(#70) Humane AI's pin lessons; on building in China; on manufacturing at home; more on EVs
The rise of the chief AI officer
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Strategy
Humane AI pin
The product is shipping and most (all?) all reviews are really bad. To understand what went wrong we need to recap some main stages, so here is my try:
1/ The Humane AI Pin, retailing at $699 with a $24 monthly subscription, introduces a novel concept in wearable technology, aiming to replace the traditional smartphone by leveraging AI-driven interactions through its CosmOS operating system. Unlike typical devices, the AI Pin doesn’t rely on a screen but instead uses a simple interface where users communicate their needs - be it making calls, sending texts, or asking general questions - directly to an AI assistant. This device connects exclusively via T-Mobile, not linked to existing numbers, which may limit its usability for some.
2/ The AI Pin is envisioned as a catalyst for a "post-smartphone" era, suggesting a shift towards less screen time and more real-world interaction. Humane promotes this vision as a step towards ambient computing, where technology seamlessly integrates into daily life without the invasive presence of screens. Despite this innovative approach, the reality of the device’s performance falls short of expectations, as revealed through extensive testing which highlighted significant reliability issues, slow response times, and an overall lack of basic functionalities that are essential for such a device.
4/ The physical design of the AI Pin is commendable; it's compact, durable, and aesthetically pleasing, designed to be worn on the chest for optimal operation of its microphones, camera, and speakers. However, the practicality of its use in everyday settings - like interacting with it while carrying items or its interference by common obstacles like bag straps - presents real challenges. The device is also prone to overheating and has significant battery life issues, complicating its usability further.
4/ An innovative aspect of the AI Pin is its "Laser Ink" projector, the closest feature it has to a screen, which projects information directly onto the user’s hand. While this feature is unique, the user interface for navigating this projection system is overly complicated and unintuitive. This complexity adds to the frustration with the device’s operational shortcomings, as it struggles to perform consistently well in real-world applications.
5/ Overall, while the AI Pin represents a bold step towards a future of integrated, less obtrusive wearable technology, it is plagued by numerous functional shortcomings that undermine its practicality. The promise of future software updates and improvements gives hope for its evolution, but as it stands, the AI Pin is more of a conceptual prototype than a viable alternative to current smartphones. The device, although packed with potential, fails to deliver a reliable and user-friendly experience, making it difficult to justify its high cost and ongoing expenses. I predicted this 4 months ago. LINK
Hardware is hard, especially when you don’t work anymore for $3 trillion company anymore. MKHBD; The Verge
EVs and more
Bloomberg reports that BYD, China’s EV champion, has received close to $3.4 billion in subsidies from the Chinese government. So, how can you compete with this? Simple, to tariffs (e.g. EU, USA) or regulation (ie. Turkey). LINK
Here is a picture of what the downstream supply chain for EVs looks like and China’s leverage:
This is just one sector, but these subsidies are across all key sectors in China: IT&C devices, solar panels, batteries, medical devices, etc. EU is looking into this and probably tariffs are underway. LINK
ByteDance’s future
1/ ByteDance Ltd.’s profit increased by 60% in 2023 vs 2022, from $25 to $40bn EBITDA. Outside China, TikTok has increased its revenue with a new channel: e-commerce. The company trades privately at around $250 bn and if will be banned in the USA probably the owners will sell it. LINK
2/ A TikTok data scientist disclosed that although officially assigned a Seattle-based manager, he was actually supervised by a ByteDance executive in Beijing. This executive instructed him to frequently send U.S. data via spreadsheets to ByteDance employees in China throughout 2022. That’s why (and 1,000 more reasons) I think it will be banned. LINK
On manufacturing at home
Dani Rodrick has a paper in Project Syndicate where it details that this ‘forced’ manufacturing at home doesn’t create that many jobs. I disagree.
1/ The strategic importance of advanced manufacturing industries, such as chipmaking, extends beyond immediate job creation to deeply influence local economies and future technological development. These industries are vital not only for the direct employment they offer but also for their role in establishing a robust local supply chain. For instance, in Taiwan, businesses have flourished by specializing in products like cleanroom apparel necessary for semiconductor fabrication, illustrating how such industries foster an ecosystem of ancillary services and suppliers. Additionally, the presence of these industries in a region contributes to long-term human capital development and learning spillovers, as seen in the investment in high-value research and development and the acquisition of technical skills that result in well-paying jobs.
