🔮 Bitcoin’s carbon status quo; Tech sovereignty; Regulating AI; Biden’s climate pledge; North Korean hackers & nuclear honey ++ #319
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 the latest podcast conversation, I go deep into the future of meat and the role of cultivated meat in transforming our agriculture systems with Didier Toubia, CEO Aleph Farms.
Dept of the near future
Bitcoin as battery
🌏 The debate about how to solve crypto’s environmental footprint is anything but clean. On one side of the debate are the evangelists who believe cryptocurrencies like Bitcoin can solve all the world’s challenges. On the other are those who see miners using ample amounts of coal in areas of China & natural gas in New York as a cheap dirty power source.
A report published this week by Square and ARK’s Cathie Wood suggests that Bitcoin’s incredible power demands are actually an incentive for utilities to invest in renewable energy (we already touched on this in EV#315). With prices high, large-scale miners have enough clout to invest in renewable energy platforms and batteries needed to solve for intermittent supply from renewables like solar. This has the compound effect of boosting renewables and battery capacity, which would result in excess power that could be pumped into public electricity grids.
It’s a compelling argument but not everyone is convinced. Lionel Laurent makes the critical observation that mining hardware is still incredibly inefficient and therefore such a shift to renewables wouldn’t necessarily result in excess power. The other issue, which is ever-present with Bitcoin, is cost. When the price of Bitcoin is high, anything is possible, but if the currency goes into another prolonged slump, where will the capital for all these investments come from?
Where do I end up on this? My critique of the critiques of “bitcoin as battery” is that those challenges rarely recognise the speed with which decarbonisation of the electricity system is occurring and that in most of the world renewables are cheaper than fossil fuels. And the learning effects and policy frameworks favour renewables & storage pricing coming further down.
In other words, technologies have always come down in price because of volume. Wright’s Law points out the scale brings per-unit pricing down, independent of economies of scale. So the question for critics of the Square/Cathie Wood view is why would Wright’s Law not apply to renewables when the driver of demand comes from crypto?
There are more practicalities of embedding renewables in the grid, of course, than simply capacity. Shayle Kann who gets the stuff much better than me is worth reading.
The unicornhood of Uipath
⚡️ The automation software maker UiPath is one of those unicorn companies that doesn’t come around all that often. The company, which was founded by Daniel Dines, had fewer than 20 employees in 2015. It’s now worth more than $30bn after its stunning IPO in the US.
On the one hand, UIPath’s story might be a tale of massive valuation inflation. Several private startups are boasting record revenue multiples (300x anyone?). UiPath’s valuation is 50x its 2020 revenues.
Let me historcise UIPath’s success. UIPath is a classic deployment phase opportunity, to use Carlota Perez’s framework. UIPath is entirely dependent on the availability of pre-installed IT infrastructure: networking, enterprise applications, processes that have been moulded to fit the constraints of databases, spreadsheets, and mainframe apps. That infrastructure has been built over 40 years across businesses. While every business is different there are some common design patterns. UIPath is able to grow as quickly as it has because of that infrastructural investment. It has grown as quickly as it has because, as proven by its results, the team must be pretty amazing.
PublicComps has a great overview of UiPath’s business, metrics, and product set.
For a laid-back read on UiPath, Mario Gabriele digs into its S-1 filing. There are some eyeopening details here about the kind of automation UiPath enables. A dirty secret of the decades-old business process outsourcing industry is that hundreds of thousands of people do no more than type data from a legacy computer system into a new one. (All day, every day, human as machine.)
In 2019, I spoke with my friend Reshma who was one of the first investors in UiPath. Listen to that conversation here.
💻 The global chip shortage continues as rhetoric over chip sovereignty heats up. China announced that it wants Shanghai to be the country’s chip capital and foundation of its semiconductor independence. The issue of technology sovereignty is bleeding over to other realms as well. Israel, with its famed start-up sector, just inked a deal with Google and Amazon to create a massive data centre in the country. Just one catch: All data must stay in Israel. These developments aren’t new but they are accelerating at a delicate moment.
