (with its snazzy new cover), please pre-order it.

When you pre-order, send us a copy of the receipt to paperback@exponentialview.co, and we’ll send you a discount code for 50% off annual EV membership + a special edition of Charts of the Week.

And for my friends in France, July 14th will come around without a paperback edition of Exponential for you. Of course, you can still order it and I am sure the English edition will wing its way to you. So please do. And I will also say to you, in the spirit of liberté, égalité, fraternité, that La Marseillaise is my favourite national anthem by some measure.

Aux armes, citoyens!


Members' comments:

On Sunday Commentary: What is it good for?

giannigiacomelli69: “War focuses minds and internal resources, and for the victor, it is a source of control over scarce resources. But the collateral damage (life, propagation and perpetuation of confrontational culture) must remind us that these gains could have had good ROI in centuries past, but not now - or at least not the same way.”

Juan.avellan: “Hi Azeem, and thanks for the interesting article in Science on the role of warfare in driving complex societies. It reminded me of the arguments put forth in "The Dawn of Everything" by Graeber and Wengrow. I'm still reading my way through the rather lengthy and fascinating book but I was surprised to see in the Science article some statements that "scholars largely agree" on the role agriculture played in the development of complex societies, which Graeber and Wengrow seem to very consistently at least water down (and probably debunk). That's why I found quite interesting that warfare may be a more reliable driver of complexity than agriculture. WWI and II are a good examples, BTW, as they drove a more complex world order (UN, Bretton Woods institutions, etc.). Any EV members have a view on this? Cheers.”

adamola1981: “I sincerely hope this is what happens: “accelerate the green transition, increase the emphasis of understanding systemic and global risks, and nudge us towards more science-based dialogue in our public spaces”... nicely put!”

What you’re up to – notes from EV readers

Jacqueline Schafer created an interactive version of the Dobbs opinion using her AI platform Clearbrief.

Amit Taylor and his team at Trueup track tech layoffs.

Pascal Finette released “Do One Thing”, a post and podcast about leadership (and the 1,235th post of his acclaimed blog).

Paul Swider wrote a novel exploring the use of lottery to allocate increasingly scarce resources in the face of growing demand.

To share your projects and updates, fill out your details here. Because of space constraints, we prioritise updates from paying members and startups I have invested in. (You can become the former by subscribing, if you have not already, and the latter by getting an intro to me via a trusted contact.)

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