🔮 Aliens are like us; GAFA smackdown; peak car; nCov; creative AI; vegans, libraries & email ++ #255

Feb 02, 2020

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

I convene some of the most thoughtful investors, entrepreneurs, researchers and leaders in regular live briefing calls. Join the conversations, become a member today.

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The near future

⚙️ The major tech firms announced results this week. Three things stood out, and they tell us where we are in the tech cycle. Phones are done, cloud is getting started, and consumer subscriptions matter.

Amazon and Microsoft are winning the battle for cloud computing. AWS, Amazon’s cloud business, hit a $40 billion run rate. It is a high margin business, and represents two-thirds of Amazon’s overall income. Microsoft’s Azure cloud business grew 62 per cent, and is at a $20 billion clip Cloud computing infrastructure will be the substrate of the exponential age. In some sense, like controlling the power plants, roads, and factories, for the economy—while also having the deepest insights on which parts of the economy are doing well, and which aren’t.
Amazon’s Prime subscription business cantered through the 150 million-member milestone.
Apple did very well with sales of $92 billion for the December quarter, a rise of 9 per cent. iPhones contributed half and did well, against the odds. Perhaps the iPhone 11, with its better camera, was sufficient a draw. Phone sales still grew below the firm’s overall growth rate. Its services business (that is, recurring revenues for things like cloud storage and video) has nearly trebled in size since 2015.

💥 Jake Goldenfein: facial recognition is only the beginning of the collision of personal, state and corporate interests:

Physical spaces are becoming cyber-physical spaces. Computer vision is especially meaningful for its ability to translate the “real world,” and the people within it, into numbers for statistical analysis and automated decision-making. These cyber-physical systems can be constantly and pervasively monitored but, more importantly, computationally interpreted and understood. In the cyber-physical world, the computational sentinels that manage access to public spaces, sporting events, shops, public transport, and whatever else will have a great deal of information on which to base their decisions, including who you are, what kind of person you are, and what you are doing.”

(See also, the technocratic angle: digital twins of cities are becoming a powerful tool for decision-makers.)

👽 Some researchers think that the basic laws of science mean that intelligent alien societies would, at least in some ways, have to look a bit like ours, from social structure to its trajectory of technological development.

🚘 ‘It could well be that we passed the peak in global automotive production,’ says the CEO of Robert Bosch, the world’s largest car parts supplier. Tesla, meanwhile, exceeding $100 billion in valuation making it more valuable than Ford and GM combined. Whether it is really worth this much is a bone of contention, and Twitter is full of Tesla-stock naysayers; nevertheless, the lead the firm’s electric vehicles have in the market is undeniable. Ark Invest’s analysis of Tesla takes a decent look at the experience curve effect on Tesla’s likely vehicle costs. The headwinds for incumbent car manufacturers are terrifying: the move to electric drive trains and software-rich products, the growing hostility towards the car, at least in cities. (For example, read this interesting profile of eleven cities planning car-free zones.) It staggers me that the large car companies squandered their decades of experience and are so ill-prepared for the platform shift, consumer and policy changes of the years ahead.

🌡️ Climate emergency: 414.08ppm | 3,772 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 January 30): 414.08ppm; January, 2017: 406.13ppm; 25 years ago: 360ppm; 250 years ago, est: 250ppm. Share this reminder with your community by forwarding this email or tweeting this.

Qatar’s General Electricity and Water Corp has broken records for the lowest winning bid ever registered for large scale renewable energy, at just $0.016/kWh. A decade ago utility scale solar ran to about $0.25/kWh, so we have here a 16-fold decline in ten years, or a halving of price every two-and-a-half years.

🌬️ Meanwhile in the UK’s wind-power industry, record-breaking is becoming almost commonplace. Both the world’s largest offshore wind farm and the world’s largest complex of wind farms will shortly be built off the British coast, and are expected to make Britain the biggest offshore wind market in the world.

Surplus offshore wind energy will also power the world’s first commercial-scale green-hydrogen plant, expected to be up and running by 2025. Diverting excess renewable energy into green hydrogen production is an idea which has been floating for years, but this is the first attempt to do it at this scale. The rapidly declining pricing of renewable electricity, see the Qatari contract above, could be enlivening for hydrogen. As electricity becomes free so does electrolysis.

Artificial intelligence

Google AI has released a 2.6 billion parameter end-to-end trained neural conversational model. ‘Meena’ is an end-to-end, neural conversational model which, they hope, will be a little less prone to confusion, illogical responses and just general social awkwardness. The model was trained on more than eight times as much data as GPT-2, the previous gold-standard for conversational AI models. Researcher Mark Riedl claims Meena is ‘most importantly: not a muppet.’ You can assess Meena’s muppet status for yourself with some examples in this Twitter thread. Some are quite amusing.

