The Geek’s Reading List – Week of November 4th 2016
Welcome to the Geek’s Reading List. These articles and the commentary are not intended to be taken as investment advice, nor should they today. That being said, investors need to understand crucial trends and developments in the industries in which they invest. Therefore, I believe these comments may actually help investors with a longer time horizon. Not to mention they might come in handy for consumers, CEOs, IT managers … or just about anybody, come to think of it. Technology isn’t just a niche area of interest to geeks these days: it impacts almost every part of our economy. I guess, in a way, we are all geeks now.
Please feel free to pass this newsletter on. Of course, if you find any articles you think should be included please send them on to me. Or feel free to email me to discuss any of these topics in more depth: the sentence or two I write before each topic is usually only a fraction of my highly opinionated views on the subject!
This edition of the Geeks List, and all back issues, can be found at www.thegeeksreadinglist.com.
1) Uber plan for flying taxis targets 2025-2030 and could spend $400 million- $1 billion to make it happen
Some modern entrepreneurs sell their product (i.e. the company stock) by spinning out an endless array of world-changing ideas and not by actually turning a profit. The idea of flying taxis is daft since any VTOL craft has to waste a lot of its energy keeping aloft with little benefit from forward motion. The unfortunate fact that the best batteries have 1/40th the specific energy of diesel fuel makes an electric VTOL even less practical and that doesn’t even take into account the recharge time and short battery life. It’s almost a pity the likes of Uber don’t work on old fashion things like running their business.
“On-demand aviation, has the potential to radically improve urban mobility, giving people back time lost in their daily commutes. Uber is close to the commute pain that citizens in cities around the world feel. We view helping to solve this problem as core to our mission and our commitment to our rider base. Just as skyscrapers allowed cities to use limited land more efficiently, urban air transportation will use three-dimensional airspace to alleviate transportation congestion on the ground. A network of small, electric aircraft that take off and land vertically (called VTOL aircraft for Vertical Take-off and Landing, and pronounced vee-tol), will enable rapid, reliable transportation between suburbs and cities and, ultimately, within cities.”
2) How AI Is Shaking Up the Chip Market
The article is pretty lean on the details but basically what they are saying is that deep learning algorithms require different computing function than traditional algorithms. This has led to solutions involving GPUs, FPGAs and custom processors. It is easy to over-state growth in demand for AI related hardware but it will largely be installed in cloud data centers because of the need for massive amounts of data and as a result much of it can be reused. It seems likely to me that GPUs are used because they were better than traditional processors for AI training, not because they are optimal. Most likely they will be displaced in short order with FPGAs or other purpose-built devices.
“Neural networks can learn tasks by analyzing vast amounts of data, including everything from identifying faces and objects in photos to translating between languages, and they require more than just CPU power. And so Google built the Tensor Processing Unit, or TPU. Microsoft is using a processor called a field programmable gate array, or FPGA. Myriad companies employ machines equipped with vast numbers of graphics processing units, or GPUs. And they’re all looking at a new breed of chip that could accelerate AI from inside smartphones and other devices.”
3) American jobs are going to robots, not China.
The great thing about blaming China for manufacturing job losses is that it makes it sound like you can do something about it. The fact is that automation is part of a long continuum of replacing labor with capital which has been going on since the start of the industrial revolution. It is not necessarily accelerating and it is not going to stop any time soon. Short of a successful Luddite movement there is nothing which can be done about it either.
“But research shows that the automation of U.S. factories is a much bigger factor than foreign trade in the loss of factory jobs. A study at Ball State University’s Center for Business and Economic Research last year found that trade accounted for just 13 percent of America’s lost factory jobs. The vast majority of the lost jobs — 88 percent — were taken by robots and other homegrown factors that reduce factories’ need for human labor. “We’re making more with fewer people,” says Howard Shatz, a senior economist at the Rand Corp. think tank.”
4) Microsoft Speeds Open Hardware
The push towards Open Hardware for data centers is a big problem for companies such as HP, Cisco, and others. Data centers are not only a big market but it is just a matter of a few years before these products appear in corporate networking rooms and carrier infrastructure. Cisco’s margins are about 60% and Hon Hai/Foxconn’s are about 7%. That’s a lot of margin for grabs.
“The current process of contributing data center hardware designs to the Open Compute Project (OCP) when they are production-ready is too slow, Microsoft argued in a blog posted Monday. It “delays the development of derivative designs, limits interactive community engagement and adoption, and slows down overall delivery,” wrote Kushagra Vaid, general manager of hardware for Microsoft’s Azure service. … The Project Olympus design specifies a new motherboard, server and rack. It defines a 945 x 441-mm server with room for two CPUs, 32 DDR4 DIMMs, 50G networking, eight M.2 NVMe SSD slots, three PCI Express x16 cards and a 12V power supply. … Facebook started the OCP effort. China’s largest data centers have a similar effort called Scorpio.”
5) The Inner Life of a Cell
I came across this video and thought I would share it. Having spent hours trying to recognize organelles (the equivalent of organs within cells) being able to visualize them in this animation is much better. It also shows the astounding complexity that results from a few billion years of evolution – especially since this is all very simplified.
