(#75) Microsoft's new devices are targeting the MacBook Air; How China is moving up Apple's supply chain; Growth at Uber

What does it take to grow Uber in 6 years from 10 cities to $10B in revenue?

May 23, 2024

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Strategy

Microsoft's new devices are targeting the MacBook Air
1/ Microsoft is confident it has finally mastered the transition to Arm chips, positioning its new Copilot+ PCs to outperform Apple's MacBook Air with the M3 processor. During a recent demonstration at the Microsoft Build event in its Redmond headquarters, Microsoft showcased Surface devices powered by Qualcomm’s Snapdragon X Elite chips, which consistently outperformed the MacBook Air in various benchmark tests. This performance leap is a significant milestone for Microsoft, as it marks the culmination of years of development and close collaboration with top laptop partners to create a new generation of powerful, battery-efficient Windows laptops.

2/ These advancements are further supported by improved app compatibility, with major applications like Photoshop, Dropbox, and Zoom now natively supporting Arm chips. Microsoft has also developed the Prism emulator, which enhances performance for non-native apps. Coupled with substantial gains in battery life - surpassing even the MacBook Air M3 - Microsoft's new devices promise to revolutionize the Windows laptop market. Additionally, the integration of AI capabilities through Qualcomm's neural processing unit opens up new possibilities for AI-driven features and applications, positioning Microsoft to potentially redefine the future of computing with these innovative Copilot Plus PCs.

3/ It is worth noting that all benchmarks were against Macbook Air 3.

Finally, we will get Apple-quality laptops and performance while paying for a PC.

Additionally, the conference continued with new announcements.

1/ Real-Time Intelligence in Microsoft Fabric

Real-Time Intelligence within Microsoft Fabric offers an end-to-end SaaS solution that enables businesses to act swiftly on high-volume, time-sensitive, and granular data. This new feature, now in preview, allows for efficient data qualification, analysis, and organization at ingestion, significantly enhancing decision-making processes. It caters to both analysts with low/no-code experiences and pro developers needing code-rich interfaces, making it versatile across various business needs.

2/ Empowering Developers with Microsoft Fabric Workload Development Kit

To build flexible and efficient applications, Microsoft introduced the Fabric Workload Development Kit. This tool allows independent software vendors (ISVs) and developers to extend applications within Fabric, creating a unified user experience. The kit supports the customization and efficiency needed for developing robust applications, enabling a seamless integration process within the Fabric ecosystem.

3/ Advancements in GitHub Copilot

GitHub is enhancing its Copilot experience with new extensions developed by Microsoft and third-party partners, available in private preview. These extensions allow developers to customize their Copilot experience with preferred services like Azure, Docker, and Sentry. GitHub Copilot for Azure exemplifies this by enabling natural language interactions for managing Azure resources, thereby boosting development speed and efficiency.

4/ New Frontier Models in Azure AI

Microsoft has integrated OpenAI's latest multimodal model, GPT-4o, into Azure AI Studio and as an API, setting new standards for generative and conversational AI. Additionally, Microsoft’s Phi-3-vision model is now available, offering powerful, cost-effective AI capabilities optimized for personal devices. These models enhance text, image, and audio processing, providing developers with cutting-edge tools to build advanced AI applications.

5/ Microsoft and Khan Academy Collaboration

Microsoft and Khan Academy have partnered to enhance educational tools with AI. Microsoft is enabling free access to Khanmigo for Teachers, an AI-powered teaching assistant, to all K-12 U.S. educators. This initiative, powered by Azure OpenAI Service, aims to free up teachers’ time for more engagement with students. Additionally, the collaboration explores improving math tutoring and integrating more Khan Academy content into Microsoft’s educational platforms.

6/ Innovations in AI Infrastructure and Copilot Enhancements

Microsoft is advancing its AI infrastructure with the introduction of powerful new virtual machines, including those powered by AMD’s MI300X AI accelerator chip and the custom-designed Cobalt 100 Arm-based VMs. Furthermore, Microsoft is expanding Copilot with new agent capabilities, allowing it to manage complex business processes independently. Copilot extensions, including plugins and connectors, enhance its functionality by connecting to new data sources and applications, making it an indispensable tool for modern businesses.

Indeed, Microsoft wil continue to be the most valued company in the world in 2024. The Verge, Blog, CNET

Finally, this is translated in the bottom line:

$MSFT Q3 2024

"Microsoft Copilot and Copilot stack are orchestrating a new era of AI transformation, driving better business outcomes across every role and industry." – Satya Nadella. LINK

How China is moving up Apple's supply chain
Apple's effort to shift production out of China to diversify its supply chain and mitigate geopolitical risks is being complicated by the deep entrenchment of Chinese firms in high-tech manufacturing. While Apple's high-value components largely come from non-Chinese suppliers, a significant portion of these components is still manufactured within China. For instance, South Korean firms like Samsung and SK Hynix, which supply critical memory chips for Apple, maintain substantial production facilities in China. This dual dependence highlights the complexity of decoupling, as even high-tech manufacturing has significant footprints in China.

Moreover, Chinese firms are ascending Apple's supply chain, moving from low-value assembly to high-tech component production. Companies like YMTC, Sunny Optical, and Lens Technology are producing increasingly sophisticated parts for Apple's products. Additionally, Chinese contract manufacturers such as Luxshare and Wingtech are not only expanding their share of Apple's production but are also aiding Apple's shift to new regions like India and Vietnam by setting up production facilities there. This dynamic underscores the paradox of decoupling: while Apple diversifies its manufacturing locations, the pervasive role of Chinese firms suggests a more complex and interconnected global supply chain, complicating the narrative of straightforward decoupling from China. LINK

Morocco’s automotive industry is shifting gears to prep for the electric vehicle era
1/ Morocco has emerged as a significant player in the global automotive industry, outpacing even China in car exports to Europe. Over the past 15 years, Morocco's automotive sector has seen explosive growth, with auto exports soaring from zero to $14 billion. This remarkable success story is rooted in a strategic blend of infrastructure investment, foreign firm engagement, and leveraging geographical advantages.

