The Geek’s Reading List – Week of March 31 2017
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!
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1) Uber suspends self-driving car program after Arizona crash
It turns out that the collision, which was the worst ever for a self-driving car (except the Tesla fatalities which appeared to happen because the drivers thought they were in a self-driving car). Nonetheless, there are dozens of examples caught on video of Uber’s self-driving cars doing things like going through red lights, a number of which were caught on camera. In this case the car sped through a yellow light and hit a car making a left hand turn into its lane. Based on Uber’s track record I would not be surprised if next time it’s even worse.
“Uber Technologies Inc suspended its pilot program for driverless cars on Saturday after a vehicle equipped with the nascent technology crashed on an Arizona roadway, the ride-hailing company and local police said. The accident, the latest involving a self-driving vehicle operated by one of several companies experimenting with autonomous vehicles, caused no serious injuries, Uber said. Even so, the company said it was grounding driverless cars involved in a pilot program in Arizona, Pittsburgh and San Francisco pending the outcome of investigation into the crash on Friday evening in Tempe.”
2) SpaceX Falcon 9 rocket relaunch: start time, live stream, and what to expect
I give them credit: they managed to do it. The thing is, SpaceX’s record is already pretty poor when it comes to destroying payloads and the customer is keen on not destroying payloads because they are very, very expensive and it usually takes a long time to replace them. So if the price is 30% lower but the risk is higher customers have to decide if they want to be penny wise and pound foolish.
“Elon Musk’s private spaceflight company is going to take another swing at history today: for the first time, SpaceX plans to take a Falcon 9 rocket that successfully launched and landed in April 2016 and try to launch it to space once again. … Ideally, this is a proof-of-concept for reusing rockets, one of Elon Musk’s main goals for SpaceX. By recovering each rocket after launch instead of discarding it, Musk hopes to cut the cost of a rocket launch by millions of dollars. This could eventually allow SpaceX to offer launches at a 30 percent discount, which is a huge advantage in the tiny but hyper-competitive space launch market.”
3) Paralysed man moves arm using power of thought in world first
This technology is still in its early stages but it is evolving rapidly. It only works in the lab but that is to be expected given that researchers lack the expertise and financial resources to miniaturize the systems fully. I imagine the impact on the life of those affected is profound despite the limited capabilities they demonstrate here. Expect big things over the next 10 years.
“A man who was paralysed from below the neck after crashing his bike into a truck can once again drink a cup of coffee and eat mashed potato with a fork, after a world-first procedure to allow him to control his hand with the power of thought. Bill Kochevar, 53, has had electrical implants in the motor cortex of his brain and sensors inserted in his forearm, which allow the muscles of his arm and hand to be stimulated in response to signals from his brain, decoded by computer. After eight years, he is able to drink and feed himself without assistance.”
4) ESPN Has Seen the Future of TV and They’re Not Really Into It
A lot of the subscriber losses at ESPN are actually people “cutting the cord” and dropping cable service in general. Some – perhaps many – of those may actually want ESPN but the company’s revenue stream, like many cable companies, is based on them getting $7 per cable subscriber whether the subscriber wants ESPN or not. On a “pick and play” basic, fees would be more like $30/subscriber or more. I find it strange Google has bundled EPSN with their streaming service and I’d be surprised if all other such services do so, especially since a major reason for “cutting the cord” is the high prices due to the “take it or leave it” cable TV pricing model.
“As subscribers leave the network, and often cable altogether, ESPN is stuck with rising costs for the rights to broadcast games. Programming costs will top $8 billion in 2017, according to media researcher Kagan. Most of that money goes to rights fees through deals that extend into the next decade. Last year profits from Disney’s cable networks, of which ESPN is the largest, fell for the first time in 14 years. The dip was small, about half a percent, but nonetheless alarming. Rich Greenfield, a media analyst at BTIG Research, says ESPN has been “over-earning,” with cable customers paying for the channel as part of their subscription bundle, whether they watch it or not. “It’s pretty clear that the years of over-earning are going to end,” says Greenfield, who’s made a name for himself as an ESPN naysayer. “The question is does it end slowly or fast.””
5) Smartphones may be to blame for unprecedented spike in pedestrian deaths
When I saw the headline I thought for a moment somebody finally realized that “distracted walking” is dangerous, but, alas, this is another article about distracted drivers. Distracted driving is probably a cause of some or even most of the fatalities but I’ve come close to running down idiots crossing the street while looking at their phones more than once.
“A new report estimates that in 2016, the United States saw its largest annual increase in pedestrian fatalities since such record keeping began 40 years ago. … The Governors Highway Safety Association estimated there were 6,000 pedestrian deaths in 2016, the highest number in more than 20 years. Since 2010, pedestrian fatalities have grown at four times the rate of overall traffic deaths. “The why is elusive. We don’t know all the reasons,” Retting said. “Clearly lots of things are contributing. But not one of these other factors have changed dramatically.” The thing that has changed dramatically in recent years is smartphone use. The volume of wireless data used from 2014 to 2015 more than doubled, according to the Wireless Association.”
