Thomas's Innovation Wrap #42

📱 A new short-form video contender, 💲 Warner Music's IPO, and ⚡ aircraft-destroying lasers

Greetings,

Here’s your weekly wrap of technology, innovation, and finance news.

🛰️ Space

SpaceX successfully launched two NASA astronauts into space, marking the first time a crewed space launch has been handled by a private company rather than a government agency. The launch paves the way for SpaceX to start offering private space flights, which should cost around $60 million per person.

SpaceX’s test flight won’t be over until the astronauts safely return to earth, and truly proving the Dragon is a safe and reliable transportation system will take multiple flights. But under SpaceX’s agreement with NASA, it can now use its vehicle to fly private missions, at a cost of around $60 million per person. Potential passengers might be astronauts from wealthy countries with new space programs, like the UAE; wealthy individuals, like the trip SpaceX already has under contract with the space tourism firm Axiom; or workers manufacturing unique goods in microgravity.

China is on track with its plans to send a rover to Mars in July. China also plans to launch its own space station above Earth by 2022.

This will be the first rover mission to Mars for China’s space program, and is one of the many ways that it’s aiming to better compete with NASA’s space exploration efforts. NASA has flown four previous Mars rover missions, and its fifth, with an updated rover called ‘Perseverance,’ is set to take place this years with a goal of making a rendezvous with Mars sometime in February 2021.

📱 App Economy

Competition in short-form video is increasing after Zynn jumped to the top of the US App Store last week. The TikTok clone is owned by Kuaishou, a well-funded video-sharing startup in China that competes with TikTok’s owner ByteDance. This is also the first time Zoom hasn’t been in the #1 spot in the US iOS Store since March 15.

ByteDance made $3 billion in net profit last year on over $17 billion in revenue, which was more than double the company’s $7.8 billion revenue in 2018. Some analysts estimate that ByteDance could fetch a valuation of between $150 billion and $180 billion. The company was founded in 2012.

ByteDance, led by Zhang Yiming, is becoming a viable rival to the dominant American online behemoths, Facebook Inc. and Alphabet Inc. Facebook unit Instagram brought in about $20 billion in advertising revenue in 2019, Bloomberg previously reported. Google said its video unit YouTube recorded $15.1 billion in ad sales last year.

Instagram is making it easier for influencers to make money on the platform.

Instagram on Wednesday announced two new ways for users with “creator” accounts to make money: ads on IGTV and badges for Instagram Live. The IGTV ads will start showing up next week, and Instagram will split the revenue, with at least 55 percent going to creators—comparable to YouTube. The company will also give fans the chance to sponsor their favorite creators and businesses with paid “badges” on Instagram Live videos, which cost less than $5 and place a small heart-shaped icon next to their name. Instagram is testing both features with a small group of creators (and advertisers, for the IGTV ads), before rolling them out more widely.

💲 Finance

Warner Music Group is listing this week after its owner, Access Industries, decided to sell 13.7% of the company to new investors. Warner Music is the third-largest music company in the world, after UMG and Sony Music, and is benefiting from the continued growth of music streaming.

The value of music assets has since skyrocketed. The music industry, decimated starting in 2001 by online piracy and the collapse of CD sales, has been on a tear for four years, with revenue from subscriptions to streaming services such as those offered by Spotify Technology SA and Apple Inc. turning around the fortunes of record companies. Global recorded-music revenue grew 8.2% last year to $20.2 billion, according to the International Federation of the Phonographic Industry, with streaming accounting for more than half of the total for the first time.

Digital health stocks like Livongo, Teladoc, and One Medical have been rallying as the pandemic changes how some health services are consumed, perhaps permanently.

Livongo founder and Executive Chairman Glen Tullman predicted that hospitals will increasingly start separating patients they need to see in-person versus those they can treat remotely. Services that provide home monitoring are taking off, he said, because they help medical teams determine whether an issue is urgent. For example, the company is now pulling data from more than 20,000 blood pressure checks per hour. 

Covid-19 “has been beneficial for our business, which is hard to say,” Tullman said. “You never want to benefit from something so terrible, but we are where we are.”

🏠 Working from Home

Sotheby’s will start holding live video-streamed auctions in June, starting with their NY Contemporary Art Evening Auction on June 29. Sales at last year’s NY Contemporary Art Evening Auction topped $341 million, with Francis Bacon’s Study For a Head selling for $50.38 million.

“It’s definitely a first,” said Mr. Barker in the conference call. “This will be the first time that I have taken to the rostrum in London in order to conduct a New York sale.”

The CEO of VMware, Patrick Gelsinger, expects that 50% to 60% of the company’s employees will work from home after the pandemic ends, up from 20% before the pandemic, and he doesn’t think that’s atypical. VMware had 31,000 employees in 169 offices worldwide at the end of January.

Some companies are building virtual replicas of their offices that their employees can meet in to recreate the more social water-cooler conversations you can miss on Zoom.

Gordon Willoughby, the chief executive of WeTransfer, said the platform helps provide the social experience of office life in the way that Zoom calls and Slack have replaced business meetings and desk-side chats. That is particularly valuable for recent hires, he said.

