💻 Dell's AI Dilemma, 🚁 Amazon Drone Deliveries, and 💊 A Cure for Hangovers?
💻 Dell's AI Dilemma, 🚁 Amazon Drone Deliveries, and 💊 A Cure for Hangovers?
Thomas's Innovation Wrap #80
Greetings,
Here’s your weekly wrap of technology, innovation, and finance news.
💻 Chips and Computing
During his Computex Keynote yesterday, NVIDIA CEO Jensen Huang reinforced the company’s annual development cadence by announcing the Blackwell Ultra chip for 2025 and a next-gen AI platform called Rubin for 2026. The company sees generative AI as a revolutionary technology that will transform industries from shipbuilding to drug development.
“We are seeing computation inflation,” Huang said on Sunday. As the amount of data that needs to be processed grows exponentially, traditional computing methods cannot keep up and it’s only through Nvidia’s style of accelerated computing that we can cut back the costs, Huang said. He touted 98% cost savings and 97% less energy required with Nvidia’s technology, saying that constituted “CEO math, which is not accurate, but it is correct.”
Dell is seeing explosive demand for AI servers, with shipments more than doubling sequentially in Q1 to $1.7 billion and the backlog increasing over 30% to $3.8 billion. Now, they just need to work out how to make money. Tony Sacconaghi from Bernstein Research asked this pointed question on the earnings call:
If I just look year-over-year at the ISG [Infrastructure Solution Group] business, storage was perfectly flat. AI servers went from 0 to $1.7 billion, which sort of suggests that traditional servers were flat. So really, the only thing that changed was you added $1.7 billion in AI servers, and operating profit was flat. So does that suggest that operating margins for AI servers were effectively 0? And if that's not the case, how do you square the circle with what I just outlined?
Dell stock fell 18% on Friday.
China has launched a $47.5 billion fund to invest in AI computing power, advanced memory technologies, and crucial lithography tools, aiming to boost its domestic semiconductor industry and achieve self-sufficiency. This third "Big Fund" surpasses the combined total of the previous two phases, which focused more broadly on semiconductor development.
The US ban on exports of EUV tools to China has impeded the country's advances in chip manufacturing processes. The sources said the Big Fund's third phase will likely invest more in developing lithography technology.
Science wrote about how quantum computers are rapidly approaching the point where they can speed up the hunt for new drugs and materials. By harnessing quantum mechanics' quirky properties, these machines are well-suited to modelling chemical structures and reactions that have long been too complex for conventional computers.
Already, quantum computers are helping researchers zoom in on reaction pathways in fuel cell catalysts, simulate the infinitesimally brief interactions of light and matter, and reveal druggable pockets in proteins. Ashley Montanaro, a co-founder of Phasecraft, a quantum computing company, says today's quantum computers are almost good enough to make discoveries beyond the reach of classical systems. "It's a lot closer than people previously thought."
Swiss startup FinalSpark is selling access to cyborg biocomputers that wire living human brain organoids into silicon chips, enabling ultra-efficient machine learning that's in theory up to a billion times more energy-efficient than silicon chips alone (it’s still very nascent).
If cyborg biocomputers could radically reduce that energy consumption, they could certainly make a contribution – but they're a long way off scaling to the size of a single GPU, let alone the multi-billion-dollar clusters the AI giants are amassing.
⚙️ Mobility
Amazon has received FAA approval to fly its delivery drones beyond visual line of sight, a major step forward to having our favourite snacks delivered by drone. The company developed onboard technology to detect and avoid other aircraft, allowing its drones to navigate a wider area safely.
The company plans to expand its delivery area around its drone facility at College Station, Texas. Later in 2024, drone deliveries will be integrated into its broader delivery network.
BYD's latest plug-in hybrid cars boast an impressive 2,100km range and ultra-low fuel consumption. The company claims it will be a major threat to petrol-powered rivals in China's EV market.