Gary Marcus argues that for all its capabilities, GPT-2 doesn’t actually display any meaningful understanding of what it talks about—it’s just very good at arranging word salads. Since the days of ELIZA in the 1960s, chatbots have gotten bigger, but not that much better: ‘GPT-2 has no deeper understanding of human relationships than ELIZA did; it just has a larger database. Anything that looks like genuine understanding is an illusion.’

📖 ‘If a novel was good, would you care if it was created by artificial intelligence?’ asks Richard Lea.

This question of inner experience, beyond the mere simulation of intelligence, may present an insurmountable barrier for true artificial intelligence. ‘At best, such circuits would simulate the inputs and outputs of a brain while having absolutely no experience at all [...] These systems might beat us at chess and Go, and deceive us into thinking they are alive. But those will always be hollow victories, for the machine will never enjoy them,’ writes Philip Ball, reviewing Christof Koch’s new book The Feeling of Life Itself. (Ball’s review includes two other books, so I recommend skipping ahead to the bit where he talks about the Koch.)

While AI may never have the same capabilities as natural intelligence, it undoubtedly has other abilities natural intelligence could never dream of. Google’s AlphaZero might have the muscle to take on the challenge of quantum computing, including in ways which simply did not occur to human researchers.

I was late to this interesting analysis: AI may end the per-seat-pricing model that has enabled so many successful SAAS businesses.

Chart of the week

More than fifty papers, some of them peer-reviewed, about 2019-nCov, have been published, according to Nature. There is a beautiful tale of co-operation, the humanity of science, here. We are witnessing geotechnopolitical fragmentation (think national internets or the 5G fracas), global flu research continues to be collaborative. The genomic sequence of nCov has been shared by Chinese researchers on various sequence databases, like GISAID.

Digging deeper, you might enjoy reading the case report of the first nCov infection in the US. It was fascinating to see how complex diagnosis and treatment ended up being. Clinicians undertook fourteen real-time reverse transcription PCR tests. In the UK, these cost between £25 and £75 each, so roughly £500 on PCR testing alone, let alone an eleven-day hospital stay. For one patient. Presumably, protocols will become more effective.

One further example is this detailed study of the epidemiological characteristics of the virus published in The Lancet.

Short morsels to appear smart at dinner party

📚 Almost twice as many people visit libraries as go to the cinema in the US. There's considerable variation by demographics, though.

🙈 Deeply unfunny, and yet inexplicably widely viewed, comedy skits on TikTok actually tell a much deeper story: ‘[T]aken as a body of work, they tell a story: the struggles of a person trying to go viral again […] battling with the TikTok algorithm, a kind of Frankenstein’s monster.’

Avast, the antivirus provider, has been selling vast amounts of sensitive data about its users via a subsidiary called Jumpshot.

Markets in the US are no longer free.

🇷🇺📦 Yandex, Russia’s leading search engine, is really very good at a lot of things, including delivering groceries as it turns out.

🥗 What does veganism do to your brain?

Finally, your e-mail costs how much?

End note

As I was sitting down on Friday to put together this week’s Exponential View drinking a coffee, half a tooth fell out. The tyranny of middle age.

I was, at the time, writing this week’s essay. It is a fun take that looks at capital market structure and industrial change in the exponential age. I had to press pause on that as I had to dash out to the dentist and lost crucial writing time. I’ll get round to finishing it soon enough.

Cheers!
Azeem

Today’s edition has been supported by our partner, Masterworks

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What you’re up to—notes from EV readers

Nick Grossman builds up on my thoughts on regulation in the tech industry.

Ludwig Siegele shares details about Facebook’s content oversight board. It is a fascinating attempt for the firm to come up with a self-regulatory mechanism on some of its most contentious areas.

Roger Taylor’s Centre for Data Ethics and Innovation lay out a summary of how they assessed London’s Metropolitan Police’s intent to roll out live facial recognition.

Stephanie Hare’s op-ed in The Washington Post tackles whether London will become the next Orwellian surveillance city.

Tom Greenwood’s not-so-simple-guide to planting trees for regenerative business.

To share your news and project updates with fellow EV readers, email marija@exponentialview.co.

Dig deeper

My conversation with Gary Marcus about the limitations of deep learning and the nature of intelligence.
My conversation with Cathie Wood, where we speak about why she is bullish on Tesla.
My conversation with Binyamin Appelbaum about what the free market economists got wrong.