“Those of us who have been working at WeTransfer for a while are able to live off the social capital we built up from all those serendipitous meetings and chats before,” Mr. Willoughby said. “For new people, that’s much harder. The 3-D office is a really good way of maintaining that unplanned connectivity.”

⚡ Other Snippets

Amazon is in advanced talks to buy self-driving startup Zoox, which they could potentially use to create a more efficient delivery network. An acquisition of Zoox could also make Amazon a new competitor of Uber and Lyft.

And here’s the kicker: “Over time, this acquisition would also open the door for Amazon to potentially begin to compete in the ride sharing and food-delivery industries,” he writes.

Nowak theorizes that Amazon could offer discount ride-sharing to Prime members—a move he thinks would be “a meaningful driver of Prime growth, retention and pricing power.” He sees ride-sharing as a $60 billion bookings opportunity in the U.S. alone by 2023.

Google now lets merchants accept bookings for online services.

Google is also expanding its existing Reserve with Google service — which lets consumers book tickets and make appointments directly from Google — to support bookings for online services. Initial partners include booking services like Booksy, WellnessLiving, Zooty, and Regis, which provide a range of beauty and health services. So merchants working with any of these platforms will now be able to offer online appointments from inside Google and display details such as how to pay and which video platform they use.

The US successfully tested a laser weapon that can destroy small aircraft mid-flight.

Researchers in Australia have broken the record for the world’s fastest internet speed, clocking in at 44.2 terabits per second.

“There’s a bit of a global race on at the moment to get this technology to a commercial stage, as the micro-comb at its heart is useful in a really broad range of existing technologies,” Dr Bill Corcoran from Monash University, told The Independent.

“I’d guess that we could see devices like ours available to research labs in two to three years, and initial commercial use in about five years.”

Have a great weekend!

Thomas

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About Thomas Rice

Thomas Rice is the portfolio manager for the Perpetual Global Innovation Share Fund, based in Sydney, Australia. You can find him on Twitter at @thomasrice_au.

Thomas's Innovation Wrap #41

🛰️ Ready for liftoff, 💲 the Valley of Coronavirus, and 📱 a ByteDance deep dive

Greetings,

Here’s your weekly wrap of technology, innovation, and finance news.

🛰️ Space

SpaceX’s Crew Dragon spacecraft has arrived at its launch pad, ready for this week’s historic launch.

This historic launch will be a major milestone for commercial spaceflight. Crew Dragon's launch will be the first time since a new type of crew vehicle launched from the United States since NASA's space shuttle program began in 1981. It will also be the first crewed launch to orbit from the U.S. since the shuttle program ended in 2011. 

Image

The next era of space exploration is getting closer every day.

Last week NASA proposed the Artemis Accords, a set of rules that could govern how different organisations and nations use the Moon.

This directive raises a question: What, besides basic infrastructure to support astronauts, could be worth protecting on the moon? The answers from science are as uncertain as they are tantalizing, revolving largely around what resources may lie untapped in scarcely surveyed lunar regions. Many researchers are focused on the depths of the moon’s coldest, darkest craters, which are scattered around the sun-shy lunar poles. There water ice seems to exist in abundance, ripe for extraction and conversion into oxygen, potable water and even rocket fuel. Some envision mining that ice to create self-sustaining lunar colonies, as well as fuel depots in cislunar space for a wide number of uses. A few even speculate that the moon could eventually supply helium-3—an isotope deposited on its surface by solar winds—as a potent fuel for fusion reactors back on an energy-hungry Earth.

NASA is also seeking US citizens to participate in Social Isolation Studies ahead of missions to the Moon and Mars.

Participants will experience environmental aspects similar to those astronauts are expected to experience on future missions to Mars. A small international crew will live together in isolation for eight months conducting scientific research, using virtual reality and performing robotic operations among a number of other tasks during the lunar mission. The research will be conducted to study the effects of isolation and confinement as participants work to successfully complete their simulated space mission. Results from ground-based missions like this help NASA prepare for the real-life challenges of space exploration and provide important scientific data to solve some of these problems and to develop countermeasures.

Scientific American interviewed Jessica Watkins, a NASA astronaut and geologist who spent her PhD studying landslides on Mars and now has a shot at being one of the first people to step foot on the red planet.

💎 Artificial Intelligence

If you were the Air Force and you were developing drones that fly alongside your fighter jets, what would you call them? How about Skyborg drones? I can only assume the name is a negotiated settlement between Terminator and Star Trek fans on the naming committee.

The U.S. Air Force is finally pushing into the world of robot combat drones, vowing to fly the first of its “Skyborg” drones by 2023. The service envisions Skyborg as a merging of artificial intelligence with jet-powered drones. The result will be drones capable of flying alongside fighter jets, carrying out dangerous missions. Skyborg drones will be much cheaper than piloted aircraft, allowing the Air Force to grow its fleet at a lower cost.

WIRED wrote a detailed profile of iFlytek, China’s US$10 billion voice AI company.