6) Intel Warns Partners: Expect Tight SSD Supply Through 2017, With Shipment Priority On Data Center SSDs
It’s not real news that memory prices (DRAM and flash)have “firmed” as they do every 5 years or so. This cycle is a bit different because it includes, and is associated with demand for both DRAM and flash at the same time. To me this is the ultimate “head fake” for the Hard Disk industry: SSD shortages means HDD sales are collapsing as quickly as expected and stock have rallied strongly. The thing is, whatever you read, memory prices are going to start trending down at some point in the future and when that happens SSD prices will essentially collapse, taking the HDD industry with them.
“The SSD shortage stems from a combination of fast-growing demand for SSDs as the per-gigabyte price falls closer to that of slower-performing spinning hard disks, and a transition by manufacturers of NAND memory, the key component in SSDs, toward 3D NAND technology, according to multiple industry sources. … The delays are already impacting shipments to major customers, the solution provider said. “One of our government customers wants servers with SSDs but has been delayed multiple times,” the solution provider said. “We checked with a major competitor, and found the same. So we feel this is an industrywide challenge.” The solution provider said about 50 percent of new sales have shifted from hard drive-based storage to SSDs. “New technologies like deduplication and compression are helping drive demand,” the solution provider said. “And hyper-converged infrastructure works better with all-flash architectures.””
7) Speck-Size Computers: Now With Deep Learning
There are two main phases to deep learning: training and doing. Right now both are done at data centers due to the computational demands of dealing with as deep learning array. That will change and “doing” will eventually done by the client (i.e. a smartphone or PC). It may take a while but the current GPU approach – which has stoked so much excitement around NVIDIA – will be displaced by purpose built accellerators.
“Another micromote they presented at ISSCC incorporates a deep-learning processor that can operate a neural network while using just 288 microwatts. Neural networks are artificial intelligence algorithms that perform well at tasks such as face and voice recognition. They typically demand both large memory banks and intense processing power, and so they’re usually run on banks of servers often powered by advanced GPUs. Some researchers have been trying to lessen the size and power demands of deep-learning AI with dedicated hardware that’s specially designed to run these algorithms. But even those processors still use over 50 milliwatts of power—far too much for a micromote. The Michigan group brought down the power requirements by redesigning the chip architecture, for example by situating four processing elements within the memory (in this case, SRAM) to minimize data movement.”
8) We need a New Deal to address the economic risks of automation
Fears over automation is stoking anxiety among millennials, pretty much as it has done for every generation since the start of the industrial revolution. There is nothing significantly different about now vs prior “generations” of automation if you bother to investigate the subject. Where are all the farm workers who have been unemployed by tractors and combines; machinists unemployed by NC milling machines; bank tellers unemployed by ATMs; and keypunch operators unemployed by terminals and PCs? Automation means greater productivity and it is a major reason for improvements in the standards of living in the industrialized world since the 1800s. There is absolutely no difference between all hose prior cycles and what will happen in the next 20 or 100 years.
“There’s been downward pressure on jobs since the Industrial Revolution due to leaps in productivity brought about by human ingenuity and lucky discoveries. This has accelerated since the ’80s with the mass adoption of computers, but the market has more or less kept up, creating new openings to fill the eradicated ones, albeit not in the same places (coastal cities have gained, Rust Belt areas have lost out). However, we have a tsunami on the horizon: automation using AI. It will place intense downward pressure on employment, and threatens to catch a generation (really, three generations) off guard, with unemployment levels higher than the Great Depression.”
9) IBM Bets The Company On Cloud, AI And Blockchain
Based on IBM’s financial performance and aptitude for blowing money on acquisitions, I’d say as gamblers they are not so good. While they have great engineers their management can’t seem to monetise what they have. Even their engineering talent is probably sparse as new graduates do look upon IBM as the sort of place they want to work. With respect to cloud services and AI, well, they aren’t the only name in the games and it is hard to imagine companies who are not IBM customers in the first place going to IBM for this. That is doubly true for startups.
“IBM Chairman and CEO Ginni Rometty laid out IBM’s strategy at a packed keynote. “The IBM Cloud is the platform for the next era of business,” Rometty said, expressing the central theme of the keynote. The IBM Cloud combines the Cloud Foundry-based Bluemix Platform-as-a-Service environment with SoftLayer, IBM’s public Infrastructure-as-a-Service Cloud. But the key to IBM’s Cloud strategy is its reliance on AI. “IBM Cloud is cognitive at the core,” according to Rometty. “You’re going to want a cloud that has a full range of cognitive capabilities.””
10) ‘Supermassive’ black hole rocketing through space at five million miles an hour, Nasa reveals
This is pretty amazing if for nothing more than the amount of energy involved to move a mass as big as a supermassive black hole at this speed. The article explains how that happened, but it is not any less amazing.
“Their observations confirmed the Hubble finding. They also helped pin down the black hole’s mass (equal to that of a billion suns) and the speed at which the gas around it was travelling (4.7 million mph). Meanwhile, the Hubble image offered a clue about what dislodged the black hole from its galaxy’s centre. The host galaxy bore faint, arc-shaped features called tidal tales, which are produced by the gravitational tug-of-war that takes place when two galaxies collide. This suggested that galaxy 3C 186 had recently merged with another system, and perhaps their black holes merged too.”