Nice assessment of how India will play China’s growing ascendancy.
China has even started large-scale testing of its internet of the future.
🇪🇺 Big news from Europe this week as regulators proposed sweeping new laws concerning AI. The European Commission is attempting to do something many thought was elusive: create a framework of regulations for the wide and diverse field of AI.
The US FTC is also getting into the act too.
Several exciting AI innovations hit the press this week including new chips from Cerebras, now pushing 2.5 trillion transistors, more than 200 times more than in the A14 Bionic chip in your iPhone.
I love this: researchers have built deep neural networks from sheets of plastic. They can recognise objects at the speed of light - using that light alone.
🔋Dept of decarbonisation
CO2 level 417.56 ppm | 3,334 days until we reach the 450ppm threshold
The latest measurement of atmospheric CO2 (as of April 21, 2021): 417.56 ppm; April 2020: 418.32 ppm; 25 years ago: 360 ppm; 250 years ago, est: 250 ppm. Share this reminder with your community by forwarding this email or tweeting this. (I am going to be updating these calculations in a couple of weeks.)
🌞 By 2050, climate change could cut the world economy by $23tn. That’s the assessment from Swiss Re (see one of their charts below). Poorer countries will feel the lion’s share of this burden but no country is immune from the impact of climate change. The United States under Biden appears to be ready to act (see my endnote for more on Biden’s climate pledge). Will that change be enough? Maybe yes, maybe no.
👩🚒 The Swiss Re Institute compiled several charts highlighting natural catastrophes stemming from climate change. Each is compelling in its own right but given the horrific wildfires in Cape Town this week, this chart highlighting the rising danger of wildfires seems fitting.
🚙 Information is power. At least that’s the thinking behind TezLab, an app that’s been touted as a Fitbit for Tesla vehicles. The app gives owners exact information about the percentage of fossil fuels and renewable energy coming from charging stations throughout the US.
Short morsels to appear smart during the next climate conference
🎹 Looking for a soundtrack to your workday that will take you back to the 1990s? Look no further than the endless acid banger algorithmic self-composing loop that lives in your browser.
👩💻 More background on the breath-taking SolarWinds attack.
🙈 Travis Kalanick’s new startup is ruled by a “temple of bros”.
🇰🇵 A deep dive into North Korea’s cyber army. So much incredible talent gone to waste.
🔋 There is a new battery startup in the increasingly crowded battery market.
🐶 Dogecoin started as a joke but it’s no laughing matter.
💻 Apple prides itself on user security and privacy but that doesn’t mean its suppliers can’t get hacked.
🤖 You are not alone. Loads of programmers regularly copy and paste from Stack Overflow.
📈 Get ready for strange donations as freshly minted crypto billionaires turn to philanthropy.
📱 Get off your phone! This is from 2019 but it's one of the best lists of things you can do to get off your phone.
🚀 Incredible news! NASA’s rover makes breathable oxygen on Mars.
🐝 Fallout: American honey is radioactive from decades of nuclear bomb testing.
The Biden Climate Plan is a big deal. We had a good discussion about it here. I want to dig into it some more, specifically to understand what kind of innovation and activity it will incentivize. The opportunity here is to ensure that there is support for small innovators and decentralized approaches towards decarbonization. There is much is to dig into - but let’s enjoy that value of having the US actually show up.
Have a great week!
P.S. Some interesting news coming out this week - I’ll keep you updated 😄
What you’re up to – notes from EV readers
Join Azeem on April 28, 1pm PT / 9pm BST, when he’ll discuss the exponential transition live with Faura’s community and give a sneak peek into his latest project.
Lucy Hooberman is organizing an ACM WebSci21 panel based on work done by Joy Buolamwini, Timnit Gebru, and Margaret Mitchell.
Paola Bonomo and Inspiring Fifty are looking for the next batch of Italian women, working all over the world, who are leaders in tech and other STEM fields. Please refer your friends if they fit the description! Nominations are open until May 15th
To share your projects and updates, fill out your details here. Because of space constraints, we prioritize 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.