New Zealand startup Vessev has emerged from stealth mode with the VS-9, an innovative electric hydrofoil boat that offers efficiency and a smooth passenger experience. The company is already working on scaling up its tech to a larger 100-passenger vessel called the VS-18.
We use techniques similar to America's Cup vessels which provide very high control authority when compared to other systems. That means we can handle more wind and bigger seas. The system is more difficult to engineer up-front, but results in a very performant vessel that is both more capable and more efficient.
👓 Virtual and Augmented Reality
Meta is making big moves in the XR space by opening up its Horizon OS to third-party headsets and reforming its app store policies to be more developer-friendly. These changes solidify Meta's position as a leader in the XR market and pose a challenge to competitors like Google.
Ultimately, Meta's long-term plan was always to become the default marketplace for XR apps and to earn most of the money in this segment from app (and in-app) purchases, rather than from the hardware itself.
Meanwhile, Google has partnered with Magic Leap to combine their AR technologies and ecosystems in a bid to bring more immersive experiences to market.
💊 Health
Recent research into innovative cancer treatments, from personalised vaccines to targeted therapies, is delivering a steady stream of encouraging results.
A new personalised cancer vaccine trial in the UK offers hope for reducing cancer recurrence. The BioNTech vaccine primes the immune system to fight tumour cells by analysing a patient's cancer and creating a custom vaccine containing markers specific to their cancer.
"These vaccines teach the patient's immune system to recognize and destroy cancer cells. The vaccine is tailored to the molecules expressed by the cancer cells of each patient (this is why it's called "personalized"). This design should make the treatment more effective," Francesco Crea, a professor of cancer pharmacology at the U.K.'s Open University, told Newsweek.
In the battle against lung cancer, two groundbreaking drugs are showing impressive results. Based on trial results presented at the world's largest cancer conference, Pfizer's Lorlatinib is smashing expectations with an "off the charts" ability to prevent disease progression in advanced non-small cell lung cancer patients. The five-year progression-free survival rate was an astonishing 60% for Lorlatinib compared to just 8% for the standard drug Crizotinib.
"Sixty per cent five-year progression-free survival in non-small cell lung cancer is just unheard of."
Meanwhile, Summit Therapeutics' stock surged 148% last week after their experimental lung cancer drug, Ivonescimab, outperformed Merck's blockbuster Keytruda in a late-stage trial. The drug showed significant improvement in progression-free survival across patient subgroups.
In other health news, scientists have developed a milk and iron gel that prevents mice from getting drunk too quickly and helps them shake off the effects of hangovers. If successful in human trials, the gel could be used to prevent hangovers and mitigate the damage caused by chronic drinking.
Sometimes, all this liquored-up reeling and careening can set off fire alarms while homeowners are on vacation. This infuriates volunteer firefighters, who constantly get called out on false alarms in the middle of the night. Not because of a space heater someone forgot to turn off. Not because of faulty electrical wiring. Nope. Hammered mice running amok. Third time this month.
A new drug that regrows teeth is set to enter human trials in September after successful animal testing. If all goes well, researchers optimistically predict the drug could be available to consumers by 2030.
Takahashi and his fellow researchers are so optimistic about this drug that they predict the medicine will be available for everyday consumers by 2030. So in six years we can throw our toothbrushes away and eat candy bars all day and all night without a care in the world (don't actually do that.)
Precision Neuroscience has set a new record by placing 4,096 electrodes on a living human brain, surpassing the previous record of 2,048. The company's approach focuses on minimal invasiveness and safety, in contrast to some of its competitors, like Neuralink.
To move neural interfaces from the world of science to the world of medicine, "safety is paramount," Rapoport said. "For a medical device, safety often implies minimal invasiveness," he added.
💎 Artificial Intelligence
PwC has inked a landmark deal to become OpenAI's first reseller and largest enterprise user of ChatGPT Enterprise, giving over 100,000 of its employees access to the latest generative AI tools.
