Hello, hello! 👋🏻👋🏻
Welcome back to another edition of Tidbits covering all the recent things worth talking about in business, media, and technology.
🗺 World Affairs + Geopolitics
#1 Biden Administration Faces Growing GOP Opposition on China Bill
Biden administration officials are attempting to stem growing Republican opposition to high-priority legislation aimed at bolstering U.S. competitiveness with China and aiding domestic semiconductor production.
The measure is a priority for President Joe Biden, but progress had been stalled since the Senate passed its own version of the legislation with bipartisan support last June. House Democrats this week unveiled their latest iteration in an attempt to get negotiations started on a measure that can pass Congress in the coming weeks.
But House Republicans, including those who sit on committees that have jurisdiction over many of the provisions, came out forcefully against the measure. They criticized House Speaker Nancy Pelosi and her caucus for proposing a hyper-partisan bill and shutting them out of the negotiating process.
They say that too much of the measure is devoted to climate change and not enough to stronger export controls that they consider necessary to prevent American technology from falling into the hands of the Chinese government.Source: Bloomberg
Seems like the US isn’t going to get anything done on something that is supposedly “very important” according to everyone in government.
#2 Biden Visits Pittsburgh Bridge Collapse, Vows More U.S. Investment
President Joe Biden stopped to look at a Pittsburgh bridge that collapsed just hours before he arrived for a scheduled visit to the city on Friday, dramatically underscoring the urgency of his drive to rebuild the United States’ creaky infrastructure.Source: Reuters
Similar to the semiconductor situation above, the US government continues to speak about how important infrastructure is for the competitiveness of the country, yet it’s not clear if anything will get passed.
How ironic is it that a bridge collapses the day Biden is scheduled to show up?
These are problems that China does not have. These are problems that not even European allies have.
🤑 Economics + Markets
#3 Apple Posts Highest-Ever Quarterly Earnings in Sign It Tamed Supply Crisis
Apple Inc. shares gained the most since 2020 after quarterly results sailed past Wall Street estimates, marking a victory against a supply-chain crunch fueled by the pandemic and chip shortages.
The surprisingly strong results from Apple suggest that fears of supply upheaval were overblown. Apple Chief Executive Officer Tim Cook had warned late last year that shortages could cost the company more than $6 billion in sales during the all-important holiday period. But the tech giant navigated the crisis and benefited from a flood of new products, including the iPhone 13, Apple Watch Series 7 and updated Macs.
The company also said there are now 1.8 billion Apple devices currently in use, up 300 million from two years ago. And it has 785 million paid Apple and third-party subscriptions on its platform, up from 745 million reported in the previous quarter.Source: Bloomberg
The market was having a pretty tough week, but the surprisingly strong results from Apple on Thursday evening seemed to help bring back some market enthusiasm on Friday.
These are truly some stunning numbers. Almost 2 billion active devices (perhaps 1.3-1.5 billion unique users?). And almost 800 million subscriptions. In comparison, Netflix is the world’s largest subscription company and only has ~220 million subscribers. While Apple’s 785 million number includes 3rd party subscriptions (that are paid through the Apple App Store), I doubt there are that many 3rd party subscriptions included in that number. Netflix would be the largest potential 3rd party contributor, but I would be surprised if more than 50 million of Netflix’s subscriptions were paid through the Apple App Store.
#4 Market Crash Hands Defeat to Traders Who Warred With Wall Street
Exactly one year ago today, Chris Perrotta joined a revolution on Wall Street: He bought one of those crazy meme stocks — and went on to make a small fortune.
Today Perrotta, like countless other amateur traders who pushed stocks “to the moon” and challenged the pros during the early 2021 mania, is watching the old dreams of a new Wall-Street order collapse around him.