Wang, of Human Rights Watch, says the fact that iFlytek builds “both benign, commercial applications as well as surveillance applications is precisely what makes them very problematic.” iFlytek's data from government projects is likely used to improve its consumer products—and vice versa. “They can train and perfect their AI systems on lots of samples, collected through not only their commercial but also through their military and policing applications,” she says. Every time a traveler speaks into the Translator, their words feed an algorithmic black box. All told, iFlytek's technologies promise to dramatically reshape life for people in China and elsewhere, by turning an individual's voice into both a crucial time-saver and an inescapable marker of their identity.

💲 Finance

Clubhouse, a social media app started in March 2020, now has 1,500 users (but very exclusive users) and is being valued at $100 million.

If you tuned into the Clubhouse app Monday night, you could have heard a lively discussion on how the coronavirus is affecting the prison population. Speakers included MC Hammer, political commentator Van Jones, writer and activist Shaka Senghor and venture capitalists Marc Andreessen and Ben Horowitz.

I have a confession: I love SoftBank earnings presentations, and this quarter didn’t disappoint. Here we see unicorns falling into the Valley of Coronavirus before some sprout new wings and reach new heights. During the quarter the company revalued WeWork to $2.9 billion, down from $47 billion a year ago, with SoftBank CEO Masayoshi Son defending the company’s poor investment performance by saying Jesus was also misunderstood and criticised.

Facebook is acquiring Giphy for $400 million, which should see Instagram natively integrate GIFs into comments.

Spotify has exclusively licensed Joe Rogan’s podcast in a multiyear deal worth more than $100 million. Andrew Wilkinson, the co-founder of Tiny and Supercast, has an interesting take on the value of Joe Rogan’s following.

A strategy of subsidising consumer purchases to build market share can lead to some interesting arbitrage strategies (DoorDash + pizza). Unfortunately, they don’t tend to scale well.

📱 App Economy

Turner Novak wrote a deep dive on the rise of TikTok and its parent company, ByteDance, which is worth a read.

ByteDance is the arguably the most serious competitor to Google, ever. It reaches consumers in the two largest middle classes in the world, China and the US, at a scale larger than any other digital advertising company. Like its Chinese counterparts, its seen success with monetization models beyond just advertising, which US-based competitors have struggled with to-date.

Kevin Meyer, who led Disney’s streaming efforts, has also just joined Bytedance to lead the company’s global expansion as Chief Operating Officer and CEO of TikTok.

“Bytedance and TikTok are enormously powerful opportunities,” Mr. Mayer said in an interview. “I think the business is growing rapidly and serving a need.”

Mr. Mayer said he would be growing Bytedance’s various businesses and seeking new opportunities.

“I will be looking at TikTok and looking at closely related and adjacent businesses that are large,” he said. “Gaming, music comes to mind. Video, writ large, is an interesting opportunity.”

💊 Health

Researchers at the Max Planck Institute for Intelligent Systems are developing tiny robots that can travel through rushing blood to deliver drugs (see their paper).

The team tested the robots in a simulation using mouse blood and synthetic channels lined with human endothelial cells – the kind of cells that line the inner walls of our blood vessels.

The robots were exposed to a mixture of cancerous and healthy tissue. The microrollers selectively attached to the cancer cells and were activated using UV light to release the doxorubicin.

Researchers at Nanjing University have developed a patch filled with oxygen-producing blue-green algae that heals skin wounds faster than other methods, at least in the mice they’ve tested it on so far (see their paper).

After six days, the wounds treated with the bacterial patch had shrunk by 45 per cent, compared to only 20 per cent for those treated with oxygen gas. The wounds treated with the bacterial patch also closed completely about three days earlier, and no side-effects were observed.

🛍️ Ecommerce

Facebook announced Facebook Shops, a new ecommerce feature that will allow businesses to list their products on Facebook and Instagram easily.

Ecommerce made up 16.2% of US retail spend in the March quarter according to an analysis of US Department of Commerce data. There’s still a long way to go.

Since March, the retail industry has been “turned on its head,” according to Colin Sebastian, managing director of equity research at Robert W. Baird & Co. He anticipates future quarterly ecommerce data from the Commerce Department will show a hefty jump in penetration as online sales abruptly shot up in April.

“The question we need to ask is how much of the incremental ecommerce market share is sustainable and how much local and in-store shopping consumers will resume once economies reopen,” Sebastian said. “Not all of the ecommerce market share gains will be retained, but we think a lot of it will be.”

🎮 Gaming

Spending on gaming hardware grew 163% in April 2020 compared to a year ago. Video game software sales grew 55% and video game accessories and game cards grew 49%.

Remember last year when Riot Games used their 10-year League of Legends anniversary to announce seven new games? Perhaps this started a trend. Last week Embracer Group announced they have 118 games under development and Take-Two Interactive announced they have 93 full titles planned for the next five years, but more is not always better.

In 2008, Electronic Arts published 60 games. By 2017, as the strategy shifted toward fewer and bigger titles, EA was publishing just eight games a year. And the magic of this transition: The 2017 games were generating far more revenue than the 60 games published in 2008.

Epic Games unveiled Unreal Engine 5 and it looks stunning. If you want an informed walkthrough, here’s a game engine developer talking through the demo. The engine will be released next year.

Game live-streaming grew dramatically in April due to the lockdown. Twitch was the biggest winner, but every platform grew.

