AI

State of AI Report 2020

Every year, the algorithm that runs this newsletter eagerly awaits an annual AI report from U.K. investors Nathan Benaich and Ian Hogarth. Their 2020 findings didn’t disappoint. 

Research 

Language models are improving and getting really big. They tend to be developed by large organizations and distinguished by hefty training costs. OpenAI’s GPT-3 has over 10x the parameters of the next biggest language model, which was developed by Microsoft. 

Biology is having a breakout “AI moment,” with an explosion of research publications this year and last year involving AI methods. Privacy-preserving AI research has also ballooned, with more papers in the H1 2020 than all of 2019 that mention federated learning. 

A drawback: “We’re rapidly approaching outrageous computational, economic, and environmental costs to gain incrementally smaller improvements in model performance.” 

The human brains powering everything

The exodus from academia to Big Tech continues, which may affect graduates’ entrepreneurship rates. The U.S. remains a magnet for AI talent, meaning some countries are experiencing brain drain. 

• An interesting stat: The majority of elite AI researchers employed in the U.S. were not trained here. 

Ethics and politics

Facial recognition is already widely deployed around the world. This year it really became a hot-button issue, with Facebook settling a class-action lawsuit, multiple U.S. municipal bans, and large companies like Microsoft and Amazon reconsidering facial recognition work. 

Then, there’s the Washington-Beijing tech tensions. Those get enough airtime in this newsletter, so we’ll move on: The report points to a rising tide of “AI nationalism,” governments limiting foreign takeovers of superstar tech startups.

The future

Benaich and Hogarth provide eight predictions for the next year. File the sauciest one—Nvidia doesn’t complete its Arm acquisition—under AI nationalism.

Other predictions: A top tech company will shutter its AI lab in a strategic reset. Google’s DeepMind will make a breakthrough in biology-drug discovery, while Facebook will make one with computer vision and AR/VR. An AI-first drug discovery startup exits for $1+ billion. 

We’ll see you back here in 2021 to check on those predictions. In the meantime, you can read the Brew’s AI guide for deeper industry breakdowns.

GEOPOLITICS

Remote Control

In the global boxing match that is tech export controls, the U.S. has dealt blows to China for years. China is now swinging back with restrictions on sensitive exports for all companies—including emerging tech. 

Passed Saturday, a new law allows China to take action against any country that “abuses export control measures," according to state media. Though the law didn’t name names, think of this as a clapback after the U.S. announced restrictions on SMIC, China’s biggest chipmaker, last month. 

• There’s a chance China’s rare-earth metals—which are used to make permanent magnets for many technologies—could be included in the restricted section. 

Also making moves: the European Union, which is now finalizing a plan that would restrict the sale of surveillance tech (think: facial recognition and hacking software). 

Big picture: Export controls are seldom positive news for the development of emerging technologies. On the ground level, they can stifle market competition and drive up hardware and software costs—neither of which bodes well for innovation.

SPONSORED BY TEAMISTRY

Go Ahead, Mix Business and Pleasure

If you think business and pleasure don't mix, you haven't heard of Teamistry, an original podcast from Atlassian, that combines captivating storytelling with practical lessons you can apply to your team.

Each episode of Teamistry tells a story. A good story. 

Dive deep into the underwater caves of Thailand to discover how a disparate team of divers, medics, and engineers rescued a group of trapped teenagers. 

Learn how a world-renowned watch company owes their success to turning their own factories into competing innovators.

And if that’s not enough for you, all these stories are told by award-winning documentary filmmaker, Gabriel Cowperwaite (Blackfish).

Don’t make your ears wait any longer. Listen to Season 2 of Teamistry here.

EV

The Wannabe Android of EVs

Battery Day, Prime Day, and, now, Technology Day: The calendar is bursting with tech companies’ self-styled holidays. 

Who’s behind that last, extremely literal Day? Foxconn, the world’s largest contract electronics manufacturer + a major Apple supplier.

On Friday, Foxconn announced its goal to become the “Android of EVs” and provide components or services to 10% of the world’s electric vehicles by 2027. That’s expected to be 3 million EVs. 

There are two tools it’ll use to get there: 

• MIH, its new open-source EV platform that can also help manage robotaxis and fleets 
• A solid-state battery for EVs by 2024, in partnership with battery manufacturer SES 

Powering three million EVs will be about as easy as convincing a Hummer owner to switch to a hybrid—but Foxconn has a plan. 

• In January, Foxconn and Fiat Chrysler announced a partnership to develop EVs in China, with Foxconn handling electronics and software. 
• On Friday, Foxconn said a partnership with Taiwan carmaker Yulon Group should yield EVs in two years. 

Looking ahead: The company will also look into investing in digital health and robotics, reports Reuters, in a push to diversify its revenue drivers.

BITS & BYTES

Stat: In the next 20 years, will the development of machines/robots that can think and make decisions mostly cause harm, or mostly help? About 47% of people in North America predict the former (41%, the latter), according to a recent survey. 

Quote: “Today, it is easier than ever to reach national audiences with audio stories.”—Matthew Ball, an investor and media analyst, discussing new business/monetization opportunities for audio. 

Read: Polygon looks at the history of cloud gaming.

SPONSORED BY EQUITYEFFECT

Can cap tables be less confusing? Thanks to EquityEffect, the answer is a resounding “Heck Yes!” Their cap management tools save time, money, and eliminate errors. Plus, by utilizing scenario modeling, waterfall analysis, and robust reporting, you can get the clarity you need around your stock option pool. Get a 30-day free trial of EquityEffect right here.

WHAT ELSE IS BREWING

• The Boring Company’s Las Vegas project may ferry a fraction of the passengers that was initially proposed, TechCrunch reports. 
• Google is discontinuing its Trusted Contacts app and rolling some of its feature into Maps. 
• The UK will outlaw the use of a phone while driving, except for hands-free usage. 
• GM is changing the name of its Detroit-Hamtramck Assembly Center to Factory Zero, to reflect a “zero-crashes, zero-emissions, and zero-congestion future.”
• Fifteen European countries urged the EU to respond to a growing anti-5G movement on the Continent.

WHAT'S BREWING THIS WEEK

Monday: IBM earnings; MIT’s EmTech runs through Thursday; WSJ Tech Live runs through Wednesday.

Tuesday: Qualcomm’s two-day 5G Summit begins; Earnings (Netflix, Snap); Adobe Max runs through Thursday.

Wednesday: Earnings (Tesla, Verizon).

Thursday: Earnings (Intel, AT&T); Huawei launches new flagship phones; Trial begins for Samsung Vice Chairman Lee Jae-yong. 

Friday: “Croctober 23rd” (National Croc Day).

TECH THINGAMABOBS

For the trolley problem: MIT’s Moral Machine asks humans to consider moral decisions made by machine learning systems, such as self-driving cars, and offer their view. Try it here. 

For new moviemaking: Virtual studios are becoming a video production rival to green screens.

ICYMI

Catch up on the top Emerging Tech Brew stories from the past few editions: 

• Emerging tech policy roadmap 
• China’s digital Yuan giveaway
• AI advancements in Amazon Alexa: follow-up questions