Sure, a few retail investors made millions of dollars. Some quit their jobs. Others paid off their student loans. But with inflation running at the fastest pace in almost four decades, the Federal Reserve is forecast to tighten policy — meaning there’ll likely be less money sloshing around the economy that can go into shares of brick-and-mortar video game retailers or struggling movie-theater chains. Some comrades had long ago moved on to the next frontier: Cryptocurrencies and NFTs in the metaverse.Source: Bloomberg
Fascinating retrospective on retail meme stonks mania and the evolution of that movement. The party shifted over to crypto a couple of months ago and those that stayed behind in stonks have had a rough time. But in the past few weeks, crypto hasn’t been that hot either. Is this the end of retail mania or is this just a regrouping before the next insurgency?
👻 Cryptocurrencies + NFTs
#5 Scammers Are Creating New Fraudulent Crypto Tokens And Misconfiguring Smart Contract’s To Steal Funds
Back in November, Check Point Research (CPR) alerted crypto wallet users of a massive search engine phishing campaign that resulted in at least half a million dollars being taken in a matter of days. In this article Check Point Research (CPR) will demonstrate how hackers are creating new tokens, luring people to buy these tokens, and then ‘rug pulling’ all the money from a smart contract. In addition, CPR detected that the coin usually isn’t made to scam people, but a misconfiguration within smart contract functions helps hackers steal money.
Some tokens contain a 99% buy fee which will steal all your money at the buying phase.
Some of the tokens don’t allow the buyer to resell (SQUID Token) and only the owner may sell.
Some tokens contain a 99% sell fee which will steal all your money at the selling phase.
Some allow the owner to create more coins in his wallet and sell them.
And some others are not malicious but got security vulnerabilities in the contract source code and lose their funds to hackers that exploit the vulnerabilities.Source: Check Point Research
Crypto is built on code, and the average person will never have enough understanding of software code to know whether a crypto coin or a smart contract will do what a promoter says it will do. So far, crypto seems unable to escape the trust we need in people in order for society to operate…arguably, crypto creates more trust issues because so few people can look at it and understand what it all means.
In a way, it’s like Medieval Europe when a very small portion of society (the Clergy) could claim that the Bible is the all important source of truth, but only they have the power to know what the book actually says because it is written in a language few could read (Latin).
#6 China Introduces State-Backed NFT Platform Unlinked To Cryptocurrencies
China’s state-backed Blockchain Services Network (BSN) on Tuesday announced a soft launch of a nationwide infrastructure to support Chinese non-fungible tokens (NFTs), marking a key step towards creating a domestic industry that is separated from the global market and not associated with any cryptocurrencies.
BSN said the infrastructure, known as BSN-Distributed Digital Certificates (BSN-DDC), would offer “a diverse, transparent, credible and reliable” one-stop-shop for businesses to mint and manage their own NFTs without relying on cryptocurrencies, which are banned in China. Most NFTs around the world are part of the ethereum blockchain.Source: SCMP
In the last edition of Tidbits, we discussed how Mastercard is allowing people to buy NFTs without having to first own (and therefore spend) crypto. This is interesting because NFTs is one of the most unique use cases for crypto at the moment, yet there are so many different forces at work that are trying to completely separate NFTs from the crypto coin ecosystem.
Here, China is proposing its own way of doing that. People that want to own NFTs might not really care about crypto coins, so it probably doesn’t matter to them that these NFTs are not connected to Ethereum or other leading blockchains.
And at what point do you stop calling this an NFT? This is basically just a gallery of pictures on a private database, no?
#7 Mark Zuckerberg’s Stablecoin Ambitions Unravel With Diem Sale Talks
The controversial cryptocurrency project that Mark Zuckerberg once defended in front of Congress is unraveling after regulatory pressure.
The Diem Association, a cryptocurrency initiative once known as Libra backed by Meta Platforms Inc., is weighing a sale of its assets as a way to return capital to its investor members, according to people familiar with the matter. Diem is in discussions with investment bankers about how best to sell its intellectual property and find a new home for the engineers who developed the technology, cashing out whatever value remains in its once-ambitious Diem coin venture, said the people, asking not to be identified because the discussions aren’t public.Source: Bloomberg
#8 DHS Warns Electrical Infrastructure An ‘Attractive Target’ For Domestic Extremists
Domestic extremists have been developing plans to attack U.S. electric power infrastructure, the Department of Homeland Security (DHS) warned in a bulletin obtained by The Hill.