2/ Central to Morocco's automotive ascendance has been its heavy investment in infrastructure. The country has developed a comprehensive network of railways, highways, and ports, creating an efficient and robust logistical framework. This infrastructure not only supports the rapid movement of goods within Morocco but also facilitates swift exports to European markets, capitalizing on the country's strategic location.

3/ Morocco has also successfully attracted a diverse array of foreign automotive firms from France, China, Japan, and Korea. Renault, for instance, has become Morocco's largest private employer. These companies were lured not only by subsidies but by the promise of speed; Morocco's regulatory environment allows for the rapid approval and construction of factories, often within months. This efficiency has made Morocco an appealing destination for automotive manufacturing.

4/ The establishment of Special Economic Zones (SEZs) and industrial parks has been another cornerstone of Morocco's strategy. These zones provide favorable conditions for manufacturing, including tax incentives and streamlined bureaucratic processes. This approach has created a conducive environment for foreign investment and industrial growth, significantly boosting the automotive sector.

5/ Moreover, Morocco has effectively leveraged its free trade agreements (FTAs) with the European Union and the United States, along with its proximity to Europe. These agreements have granted Moroccan-made vehicles preferential access to key markets, further enhancing the attractiveness of the country as an automotive hub. The strategic geographical position allows for quick and cost-effective export routes to Europe.

6/ Recently, Morocco has been transitioning into an electric vehicle (EV) manufacturing hub. This shift is supported by the surge of new plants from Chinese battery makers and other international firms, positioning Morocco at the forefront of the EV revolution. The country's proactive approach to embracing the future of automotive technology proves its commitment to sustaining and expanding its industrial prowess.

Be like Morocco! Build and ship! LINK

Humane AI start-up is looking for buyers
I have written in at least 2-3 newsletters so far that the company will not have a future. Now Bloomberg has reported that the company is looking for buyers. LINK

What does it take to grow Uber in 6 years from 10 cities to $10B in revenue?
1/The company relied on lean and entrepreneurial teams to grow Uber from operating in 10 cities to achieving $10 billion in revenue within six years. Each city started with a small team of three people: a General Manager (GM), an Operations Manager, and a Community Manager. This structure enabled swift decision-making and responsiveness, attracting highly entrepreneurial individuals motivated to solve problems independently.

2/ Treating each city as its startup allowed teams to operate with flexibility and adaptability. Local teams could implement strategies suited to their specific markets without waiting for approval from headquarters. Successful strategies developed in one city were shared across other cities, accelerating overall growth and improvement.

3/ Real-time access to data enabled teams to monitor performance closely and make informed decisions quickly. Immediate feedback from data allowed teams to identify and amplify successful initiatives while promptly addressing issues. This data-driven decision-making was crucial for maintaining operational efficiency.

4/ Being physically present in the cities where Uber operated ensured that teams had firsthand knowledge of market dynamics. This proximity allowed for better relationship building with both drivers and riders. Maintaining close connections with drivers and riders was essential for understanding their needs and concerns, leading to a more customer-centric approach.

5/ The ability to move quickly and adapt to changes in the market was a significant advantage. Local teams did not have to wait for central decisions, allowing them to act swiftly based on real-time insights. Empowering teams to fix problems as they arose led to a culture of accountability and rapid problem resolution.

6/ Understanding that relationships matter, Uber emphasized staying close to their customers, both drivers and riders. This approach ensured customer feedback was integrated into the service improvement process, resulting in a product resonating well with users. By fostering an entrepreneurial culture and maintaining operational agility, Uber was able to scale rapidly and effectively across diverse markets globally. LINK

Artificial Intelligence

Meta’s AI chief says large language models will not reach human intelligence

“LLMs had very limited understanding of logic . . . do not understand the physical world, do not have persistent memory, cannot reason in any reasonable definition of the term and cannot plan . . . hierarchically”. LINK

Singapore writers reject the government's plan to let AI train in their works. LINK

DeepL, the AI-based language translator, raises over $100M at a $1B+ valuation. LINK

If you don’t want Slack to use your data to train AI, you have to email the company to opt-out. LINK

Things Happen

India's rise in the global supply chain. LINK

How the EVA sandal took over the summer ‘must have’. LINK

Britain’s biggest retailer isn’t British and isn’t a retailer. LINK

Clean Energy is driving a New Era in American manufacturing. LINK

ASML and TSMC can remotely disable their machinery if China invades Taiwan. LINK

China’s spy threat is growing because everything is hackable. LINK

Data

The world population will peak in 2086 and from there it will be a long-term decline. LINK

Number of FDI projects announced and jobs created in Europe between 2014 and 2023. LINK

30% of the population of Switzerland lives within 5 kilometers of the main train line crossing the country. LINK

Outside interest

How the Russian disinformation system works. LINK

The rain is a serious reason for delays in the construction sector in the UK. LINK

How marijuana affects the brain & body. LINK

Volodymyr Zelenskyy’s interview with the New York Times. LINK

Premier League took over the world, proving once again that the British are the best at creating pop culture. LINK

We could run out of cocoa. LINK

Interesting newsletters 💡

I will be a speaker at Techsylvania, held between 26-27 June in Cluj. Use the code SORIN24 to get a 24% discount on your tickets. LINK