š® The Great Wall of Silicon; bikes in cities; Appleās watch; gigs & GIFs ++ #394
Making sense of the US - China competition
Hi, Iām 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. Sign up for the weekly insights here.
In todayās edition:
The seismic impact of Bidenās tech export controls,
Better cities & hydrogen funding,
Appleās Watch, TikTokās streams.
The near future
š«The Great Wall of Silicon
Return to the export control policy announced by the Biden administration. Gregory Allen frames this specifically as American efforts to choke Chinaās AI ambitions. I recommend you read Allenās full analysis, and scroll to my End Note to discuss.
ā[t]he United States does not want China to have advanced AI computing and supercomputing facilities, so it has blocked them from purchasing the best AI chips, which are all American. It does not want China designing its own AI chips, so it has blocked China from using the best chip design software (which is all American) to design high-end chips, and it has blocked chip manufacturing facilities worldwide from accepting entity-listed Chinese chip design firms (as well as any Chinese chip company building high-end chips) as customers. Finally, the United States does not want China to have its own advanced chip manufacturing facilities, so it has blocked them from purchasing the necessary equipment, much of which is irreplaceably American.ā
Why this matters: For background, the old narrative is that China, with its large population, tons of data and willingness for the state and private sector to experiment in AI applications, could race ahead. (Listen to my two podcasts with Kai-Fu Lee on this; as well as look at last weekās Charts of The Week). Racing ahead would provide China with soft and hard-power advantages: being able to sell advanced surveillance technologies under the guise of smart cities to autocratic governments around the world, but also develop sophisticated AI systems for use in espionage, national security and military applications.Ā
(See also, Jordan Schneiderās hair raising summary of how quickly Bidenās moves have triggered an āindustry-wide decapitationā in China: āOne round of sanctions from Biden did more damage than all four years of performative sanctioning under Trump.ā)
šCities beyond autonomy
The mainstream media is picking up on the power of the e-bike as one part of rethinking the city. The New York Times profiles Dutch ebike maker, Van Moof. Indeed, the path to safer, cleaner transport doesnāt depend on the flashiest technologies. Finland, with its icy streets, had one third the road fatality rate of the US through design changes: progressively lower speed limits, punitive speeding fines and a serious approach to accidents.Ā
Why this matters: As weāve argued many times in this newsletter, making cities work better, in terms of climate change and the human experience, is more than a technology problem. Micromobility will be one key pillar. For a primer on micromobility, listen back to my conversation with Horace Dediu.Ā
Weekly commentary: Earthsuits or somaforming?
In the Weekly Commentary, EV member, anthropologist and novelist Josh Berson, explores how to think about environmental adaptation:
What I want to propose is that the contrast in how we think about earthsuits and somaforming highlights a limit weāve imposed on our thinking about how we might, if we so desired, come through the cascading series of catastrophes now looming up before us.
Joshās Commentary will be sent to members of Exponential View on Monday.
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.
One thing to know about our climate future this week:Ā Without big investment in adaptation, heat deaths could surpass cancer. This week, an 84-page report from the UN and International Federation of Red Cross and Red Crescent Societies says
projected future death rates from extreme heat are staggeringly high ā comparable in magnitude by the end of the century to all cancers or all infectious diseases ā and staggeringly unequal, with people in poorer countries seeing far greater levels of increaseā¦ Under 2Ā°C of warming, an extreme-heat event is projected to be nearly 14 times as likely and to bring heat and humidity levels that are far more dangerous.ā The report called for āmore engagement across the humanitarian, development, and climate spheresā¦ To avert the most devastating impacts, we must invest equally on adaptation and mitigation.
Thatās us, team! This week it was reported that other-than-human animal populations saw declines averaging 69% over the last 50 years. We need many and large investments, knowledge sharing, and collective adaptation now.
In positive climate news:
Concentrated solar: 30 projects slated for construction in China will grow global capacity of concentrated solar by nearly 50% of the 6,800 MW reported in. By using mirrors to concentrate sunlight and store it as heat, these systems help meet demand that goes up at night, as PV solar capacity goes down.
Hydrogen funding: Hy24 has closed a ā¬2 billion fund it calls āthe worldās first and largest infrastructure fund to invest exclusively in the entire clean hydrogen value chain.ā Separately, but in a good example of large-scale hydrogen investment, German steel giant ThyssenKrupp is investing $1.9 billion in a hydrogen direct reduction system, which is expected to reduce the jaw-dropping 7% of global emissions attributable to steel manufacturing.