While there were gains across the board, they weren’t distributed evenly. Twitch — the biggest live-streaming platform — saw the most growth in terms of sheer hours, with its hours watched jumping 50 percent between March and April and a full 101 percent year over year. It’s now up to 1.645 billion hours watched per month.

👓 Virtual and Augmented Reality

Sony is increasing its VR development efforts in the hopes that live concerts and sporting events via VR will help push the technology into the mainstream.

“The challenge is how we can conduct live [concerts] remotely that are both immersive and real time,” Mr Yoshida said on Wednesday. “We are experimenting with streaming of concerts using VR but the key is how we can offer the experience more smoothly.”

His remarks follow rapper Travis Scott’s concert held in late April inside the hugely popular online game Fortnite, which drew a record 12.3m live viewers and led to a fourfold increase in the streaming of the artist’s latest music video.

Apple has purchased NextVR, a startup which previously focused on broadcasting and producing live and recorded events in virtual reality, likely to augment Apple’s team working on augmented reality. 9to5Mac estimates the acquisition cost $100 million, which if true, would be less than the $115 million they had previously raised.

VentureBeat writer Jeremy Horwitz says holographic VR meetings just became real, referring to his experience using the Spatial collaborative workspace app on the Oculus Quest.

I’m not often at a loss for words, but as I re-entered the real world after my second holographic media briefing this month, I realized that I was struggling to speak or type. Mentally, the sensation was awe — my sincere belief that I had just experienced the future of remote work and meetings.

🧱 Advanced Materials

If you’re searching for a material with particular properties, a new algorithm by Skoltech researchers predicts the optimal combination of chemical elements to use among all possible combinations (see their paper).

This method can speed up the search for record-breaking materials and usher in new technological breakthroughs. Equipped with these materials, scientists can create brand new technologies or increase the efficiency and availability of old ones.

Avantium, a Dutch renewables chemical company, is developing plant-based bottles that can degrade within a year. Coca-Cola, Carlsberg, Danone, and others are backing the project, and these bottles could appear on supermarket shelves by 2023.

Avantium’s plant plastic is designed to be resilient enough to contain carbonate drinks. Trials have shown that the plant plastic would decompose in one year using a composter, and a few years longer if left in normal outdoor conditions. But ideally, it should be recycled, said Van Aken.

⚡ Other Snippets

More tech companies are embracing remote work. Facebook will soon allow current employees to apply to work remotely permanently, and Mark Zuckerberg expects half of the company’s employees to be working remotely in the next five to 10 years. Shopify will let its employees work from home indefinitely, as will Coinbase.

Zoom released their End-to-End Encryption Whitepaper. I’m convinced that Zoom will emerge from their security crisis as the most secure large-scale video conferencing platform in the world. Phase 1 of their plan, which implements end-to-end encryption (generating keys on the client rather than on the server), should be relatively straightforward to implement due to Zoom’s existing architecture which doesn’t need to decrypt video streams on Zoom servers in order to function.

Carnegie Mellon University researchers found that nearly half of the Twitter accounts discussing “reopening America” may be bots.

Tesla is planning to introduce a new lost-cost, long-life battery in its Model 3 sedan in China later this year or early next year. The new batteries are being jointly developed with Chinese battery giant CATL and could make the Model 3 cheaper than conventional gas-guzzling vehicles.

Taken together, the advances in battery technology, the strategy of expanding the ways in which EV batteries can be used and the manufacturing automation on a huge scale all aim at the same target: Reworking the financial math that until now has made buying an electric car more expensive for most consumers than sticking with carbon-emitting internal combustion vehicles.

My favourite zoomorphic robot, Spot, is now herding sheep in New Zealand. A dog is still a much cheaper option.

Have a great weekend!

Thomas

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About Thomas Rice

Thomas Rice is the portfolio manager for the Perpetual Global Innovation Share Fund, based in Sydney, Australia. You can find him on Twitter at @thomasrice_au.

Thomas's Innovation Wrap #40

🔒 Stopping WannaCry, 💊 reversing rat age, and 🛍️ live-streaming ecommerce

Hello,

Here’s your weekly wrap of technology, innovation, and finance news.

🔒 Cybersecurity

WIRED wrote a fascinating story about the hacker who stopped the 2017 WannaCry ransomware attack, @MalwareTechBlog AKA Marcus Hutchins, and how his past caught up with him.

A hacker ran a botnet of over 10,000 bots for almost eight years for the sole purpose of downloading anime videos.

Zoom acquired Keybase to help it build large scale end-to-end encryption into its video calls.

We believe this will provide equivalent or better security than existing consumer end-to-end encrypted messaging platforms, but with the video quality and scale that has made Zoom the choice of over 300 million daily meeting participants, including those at some of the world’s largest enterprises.

🤖 Robotics and Drones

Skylark Labs, a US startup, is testing drones in India to enforce social distancing.

Each drone is fitted with a camera and an AI that can detect humans within a range of 150 metres to 1 kilometre. If it spots people it can send an alert to police in the district located nearest to the sighting.

The system can also calculate the physical distance between two or more individuals and let the police know if people get too close to each other. The police can then go to the location and issue a fine if they see people breaching the rules.

Spot robots have been roaming Singapore parks to enforce social distancing.

