Hi, I’m Azeem Azhar. I convene Exponential View every week to help us understand how our societies and political economy will change under the force of rapidly accelerating technologies.

If you are reasonably new to this wondermissive, then a great way to get the baseline of my thesis is to buy my book Exponential (called The Exponential Age in America.) And if you prefer audiobooks, you can pick up the spoken version instead. I’m the narrator! 😄

The near future

🖥️ Industrial war
While drones and information operations feature heavily in modern war, steel, explosives and blood retain their centrality. In fact, the Russian invasion of Ukraine is chewing through materiel. “US annual artillery production would at best only last for 10 days to two weeks of combat in Ukraine” points out Alex Vershnin. This will force a re-evaluation of industrial capacities. Many Western nations (it’s not just hapless Germany) have reduced their abilities to support a modern near-peer war. And those Western nations  “must assume that China will not allow Russia to be defeated, especially due to a lack of ammunition.” My sense is that this will trigger a reorientation not merely of manufacturing capacity, but research and development of new supply chains, industrial processes and the innovation that can support all of that.

🪢 Family ties
The grandchildren of China’s pre-revolutionary elite have recovered around two-thirds of the economic-status advantages that their grandparents had. Their parents, who suffered most heavily under Mao’s eviscerating process of collectivisation and equalisation, actually found themselves worse off than the non-elite.

This suggests a very long-lasting resilience of social capital. Even the Cultural Revolution could not snuff out social capital, including ties, signals and values - attributes that emerge from the network of human relationships.

Another recent paper: examining social capital identifies that strong kin networks are detrimental to participatory democracy. (Preprint of the paper here.)

Social capital expressed across personal relationships is an important attribute of modern societies but such understanding doesn’t seem to make its way into policy-making. However, modern data analysis techniques could help illuminate its role in economic and social mobility.

🔥 Crypto meltdown

The crypto market continues its meltdown, with Bitcoin dropping below a key $20k price and Eth below $1k. Some people have likened this to the dot-com crash that started in March 2000. But I think it is more like the unwinding of complex derivatives instruments, like CDOs and CDO-squareds, which opaquely bundled risks and passed them on to investors to ignite the GFC. With enough of a perturbation, the shaky nature of that financial Jenga was revealed. Much of the focus this week was on Celsius Network,  which offered high savings rates to more than a million investors. Celsius froze withdrawals as it came under pressure to return funds. It achieved those high yields through complex financial juggling, described well here. (Briefer FT profile here.) One consequence of this will be greater regulatory scrutiny. Such scrutiny should please both crypto-converts (as it provides more certainty in the market) and crypto-sceptics (as it curbs the worst excesses.)

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: “Global efforts to decarbonise the energy sector are speeding ahead. Check out these latest developments, which will compound with so many other efforts to tackle the huge challenge of a transition to sustainability on a finite planet.”

Windia: The Indian government has announced plans to hold its first auctions of off-shore wind energy production rights later this year. In addition to being the first auction, the scale is significant: 10 to 12 GW of production capacity is intended to be auctioned. For context, the US held its largest-ever wind auction earlier this year and sold rights to a combined 5.6 GW of production. Last month the UK saw construction begin on what will be the largest single wind farm facility in the world: Dogger Bank at 3.6 GW. The World Bank has estimated that India will be able to produce up to 174 GW of offshore wind power, which is almost 50% more power than all the solar capacity installed in the US today. People often point to India and China as countries that must lead global decarbonisation, so this is great news. Relatedly, the University of Chicago released data about China this week that found that the country has reduced air pollution substantially. In the past 7 years, China reduced air pollution by 40%. The US took 30 years to accomplish a similar task. Readers inside the US may (or may not) appreciate the words of leading climate scientist Katharine Hayhoe: “Pointing fingers elsewhere when the United States is responsible for almost 30% of carbon pollution since the dawn of the Industrial Era is a denial tactic. Once your house is in order, you can ask other people to take care of theirs: not before.”

US energy storage up 4X YoY: Grid-scale energy storage, which is essential for intermittent renewable power sources to be relied upon, grew 4X from the first quarter of 2021 to the first quarter of 2022, according to data from leading analyst firm Wood Mackenzie and the American Clean Power Association. The first quarter of this year was the biggest quarter ever by far, the report said. That’s despite challenges in supply chain, pricing, and the fact that storage growth tends to be weighted toward the 2nd half of most years.

Time to sprint: A UN-facilitated group called Race to Zero, made up of 10,000 companies, governments, investors and more, announced it was dramatically raising the bar that members would need to meet within 1 year or risk being kicked out of the group. Cecilia Keating at GreenBiz summarised: “Members of the campaign must commit, at a minimum, to halting deforestation and ‘phasing down and out’ all fossil fuels, by restricting the development, financing and facilitating of new fossil fuel assets. No new coal projects should be enabled through the activities of Race to Zero members, it stresses.”  When people say we need institutional action, not just individual action, this campaign is a good example. Raising the bar for continued inclusion is a strong move.

Short morsels to appear smart while you get your seven hours

💥 Close to 400 car crashes in the past 10 months in the US involved driver-assist systems, about 70% of them involving Teslas. (Although not clear whether this is higher than average or not, given how many more vehicles with advanced driver assist are Teslas than others.)  

🧬 A novel technique which radically reduces the cost of sequencing a genome down to $100, or a little more for the time being.

⚰️ After 700 years, genome technology finally reveals that the Black Death originated in Kyrgyzstan.  

📺 Further decline in trust in the news, selective avoidance, and winner-take-all online subscriptions: the 2022 Reuters report on Digital News describes the evolving landscape of how we get informed.

😴 Seven hours of sleep is optimal if you are middle-aged or older.

📈 How to measure progress, starting with the very beginning to galactic civilisations.

🏔️Climate change is forcing Nepalese authorities to move the Everest base camp.

🌑 The history and philosophy of Kali, the unusual and fierce Indian Goddess.  

🚀 Dubaisk: Where the Russian elite is hanging out.

End note

Humans wasted a lot of time this week because a single Google engineer claimed a chatbot he was talking to gained consciousness. I won’t bother to link to it, except to say it merits no attention at all. It’s an absurdity that feeds the peanut gallery. We don’t have the science or the engineering to do this yet and consciousness isn’t going to emerge by accident from some research lab in 2022. What it does, instead, is draw attention away from the real opportunities and challenges that lie in developing AI systems. The chaser? It weakens public trust and understanding in the field.

Please listen to my podcast with Anil Seth where we cover some of these topics.

It was great to meet so many of you at Kite Festival, CogX and Founders Forum this week.

Enjoy the sun,

Azeem

P.S. Are you engaged on (crypto) regulation issues? Let us know by filling out this form, we’d like to loop you into our member insights network.

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What you’re up to – notes from EV readers

Andrew Green will be a panellist at Infineon’s free online event “Tech for a sustainable future” tomorrow, June 20th.

In addition to their free Carbon Removal course, Adam Oskwarek and Zopeful are launching CDR Fund-1, where anyone can buy a ready-made portfolio of high quality carbon removal.

A former NFL football player, Dave Anderson, and his team at BreakAway Data are on a mission to make sure all athletes own their data.

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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