2/ Moreover, the concept of "option value" in relation to future industries underscores the long-term benefits of maintaining and nurturing advanced manufacturing capabilities. Historical examples include the Taiwan Semiconductor Manufacturing Company (TSMC) and the early solar photovoltaic (PV) industry. TSMC's strategic acquisition of outdated equipment and gradual skill enhancement uniquely positioned it to lead and benefit from the shift to a fabless chip design model, revolutionizing the industry. Similarly, Chinese firms' entry into the solar PV sector using older semiconductor equipment demonstrates the advantages of building capabilities even from a technologically lagging start. This foundational approach ensures that regions retain a critical mass of advanced manufacturing knowledge, crucial for seizing emergent opportunities in future technological landscapes. LINK
🚗 🚝 On Building in China, by Noah Smith
Here is how the economist summarizes the cycle of companies doing work in China:
“1. A multinational company puts its factories in China, lured by some combination of cheap production, big contracts, and the dream of huge market opportunities.
2. China appropriates the multinational company’s technology, through some combination of joint ventures, acquisitions, reverse engineering, and espionage.
3. The appropriated technology makes its way into the hands of Chinese domestic companies.
4. The Chinese companies squeeze the multinational company out of the Chinese market.
5. The Chinese companies go overseas and outcompete the multinational company in world markets.” LINK
Artificial Intelligence
Understanding artificial intelligence ethics and safety, by the Alan Turing Institute. LINK
a16z has a new fund with a value of $7.2bn
From the press release:
“I am pleased to announce that we have just raised $7.2B for the following venture strategies: American Dynamism ($600M), Apps ($1B), Games ($600M), Infrastructure ($1.25B), and Growth ($3.75B).” LINK
The rise of the chief AI officer
1/ I see more and more the emerging role of the chief AI officer (CAIO) as companies increasingly integrate artificial intelligence into their operations to harness its potential while managing associated risks. This new C-suite position is gaining traction across various industries, with a significant uptick in appointments noted over the past five years. CAIOs are primarily responsible for overseeing AI implementation, driving innovation, and addressing ethical and security concerns. The role demands a comprehensive understanding of AI technology and its application, combined with strong leadership and change management skills. Notably, the White House has recently mandated federal agencies to appoint CAIOs, underscoring the role's growing importance in ensuring effective governance and accountability in AI deployment.
2/ Despite the critical functions they serve, the future permanence of the CAIO role remains uncertain, mirroring the transient nature of many modern executive positions. While some industry leaders advocate for a dedicated AI overseer to keep pace with rapid technological advancements, others, like Harrick Vin from Tata Consultancy Services, argue that AI integration should be a collective effort across all business functions, not isolated within a single role. Moreover, the role's evolution is likely influenced by broader economic and social dynamics, such as the recent increase in demand for chief revenue and growth officers following societal shifts. Ultimately, the sustainability of the CAIO position may depend on its ability to adapt to the ongoing advancements in AI and its expanding role in business strategy and operations. LINK
China AI
Eric Schmidt (ex-Google OG) issued warnings about China's AI sector. However, emails reveal his attempts to forge links with it. LINK
AI words and their meaning
Bloomberg compiled a cheat sheet list to better understand the AI jargon. LINK
More information about NVIDIA’s main chip that is driving the AI growth. LINK
Ben Evans on a podcast about an AI roadmap. LINK
AI Index 2024, from Stanford. LINK
Things Happen
India-made iPhones to reach 20-25% of global shipments in 2024. LINK
German companies’ dependence on China will last decades, according to Siemens. LINK
China confronts the Middle-Income trap, warns Nouriel Roubini. LINK
The emergence of Super Users. LINK
Short selling in South Korea is not legal. LINK
Data
The PC & Console Gaming Report 2024, from New Zoo. LINK
India’s EV adoption. LINK
Outside interest
Dubai 2040. LINK
It’s cheaper now than ever before to visit Japan due to currency devaluation. LINK
In Alaska, vegetables can grow to enormous sizes because they benefit from 20 hours of daily sunlight. LINK
French and British workers meet while digging the Channel Tunnel that connects Britain and mainland Europe (1990). LINK
Ludwig Von Mises + MMA fighters = LOVE. LINK
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