The Spot robot will broadcast a recorded message reminding park visitors to observe safe distancing measures.

It is fitted with cameras, enabled by GovTech-developed video analytics, to help it estimate the number of visitors in the parks.

💊 Health

A preprint paper that has not been peer-reviewed claims that young blood plasma can reverse the age of rats by 54%. Harvard professor and lifespan researcher David Sinclair wrote a Twitter thread discussing whether the results are believable.

New research shows that gene therapy can help mice quickly build muscle while losing fat, even when they are on an extremely high-fat diet. Further studies are required to determine if it’s safe for mice over the longer-term.

With the paper's first author, Ruhang Tang, Ph.D., a senior scientist in Guilak's laboratory, Guilak and his research team gave 8-week-old mice a single injection each of a virus carrying a gene called follistatin. The gene works to block the activity of a protein in muscle that keeps muscle growth in check. This enabled the mice to gain significant muscle mass without exercising more than usual.

Even without additional exercise, and while continuing to eat a high-fat diet, the muscle mass of these "super mice" more than doubled, and their strength nearly doubled, too. The mice also had less cartilage damage related to osteoarthritis, lower numbers of inflammatory cells and proteins in their joints, fewer metabolic problems, and healthier hearts and blood vessels than littermates that did not receive the gene therapy. The mice also were significantly less sensitive to pain.

🛍️ Ecommerce

Selling online via live-streaming is taking off in China thanks to the pandemic.

But the pressure of the crisis—and the unique scale of China’s consumer base—provided the necessary catalyst. Taobao now has over 50,000 rural live-streamers and aims for at least 200,000 more within the year. Growers who had once sold 90% of their products offline have now flipped to selling 90% online. Live-streaming has not only helped the industry weather the crisis—it’s forged an entirely new way of business that is likely to continue long after the pandemic is over.

CNBC highlights the rise of Instacart and online grocery delivery.

💲 Finance

Slice has raised $43 million to help pizzerias go online by providing tech infrastructure, payment systems, customer service, marketing, and a unified app.

“Because of COVID-19, the restaurant landscape is rapidly evolving,” a Slice spokesperson told VentureBeat. “Local pizzerias with delivery are seeing 3 times the orders than pickup-only shops. We’re looking to roll this [Slice Delivery] out broadly in the very near future.”

Waymo raised an additional $750 million, increasing its March funding round from $2.25 billion to $3 billion. New investors include T. Rowe Price Associates, Perry Creek Capital, and Fidelity Management and Research company.

In a blog post, Waymo said the extended funding will too be invested into its workforce and building out its Waymo One ride-hailing service and Waymo Via cargo and goods logistics service.

🎮 Gaming

Newzoo believes that revenue from the 2020 global games market will grow 9.3% to $159.3 billion.

Niko Partners believes the PC and mobile games revenue in China will grow from $33.1 billion in 2019 to $46.7 billion in 2024 (+41%, or 7% per year).

Animal Crossing on the Switch sold 13.4 million copies in its first six weeks in major markets, making it the most successful Switch game launch to date.

Fortnite surpasses 350 million registered players. In April, those players spent 3.2 billion hours in the game.

💻 Chips and Computing

TSMC, the most advanced semiconductor manufacturer in the world, is being urged to set up a US plant as the US government becomes concerned about reliance on Taiwan. TSMC has said they’re actively evaluating suitable locations, but currently have no concrete plans.

“Taiwan, in particular, represents a single point-of-failure for most of the United States’ largest, most important technology companies,” said the report, written by Rick Switzer, who served as a senior foreign-policy adviser to an Air Force unit. He concluded that the U.S. needs to strengthen its industrial policies to address the situation.

💎 Artificial Intelligence

The Australian Air Force is trialling AI to assist with search and rescue operations with a model trained to recognise life rafts amid waves and whitewash.

[The Air Force using AI cameras] can cover so much more area than we can, in a very short space of time, so for us, for them to locate and then be able give us coordinates to it, it saves us hours and hours of searching.

Google launched Read Along, an Android app that uses AI to help children learn to read by providing verbal and visual feedback.

⚡ Other Snippets

Beyond Meat sales doubled last quarter and the company became slightly profitable as its customers stocked up on alternative meats as traditional food supply chains were disrupted.

Twitter says staff can now work from home permanently if they want to, telling TechCrunch:

We were uniquely positioned to respond quickly and allow folks to work from home given our emphasis on decentralization and supporting a distributed workforce capable of working from anywhere. The past few months have proven we can make that work. So if our employees are in a role and situation that enables them to work from home and they want to continue to do so forever, we will make that happen. If not, our offices will be their warm and welcoming selves, with some additional precautions, when we feel it’s safe to return. 

Google and Facebook have told employees to prepare to work from home for the rest of 2020.

1.8 million people are escaping coronavirus and politics by pretending to be ants on Facebook — fAntastically silly. 🐜

Have a great week & weekend.

Thomas

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About Thomas Rice

Thomas Rice is the portfolio manager for the Perpetual Global Innovation Share Fund, based in Sydney, Australia. You can find him on Twitter at @thomasrice_au.