Breeze batteries: Scientists from Nanyang Technological University in Singapore have developed a wind harvesting device made without heavy metals that could power electronic sensors around the world with light breezes and far less electronic waste.
Market dataĀ
About 30% of iPhones in North America are paired with an Apple Watch. This āattach rateā is more than double 7 years ago, when there were a third fewer iPhones in circulation. (By my rough estimate that would put about 30-40m Apple Watches active in North America.)
More than 6% of all cars sold in the US in Q3 were electric vehicles. Two years ago, that proportion was 2.2%
There are over 4,000 active DAOs, with treasuries totaling around $20 billion. 40% of them focus on decentralised finance.Ā
Some estimates put the Bank of Englandās losses at around Ā£200bn, while the Federal Reserve accrued $720bn of unrealised losses by the end of the second quarter of this year.Ā
TikTokās livestreaming business is growing at 900% per year.
Short morsels to appear smart while keeping the GIF alive
š„ļøWe can learn a lot from retrocomputing (yes, ancient software).
šØš³Chinaās data trading market is struggling. A lot.
āļøCreative ways Chinese citizens are fighting social media censorship.
šThe end of an era: the GIF is dying.
š§ŖThe Science family of journals will allow authors to open access to articles more easily, for free.
š”We might be able to fight Covid with light.
šŖ«Berlin is turning off its 19th century gas lanterns amidst the energy crisis.
šThe US proposal to treat gig workers as employees made the shares of Uber, Lyft and Doordash slump.
End note
I returned to the US - China competition again this week. Itās important, and opens up many key questions, so I am trying to make sense of it. Iām curious about how the amount of industrial espionage and intellectual property theft from Beijing will increase. (As an aside, I found this fascinating article on how much industrial espionage improved East German productivity.)
But I also wonder how quickly China can adapt and build a home-grown industry without access to Western technologies. Surely they will try to ā and do so by spending hundreds of billions of dollars ā but how long will it take? The Asianometry podcast describes in some detail the failureās behind Chinaās big semiconductor efforts thus far. Might there be opportunities to leapfrog existing Western approaches? Without access to these technologies, how might this impact Chinese productivity growth in coming years?Ā
Many questions. Comments are open for members to share your thinking.
Azeem
P.S. š EV member Claudia Chwalisz is one of the leading voices on deliberative democracy. Weāll have an exclusive opportunity to learn more about Claudiaās new organisation, Democracy Next, and their plan to bring about a new era of democracy on October 20, 5pm UK time / 12pm ET. Paying members of Exponential View can register for this online event here.
P.P.S. š³š± Marija will be in Amsterdam on Monday, October 24. If youāre around and want to meet up with her and other EV members on the 24th, 7pm local time, register here.
What youāre up to ā notes from EV readers
Congrats to Ramona Liberoff on joining the Platform for Accelerating the Circular Economy as Executive Director!
Members Diana Wu David and Pete Cohen discuss reinventing work at the time of immense acceleration.Ā
Tom Greenwood considers whether web design and software can reduce e-waste.Ā
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.)
Regarding the Great Wall of Silicon section, I can already see a couple of the likely short-term operational implications on the security, risk and compliance side: 1) even greater focus on sanctions management by companies and on countries that are hubs for sanctions evasion, on top of what has been developed for RU/UA war; and 2) likely increase of the insider threat risk in organisations. Even though the Biden policy is focused on the semiconductor industry, given its breadth, I imagine it will have impacts far beyond that industry and in unexpected ways, so the implications mentioned above are likely to be broader than just the semiconductor industry and their supply chains.
China vs US damages the global collective intelligence. China is better at complex production ecosystem (archetypes of hierarchies + markets) - and good at capturing those learning curves, and scale. The West better at wide-ranging exploration (archetypes: ecosystems + communities + markets) and generally invention-to-innovation cycles. An example is Chinaās data trading which struggles: data markets require trust that goes beyond whatās embedded in a physical product. And indeed we canāt allow yesterdaysā ideology to become too powerful, because their value and governance systems make them unrestrained. But Western markets and in particular the US havenāt yet internalized huge externalities (climate, health, poverty due to path dependency) which gives China and others a pretext to call us hypocrites.