“DVEs have developed credible, specific plans to attack electricity infrastructure since at least 2020, identifying the electric grid as a particularly attractive target given its interdependency with other infrastructure sectors,” the bulletin says.
“We are very focused on the lone actor or a loose affiliation of individuals rather than necessarily an organized structure with a set and defined hierarchy, and that’s what I think can make the threat so challenging to address. It is that lack — it is the loose affiliation of individuals and the dynamic nature that they present,” Homeland Security Secretary Alejandro Mayorkas recently told reporters.Source: The Hill
#9 Why a Chinese Company Dominates Electric Car Batteries
CATL has given China a commanding lead in electric car batteries, a technology central to the broader green revolution. The company already supplies batteries to almost all of the world’s automakers, including G.M., Volkswagen, BMW and Tesla. CATL has emerged as one of the biggest winners of the electric car boom, along with Tesla.
The battery giant stands as a crucial link in a green-technology supply chain increasingly dominated by China. Chinese companies, particularly CATL, have secured vast supplies of the raw materials that go inside the batteries. That dominance has stirred fears in Washington that Detroit could someday be rendered obsolete, and that Beijing could control American driving in the 21st century the way that oil-producing nations sometimes could in the 20th.
“China’s problem with internal combustion engines was they were forever playing the game of catch-up,” said Bill Russo, a former chief of Chrysler in China who is now a Shanghai electric car consultant. “Now, the United States has to play the game of catch-up with electric vehicles.”Source: NYT
While Tesla gets most of the attention in EV land, the world’s leading battery maker, CATL, deserves a lot of attention as well.
But I do wonder how the geopolitics will evolve around this. ICE (gas) vehicles is not just a simple story about engines. It’s also a very complex story around oil and the geopolitics around oil. Similarly, EVs is not just a simple story about electrifying cars and climate change. EVs will also be a complex geopolitical story…one about the decline of oil and those who benefit and control it, and one about the rise of batteries and the minerals that go into and those who benefit and control it.
Also – One common but false claim that I hear very often that should definitely be corrected if we want to resolve our pending climate crisis is that electric cars do not have CO2 emissions. While this is true at the car level, the electricity that goes into the car is very likely not produced in a carbon-free way. There are very few countries that currently generate the majority of their electricity through carbon-free sources. The US is not one of them (and neither are most of the largest, most relevant countries in the world). That electricity is still very likely to be produced by burning natural gas (or coal). Electrifying a car does not reduce emission if all you do is shift the burning of carbon from the car to the burning of carbon in a power plant.
#10 LG Energy Raises $10.7 Billion in South Korea’s Biggest IPO
LG Energy is seeking to increase production capacity to meet burgeoning global demand for electric-car batteries and improve the quality of its cells following a $1.9 billion recall of General Motors Co.’s Bolt EVs. It also wants to close the gap with market leader, China’s Contemporary Amperex Technology Co.
“LG will be the most important partner for the U.S. electric-car industry,” Yoon said. “Although it’s lagging behind CATL in China, it is leading in the U.S. and working on producing the materials by itself, especially cathodes.”Source: Bloomberg
CATL is not alone. Batteries are increasingly competitive, and LG Energy just wrapped up a record-breaking IPO in Korea.
💬 Media + Games
#11 Tencent Quietly Updates QQ With Unreal Game Engine In Possible Metaverse Move
The update coincided with Tencent’s launch of a new feature on the app called Super QQ Show, which is a 3D interactive space where users can socialise, watch shows and play games. As such, analysts say the move marks Tencent’s latest effort to build its presence in the metaverse.
The Super QQ Show is available to a selected group of users for trials. Screenshots and video footage of the feature posted by Tencent employees, shows users dressing up their 3D avatars, decorating their homes and visiting one another, much like Nintendo’s popular video game series Animal Crossing.