Thomas's Innovation Wrap #39

🤖 Moxie the childhood robot, 💊 fighting viruses with llama blood, and ⚡ offline replay during sleep

Greetings,

Here’s your weekly wrap of technology, innovation, and finance news.

💎 Artificial Intelligence

Scientists at Salesforce have developed The AI Economist, a system that tries to identify the optimal tax policies for a simulated economy using a deep reinforcement learning framework. The simulated economy that they try to optimise is relatively simple, at least for now.

Google released Meena, its state-of-the-art chatbot, back in February. Now Facebook has leapt ahead with Blender, a chatbot that “blends a diverse set of conversational skills — including empathy, knowledge, and personality — together in one system.” According to the Facebook AI Blog, 67% of evaluators found Blender sounded more human than Meena, and 75% said they’d rather have a long conversation with Blender than with Meena. Poor Meena.

🤖 Robotics and Attack Drones

Embodied, a LA startup started by a USC robotics professor and the former CTO of iRobot, has unveiled a childhood robot called Moxie. If the Moxie promotional video is accurate, then it does look pretty impressive though I’m not sure if it’s needed. The robot will cost you $1,499 and reservations are now open.

Boeing unveiled an Australian-designed attack drone prototype, the Loyal Wingman, that uses AI to target enemies. The prototype is now starting ground testing, with taxi tests and flight tests due later this year. Boeing expects mass production to begin by the middle of the decade.

A large jet-like drone in a hangar.

💻 Chips and Computing

Amazon Web Services (AWS) quarterly revenue increased by 33% on last year and topped $10 billion for the first time.

If you’re interested in how distributed computer systems work, this interview with NVIDIA’s CEO Jensen Huang provides an excellent overview of datacentre architecture and why NVIDIA’s acquisition of Mellanox last year made sense.

And the combination of Mellanox and Nvidia makes the most sense because we drive computing to the limits more than anybody else and we expose the weaknesses of all of the other elements of the computer more severely and more quickly than anybody else. And if we can solve issues, we solve them for everybody.

A new AI chip can perform image recognition tasks in nanoseconds which is far faster than existing sensors, but it has the drawback of currently only working on tiny images. The researchers believe that scaling it up to work on much larger sizes is straightforward (see their paper in Nature).

A sensor that captures and processes an image at the same time, without converting or passing around data, makes image recognition much faster using much less power. The design, published in Nature today by researchers at the Institute of Photonics in Vienna, Austria, mimics the way animals’ eyes pre-process visual information before passing it on to the brain.

🛰️ Space

NASA wants to put astronauts on the Moon again by 2024 and has awarded contracts worth $967 million to three companies (Blue Origin, SpaceX, Dynetics) to begin study work on lunar landers over the next ten months. After ten months, NASA will pick one or more winners to start building the spacecraft.

NASA also entered into a partnership with Virgin Galactic to help develop supersonic point-to-point air travel. Any financial terms weren't disclosed.

China’s space ambitions are also growing. The country successfully launched its largest rocket into space for the fourth time, this time carrying an uncrewed trial version of its next-generation spacecraft. China plans to use the rockets to bring heavy modules into space that will be used to assemble a low earth orbit space station by 2022.

This isn’t news, but I finally started watching The Expanse in April and finished the last episode of Season 4 a few days ago — it was great! 😃🚀

💊 Health

Biologists have invented a new way to fight viruses with llama blood and molecular superglue. Llamas (and camels, and sharks) are special because they produce mini-antibodies that other animals (including humans) do not.

All untreated mice infected with Rift Valley fever virus died within 3 days, but more than 20% of the rodents that received a trio of linked antibodies were still alive after 10 days. The approach also worked against Schmallenberg virus: One antibody combination spared all of the mice, whereas control animals perished within 5 days, the scientists report in the journal eLife.

A new machine can keep livers alive outside the body for up to a week, which is enough time for the liver to start repairing itself. This could help patients with liver cancer (and other transplant recipients over time), but further studies are needed to assess any long-term effects of the machine.

“We decided to [study the livers] for one week because this is the amount of time you need for a liver to regenerate” in patients who have had part of the organ removed, says Pierre-Alain Clavien, head of surgery and transplantation at University Hospital Zurich and senior author on a paper describing the research. He says this preservation technique could especially benefit some liver cancer patients, who could have noncancerous portions of their own livers kept alive for later reimplantation to circumvent problems related to tissue rejection.

Drinking coffee appears to cause epigenetic changes to your DNA which could explain its numerous health benefits.

The more cups of coffee a person drank per day, the more likely they were to have altered levels of methyl groups at 11 particular DNA sites. This was still true after age, body mass index, smoking, alcohol consumption and other factors that may have influenced the results were taken into account.

The methyl groups tended to be attached to genes that play roles in digestion, processing harmful chemicals and controlling inflammation.

🏠 Working from Home

A survey by IBM found that 54% of 25,000 adults polled would like to be able to primarily work from home, 75% would like the option to work from home occasionally, and 40% of respondents felt strongly that their employer should offer opt-in remote work options.

The Atlantic argues that work from home is here to stay.