6) Tesla unveils residential ‘solar roof’ with updated battery storage system
Another week, another crazy world-changing announcement out of Elon Musk. This time it is solar shingles – a technology which has been tried by a few dozen companies, including several with actual expertise in the roofing business. Of course there is a looming shareholder vote whereby Tesla shareholders will vote on whether it will acquire Musk controlled Solar City. Without a favorable outcome to that vote Solar City will probably have a financial crisis which could extend to his other holdings and with a favorable outcome the cash burn at the combined companies will reach staggering proportions but at least they’ll be afloat a bit longer. Not that that has anything to do with this. My friend Duncan Stewart addressed some of the issues with solar shingle here: https://dunstewart.wordpress.com/2016/10/31/will-we-all-have-roofs-that-double-as-solar-panels-in-the-future/ of course, all such discussion presupposes the product exists and will find its way to the market.
“Tesla will build and sell its own line of solar panels to combine with its battery storage system, the company announced at a press event at Universal Studios in LA, today. The system will allow residential homeowners to replace their entire roof with solar panels connected to an updated Powerwall 2 battery pack, making it much simpler for homes to be entirely powered by solar power. The roof is made of a textured glass tile with integrated solar cells. The roofs look “as good or better” than conventional roofs, according to Musk. They look like normal roofing tiles from the ground, but are completely transparent to the sun. The tiles are hydrographically printed, which, Musk says, makes each one a “special snowflake tile,” and no two roofs will be the same. “You can take any two roofs that look like that and they will be different — because they are different,” said Musk.”
7) ‘Any idiot can do it.’ Genome editor CRISPR could put mutant mice in everyone’s reach
This is yet another update on CRISPR, which I think is probably the greatest medical advance since they figured out how to sequence DNA cost effectively. CRISPR allows directed editing of genes which, as the article shows, should greatly increase the pace of genetic engineering. This article mainly focuses on “knock out” of genes which is an important way of figuring out what a particular gene does but its actual application will be much broader than that.
“Most investigators get their engineered mice from colleagues or by purchasing them from commercial outfits like JAX or academic-based repositories. Popular engineered mice, such as JAX’s immunodeficient NOD scid gamma strains, sell for as little as a few hundred dollars, but a custommade mutant could cost as much as $20,000. By making the engineering of mice far simpler and cheaper, CRISPR opens the way for more labs to do it themselves. “When you made knockout mice before, you needed some skills,” says Rudolf Jaenisch at the Massachusetts Institute of Technology (MIT) in Cambridge. “Now, you don’t need them anymore. Any idiot can do it.””
8) New Bionic Eye That Connects to The Brain Successfully Restores a Woman’s Sight
Saying this “restores sight” seems like an overstatement since the patient was simply able to see some points of light but what makes this interesting is that the device bypasses the optic nerve, unlike its prior device which stimulated retinal cells. That means that as the technology improves it may be possible to restore vision to people whose eyes or optic nerves have been destroyed.
“Researchers have been innovating methods of restoring sight to the blind through a number of different ways. Now, a company is closer to bringing another device to the public with vision impairment. Second Sight, a developer and manufacturer of implantable visual prosthetics has successfully implanted the Orion I, in their first patient. The Orion is a wireless visual cortical stimulator designed to restore sight to the blind. In a UCLA trial supported by Second Sight, a wireless multichannel neurostimulation system was implanted to a 30 year old patient’s visual cortex. The tests showed that the patient was able to perceive spots of light without any significant side effects.”
9) ESPN Loses 621,000 Subscribers; Worst Month In Company History
Despite the title this is not so much about ESPN as it is a story about the transformation of the delivery of video from Broadcast (primarily cable) to streaming (i.e. Netflix and “over the top” delivery). The impact on ESPN is highlighted due to the fact they entered into expensive long-term contracts for sports events whereas other cable providers can cancel shows. Some content providers such as HBO are offering a streaming option whereas AT&T (a cable provider) is offering a streaming cable alternative. Ultimately cable companies will simply become broadband providers but that sector will get a lot more competitive with 5G wireless. There is going to be a lot of disruption and opportunity due to these shifts.
“These 621,000 lost subscribers in the past month alone lead to a drop in revenue of over $52 million and continue the alarming subscriber decline at ESPN. Couple these subscriber declines with a 24% drop in Monday Night Football ratings this fall, the crown jewel of ESPN programming, and it’s fair to call October of 2016 the worst month in ESPN’s history. But this isn’t just a story about ESPN, the rapid decline in cable subscribers is hitting every channel, sports and otherwise. It just impacts ESPN the most because ESPN costs every cable and satellite subscriber roughly $7 a month, over triple the next most expensive cable channel.”
10) Computer Virus Cripples UK Hospital System
You start putting people’s lives at risk and all of a sudden computer security becomes serious. It is rather a pity that so little information is available regarding these sort of hacks: after all the hackers know exactly what they did so why don’t the victims publicise their system characteristics (Operating Systems, etc.) provide a post-mortem, etc.. All that keeping things quiet does is to allow similar systems to be exploited in the future. That might be good for job security but not so good for computer security.
“Citing a computer virus outbreak, a hospital system in the United Kingdom has canceled all planned operations and diverted major trauma cases to neighboring facilities. The incident came as U.K. leaders detailed a national cyber security strategy that promises billions in cybersecurity spending, new special police units to pursue organized online gangs, and the possibility of retaliation for major attacks. In a “major incident” alert posted to its Web site, the National Health Service’s Lincolnshire and Goole trust said it made the decision to cancel surgeries and divert trauma patients after a virus infected its electronic systems on Sunday, October 30.”