Unreal Engine is used by blockbuster games such as Bioshock and Mass Effect, and Tencent owns a 40 per cent stake in its US developer Epic Games, which runs the engine.Source: SCMP
#12 Plaid Portal
Plaid is committed to building a safer fintech ecosystem, so that consumers can feel even more confident using apps and services that help them lead healthier financial lives. That’s why we build every Plaid product with control, security, and transparency in mind, and we offer tools to further educate consumers about sharing their financial data. In that vein, and in the spirit of Data Privacy Week, we’re excited to announce the general availability of Plaid Portal US, a privacy tool for people who have connected their financial accounts to apps and services in the US by using Plaid.Source: Plaid
This is a really interesting move. Plaid is already the plumbing / network that connects fintechs with banks (i.e. where most people’s money is still stored), but Plaid is mostly invisible. It’s plumbing.
THIS, however, is a very interesting wedge because it is the most consumer-facing thing Plaid has ever done. It’s using privacy as the angle to get in front of the consumer. If successful, many consumers will have a Plaid app, which could be an interesting beachhead for turning itself into a fintech payments or banking app or a long list of other very interesting things.
#13 Affirm Launches SuperApp and Browser Extension to Bring Consumers More Smart Ways to Shop and Manage Their Finances
Affirm (NASDAQ: AFRM), the payment network that empowers consumers and helps merchants drive growth, today announced the launch of two significant additions to its product suite: the Affirm SuperApp and Chrome browser extension. Affirm’s new SuperApp delivers the best of Affirm’s shopping, payments, and financial services in one easy-to-use destination. The new Google Chrome browser extension allows consumers to use Affirm’s flexible and transparent payment solutions at virtually any retailer’s website, even if Affirm isn’t listed as being available at checkout.
“By evolving the Affirm app into a super app, we have launched the ultimate destination for consumers to shop their favorite brands and smartly manage their finances, while also delivering a seamless, rewarding, and increasingly personalized experience.”Source: Affirm
BNPL continues to evolve as anticipated. Standalone BNPL was always destined to be consumed by something that more closely resembles a super app or by commerce. BNPL players now must become those super apps first before platforms and commerce players figure out BNPL on their own.
#14 Apple to Rival Square by Turning iPhones Into Payment Terminals
Apple Inc. is planning a new service that will let small businesses accept payments directly on their iPhones without any extra hardware, according to people with knowledge of the matter.
The company has been working on the new feature since around 2020, when it paid about $100 million for a Canadian startup called Mobeewave that developed technology for smartphones to accept payments with the tap of a credit card. The system will likely use the iPhone’s near field communications, or NFC, chip that is currently used for Apple Pay.Source: Bloomberg
Seems like Apple is ready to make use of the Mobeewave tech it acquired.
Similar to our discussion of Visa’s Tap-to-Phone effort, merchant acquiring is increasingly becoming software distribution (as opposed to, traditionally, hardware distribution). This new world is dangerous for merchant acquirers that don’t have valuable software to sell.
#15 Unity: Welcome, Ziva Dynamics!
Unity acquires Ziva Dynamics, leader in sophisticated simulation and deformation, machine learning, and real-time character creation.
The Ziva team has deep expertise and understanding of complex anatomical simulation and real-time artistry tools. Their incredible technology is paving the way for lifelike real-time characters and scalable, accessible workflows.
Emma is powered by state-of-the-art machine learning and is running in real-time in Unity. Her model was trained with over 30 terabytes of unique 4D data using the ZRT Trainer, which enables her to emote over 72,000 trained shapes and achieve entirely novel face poses. This is deep tech for amazingly realistic animation and incredibly emotive performances; letting characters shine even in demanding real-time environments. And soon, it will be accessible to artists and creators of all levels.Source: Unity
As a reminder, here’s what Unreal Engine’s Metahuman looks like in comparison.
From my untrained consumer eyes, Unreal’s Metahuman appears more visually impressive, BUT I am shook by how well Ziva can match mouth movements with the words being said.