Many Americans were already couch laborers before this all started. Prior to the coronavirus outbreak, about 29 percent of college graduates worked from home at least some of the time. Even once coronavirus restrictions are eased, Bloom and others expect the proportion of Americans working from home to grow. “I could see it being totally standard for jobs that can be performed at home to allow two days at home” per week, he told me.

Warren Buffett questioned the future of offices at Berkshire Hathaway’s AGM, while also mentioning that Charlie Munger is spending his days on Zoom.

“The supply and demand for office space may change significantly,” Mr. Buffett said. “A lot of people have learned that they can work at home, or that there’s other methods of conducting their business than they might have thought from what they were doing a couple of years ago. When change happens in the world, you adjust to it.”

Okta’s 2020 Business @ Work (from Home) report suggests that Zoom, Palo Alto Networks, and Cisco are the winners in the remote work boom.

Zoom isn’t free from competition. Google made its videoconferencing service Google Meet free until the end of September while also incorporating it into Gmail. Microsoft unveiled that video conferencing on Teams saw more than 200 million participants in a single day in April, which compares to Zoom’s 300 million daily meeting participants by April 22.

A Japanese aquarium under lockdown asked people to video call with its lonely eels.

⚡ Other Snippets

Microsoft is working on augmented reality robot overlays that can bring virtual meetings to life.

A new camera developed at Caltech can capture 70 trillion frames per second which marks a new record.

Now seven times faster than that, Wang and his team believe that the CUSP technology could be used to probe the ultrafast world of fundamental physics and help create smaller and more sensitive electronics.

"We envision applications in a rich variety of extremely fast phenomena, such as ultrashort light propagation, wave propagation, nuclear fusion, photon transport in clouds and biological tissues, and fluorescent decay of biomolecules, among other things,” says Wang.

A new study finds that your brain replays waking experiences during sleep, called “offline replay”. This study is the first study that has directly observed this effect in humans.

Offline replay is thought to make memories stronger because it gradually incorporates them into the existing knowledge base in the neocortex — without disrupting the information that's already there.

Practically, the study means sleep may be even more important than previously thought.

Disney+ now has 54.5 million subscribers as of May 4, which is up from 33.5 million as of March 28. The company originally targeted 60 million to 90 million subscribers by the end of its 2024 fiscal year.

Gaming content on YouTube and Facebook is growing significantly as people stay home according to a report from Tubular Labs with plenty of charts.

Have a great week.

Thomas

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About Thomas Rice

Thomas Rice is the portfolio manager for the Perpetual Global Innovation Share Fund, based in Sydney, Australia. You can find him on Twitter at @thomasrice_au.

Thomas's Innovation Wrap #38

🏠 WFH post-COVID, ▶️ cinema release windows, and 💊 brain implants to help paralysis

Greetings,

Here’s your weekly wrap of technology, innovation, and finance news.

👓 Virtual and Augmented Reality

Supernatural is a new VR-based fitness program that looks like Beat Saber with a focus on fitness. The service has a monthly fee ($19) and delivers new workouts every day with commentary from a trainer as you go.

You’d guess interest in VR workouts might lag once gyms reopen. But think back to all the workouts you skipped because it was too rainy or cold out or laziness overcame you. Supernatural is so fun and convenient it might persist. Even when your motivation to head to the gym flatlines, you can still get that heart rate up by swinging at orbs while flying over your daily volcano.

Augmented reality startup Magic Leap is laying off roughly 1,000 employees, or half of their people, as they change their focus from consumer to enterprise.

Magic Leap, founded in 2011, unveiled a $2,300 headset in 2018 after years of secretive work and has pledged to deliver technology rivaling television or the telephone in societal impact. Sales never took off and there were dozens of job cuts late last year, The Information previously reported.

▶️ Streaming

Who needs cinemas when you have premium video-on-demand (PVOD)? Universal Pictures released their latest animated film, Trolls World Tour, on PVOD and found it made more money than Trolls did when it was released in cinemas in 2016. The success of Trolls World Tour has prompted Universal Pictures to openly consider simultaneously releasing future movies on PVOD and in cinemas, which has prompted cinema chain AMC Entertainment to say they’ll no longer play any movies from the studio.

“The results for ‘Trolls World Tour’ have exceeded our expectations and demonstrated the viability of PVOD,” Mr. Shell said. “As soon as theaters reopen, we expect to release movies on both formats.”

For studios, the prospect is especially alluring because they retain about 80% of the digital rental or purchase fee—compared with about 50% of box-office sales.

🏠 Working from Home

When the world returns to normal, what will normal look like? Rich Barton, the CEO of Zillow, has changed his mind about support for more flexible work arrangements and I imagine he’s not alone there.

A survey by CNBC and Change Research found that 24% of respondents would like to work more from home once the pandemic ends.

Once the economy reopens, 24% say they’d like to work either entirely or more from home compared to how they worked before, while 55% plan to head back to the office and 20% are not sure.

An increase of hundreds of thousands, or even millions, of people who shift to remote work would have major repercussions across the broader economy. For example, if businesses decided to save money by renting or buying less commercial office space as a larger percentage of their employees work from home, that could translate into hundreds of millions of dollars in losses for builders and developers.

Zoom now has 300 million daily active participants using the service (as of 22 April), up from 200 million at the end of March.