#16 Introducing The AI Research Supercluster — Meta’s Cutting-Edge AI Supercomputer For AI Research
Developing the next generation of advanced AI will require powerful new computers capable of quintillions of operations per second. Today, Meta is announcing that we’ve designed and built the AI Research SuperCluster (RSC) — which we believe is among the fastest AI supercomputers running today and will be the fastest AI supercomputer in the world when it’s fully built out in mid-2022.
RSC will help Meta’s AI researchers build new and better AI models that can learn from trillions of examples; work across hundreds of different languages; seamlessly analyze text, images, and video together; develop new augmented reality tools; and much more. Our researchers will be able to train the largest models needed to develop advanced AI for computer vision, NLP, speech recognition, and more. We hope RSC will help us build entirely new AI systems that can, for example, power real-time voice translations to large groups of people, each speaking a different language, so they can seamlessly collaborate on a research project or play an AR game together. Ultimately, the work done with RSC will pave the way toward building technologies for the next major computing platform — the metaverse, where AI-driven applications and products will play an important role.
RSC today comprises a total of 760 NVIDIA DGX A100 systems as its compute nodes, for a total of 6,080 GPUs — with each A100 GPU being more powerful than the V100 used in our previous system. Each DGX communicates via an NVIDIA Quantum 1600 Gb/s InfiniBand two-level Clos fabric that has no oversubscription.Source: Meta
There’s an arms race in AI and metaverse. And the race is to see who can run to Nvidia’s cash register the fastest.
#17 Are Embedded Devices The Next Ransomware Target?
2021 will be remembered as the year that ransomware gangs turned their attention to critical infrastructure, targeting companies built around manufacturing, energy distribution and food production.
The Colonial Pipeline ransomware alone resulted in the shutdown of 5,500 miles of pipeline over fears that the ransomware attack on its IT network would spread to the operational network that controls the pipeline for distributing fuel.
Operational technology (OT) networks control the devices critical to the continued operations of production lines, power plants and energy supplies, and as such are typically segmented from a company’s internet-facing IT networks to better isolate critical hardware from cyberattacks. Successful attacks against OT networks are rare, but in the wake of the Colonial ransomware attack, CISA warned of a growing threat for critical infrastructure owners.Source: TechCrunch
There’s a lot of technology embedded in a lot of things now (e.g. your car alone has lots of little “computers” in them controlling various subsystems in the car), and all of them are potentially weak links for cyberattacks.
🍪 Semiconductors + Chips
#18 Nvidia Quietly Prepares to Abandon $40 Billion Arm Bid
Nvidia Corp. is quietly preparing to abandon its purchase of Arm Ltd. from SoftBank Group Corp. after making little to no progress in winning approval for the $40 billion chip deal, according to people familiar with the matter.
Nvidia has told partners that it doesn’t expect the transaction to close, according to one person, who asked not to be identified because the discussions are private. SoftBank, meanwhile, is stepping up preparations for an Arm initial public offering as an alternative to the Nvidia takeover, another person said.Source: Bloomberg
That’s unfortunate. Would have been a highly strategic and interesting acquisition for Nvidia.
🚘🌽 “Nuts and Bolts” Tech
#19 The Apple Drone Is Finally Here
Even without an ongoing pandemic disrupting supply chains and making it an even bigger challenge to hire seasonal labor, being a farmer is hard work, especially around harvest time. A company called Tevel Aerobatics Technologies believes it’s come up with a better harvesting solution for fruit farmers with the apple drone: beating that other tech company to the punch.
Each drone appears to be equipped with sensors and cameras for not only determining if a piece of fruit is ready to be picked but for knowing where to drop them using QR codes for targeting so the machine can collect all the fruit into a single container. Tevel promises the progress of the machines can be monitored remotely through the use of GPS and mobile apps, and they can operate 24 hours a day, or at least until the central machine runs out of power or gas.Source: Gizmodo
There’s a labor story here. While the common concern is that robots are going to replace work that humans want to do, farming jobs are not usually things humans want to do.
BUT I’m not sure if this works yet…I see a lot of apples on the floor in this promotional video.