Facebook and Google are working hard to improve their products to try to capture some of this increased usage.

Yet Zoom may already be too ingrained for Silicon Valley’s giants to dislodge.

Late last month, Philipp Schindler, Google’s chief business officer, held a videoconference with thousands of the search giant’s employees using Google Meet, three people who attended the call said. During the session, one employee asked why Zoom was reaping the biggest benefits even though Google had long offered Meet.

Mr. Schindler tried placating the engineer’s concerns, the people said. Then his young son stumbled into view of the camera and asked if his father was talking to his co-workers on Zoom. Mr. Schindler tried correcting him, but the boy went on to say how much he and his friends loved using Zoom.

Google has made Google Meet free until September 30.

Facebook announced they’ll start rolling out Messenger Rooms, a video chat app that supports up to 50 people at once. The app features open rooms that your social group can drop in and drop out of, similar to real-world social encounters.

🔬 Biology

Scientists at the Army Medical University in China have developed a pocket-sized phone-powered device that can test DNA in blood samples for genetic conditions.

Overall, the accuracy of the device was about 97 per cent when compared with standard laboratory methods. The researchers say the device could potentially be modified to identify RNA as well, which would be useful for detecting RNA viruses like the covid-19 virus responsible for the coronavirus pandemic.

💊 Health

A paralysed man can now move his hand and has regained a sense of touch after getting a chip implanted in his brain in 2014. He (and researchers) have made significant progress since 2014, and he can now play Guitar Hero, swipe a credit card, and do about 20 different hand grips. A paper detailing the approach was published in Cell last week.

To make it happen, Ganzer and his colleagues used an elaborate setup that connects Burkhart’s brain to a computer. The chip in his motor cortex sends electrical signals through a port in the back of his skull, which is delivered through a cable to a nearby PC. There, a software program decodes the brain signals and separates them into signals corresponding to intended motions and signals corresponding to a sense of touch. The signals representing intended motions are routed to a sleeve of electrodes wrapped around Burkhart’s forearm. The touch signals are routed to a vibration band around his upper arm.

Telemedicine has grown significantly with people staying at home. Will that lead to greater adoption when the world returns to normal?

The health system Ascension, with facilities in 20 states, says its online care increased nearly 2,000%, to about 10,000 visits in March from 500 in earlier months. CommonSpirit Health, which operates in 21 states, says its virtual care doubled about every seven days, up to 33,000 televisits for the week ending April 3. The Sanger Heart and Vascular Institute, part of North Carolina-based Atrium Health, says it moved 95% of its outpatient office visits to the cloud, for about 450 virtual patients a day.

💻 Chips and Computing

One of the most complex and time-consuming stages of the chip design process is determining chip placement. Google has now designed an AI to do this job which they describe in a blog post and pre-print paper.

“Basically, right now in the design process, you have design tools that can help do some layout, but you have human placement and routing experts work with those design tools to kind of iterate many, many times over,” Dean told VentureBeat in an interview late last year. “It’s a multi-week process to actually go from the design you want to actually having it physically laid out on a chip with the right constraints in area and power and wire length and meeting all the design roles or whatever fabrication process you’re doing,” said Dean. “We can essentially have a machine learning model that learns to play the game of [component] placement for a particular chip.”

🤖 Robotics

Social distancing is likely accelerating adoption of collaborative robots in factories and warehouses.

“If you have to space out the people throughout your facility differently than you used to for manufacturing, or even picking, then you can't keep the automation in the same places,” says Melonee Wise, CEO of Fetch Robotics, which makes wheeled robots capable of ferrying items around factories and warehouses.

Fetch is working with a large US ecommerce company to reprogram its robots to adapt to staggered shifts with fewer workers to allow for social distancing. It is also working on versions of its robots that can autonomously disinfect workplaces.

💎 Artificial Intelligence

A survey of 1,004 business leaders finds that customer service is the most active department where AI is being deployed today.

⚡ Other Snippets

Infrared-reflecting paint could keep buildings cool and help save on electricity (and help save the planet).

Usually black paint absorbs heat, but painting an object with a black version of this new coating kept it about 16°C cooler than when an object painted with commercial black paint was exposed to the same amount of sunlight.

The Trump administration’s 2021 budget request contains $237 million in funding to support quantum information research.

“That level of funding will enable us to begin to develop the groundwork for sophisticated, practical and high-impact quantum networks,” says David Awschalom, a quantum engineer at the University of Chicago. “It’s significant and extremely important.”

Social networks are splintering as people spend more time in niche communities centred around shared interests.

It’s also clear that niche platforms have been siphoning away attention from the world’s largest social-networking company. “The social-networking world used to be centered on Facebook and it’s now becoming splintered,” said Michael Wolf, chief executive of technology-consulting firm Activate. “They’re not trying to become your everything social network. They don’t want to be Facebook.”

The average person will use 10 social networks daily by 2023, up from six currently, according to Activate. Nearly 30% of adults aged 18 to 24 already use 10 or more, the company said.

Have a great week and weekend.

Thomas

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About Thomas Rice

Thomas Rice is the portfolio manager for the Perpetual Global Innovation Share Fund, based in Sydney, Australia. You can find him on Twitter at @thomasrice_au.

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