By embracing ChatGPT Enterprise across our workforce, we will bring our first-hand experience of our AI transformation to clients, complementing our audit, tax and consulting services with a broad array of business and industry solutions," the company said.
Swedish fintech firm Klarna is using generative AI tools like Midjourney, DALL-E, and Firefly to automate marketing campaigns and generate images, saving the company $10 million annually. Klarna has cut its sales and marketing budget by 11% in the first quarter, with AI responsible for 37% of the cost savings.
"Traditionally, it would have been very costly to cater to these occasions with bespoke imagery, but with AI that is no longer an issue," Klarna CMO David Sandström said in a statement. "Essentially, we have removed the need for stock imagery."
J.J. Fiasson, CEO of Sydney-based Leonardo Ai, believes generative AI will enhance rather than automate creative work by "levelling up the baseline of expectation". He argues it will allow small teams on tight budgets to create incredible work, similar to how the introduction of affordable, high-quality digital video cameras enabled low-budget feature films.
I think that it's the same sort of idea applies here. It's a shift in terms of what's possible."
Anthropic is making it easier to create personalised AI assistants tailored to your specific needs, whether it's an email helper, a shopping bot, or a custom solution. Their new "tool use" feature allows Claude to connect with any API, enabling a wide range of AI-powered applications.
Apple is planning to use more advanced AI to significantly upgrade Siri, allowing it to control individual app functions and features with voice commands for the first time. The new capabilities will be a major highlight of Apple's renewed push into AI at WWDC (June 10).
Apple is preparing several features, including voice memo transcriptions and summaries, quick recaps of websites and notifications, automated message replies, advanced photo editing, and AI-generated emojis, Bloomberg has reported.
Researchers from the University of Zurich have combined a novel bio-inspired camera with AI to develop a system that can detect obstacles around a car 100 times faster than current systems while using less computational power.
"The result is a visual detector that can detect objects just as quickly as a standard camera taking 5,000 images per second would do but requires the same bandwidth as a standard 50-frame-per-second camera," says Gehrig.
💲 Finance
The growth in AI is generating increased energy demand and lots of unwanted heat in data centres, creating opportunities for companies providing power and cooling systems. Vistra Corp, a major US power producer, has seen its stock soar more than 300% over the past year, outperforming even Nvidia, as investors bet on surging demand driven partly by power-hungry AI data centres.
"Power demand is extremely strong, and it's being driven by the data center trade," but Vistra's mix of gas and nuclear power plants make it "a unicorn," according to Guggenheim's Shahriar Pourreza who assigned the stock its highest price target on Wall Street at $133.
Vertiv is another company riding this wave, providing power and cooling systems that have led to surging orders and a record backlog.
Electricity consumption for data centers in the U.S. is expected to grow around 30% from 2022 to 2026 to 260 terawatt-hours, according to the International Energy Agency. That is around 6% of total electricity demand in the country or enough to power 24 million American homes for a year.
The AI boom is also extending beyond large language models to include AI inferencing at the edge, benefiting companies like Qualcomm. The company's new Snapdragon X series chips, partnerships with the likes of Microsoft, and the recovery in PC and device markets have all contributed to its soaring stock price.
The launch of Qualcomm's new Snapdragon X series of chips, which targets AI inferencing, has coalesced nicely with turnarounds in the PC and device markets to give Qualcomm this boost. Qualcomm has also made a series of announcements with key partners such as Microsoft that are adopting its technology for AI processing on consumer devices.
In China, SenseTime, one of the country's leading AI companies, is targeting profitability within two years as their generative AI business has seen tremendous growth, tripling revenue last year. Despite facing US sanctions, the company is optimistic about the future of its AI infrastructure platform and vertical sector applications.
"We set the goal for a 100 per cent growth of our generative AI business this year," Xu told the South China Morning Post in an exclusive interview on Tuesday.
🌞 Renewables
Qcells is investing in new solar cell manufacturing technology from Lumet that promises to reduce costs and boost performance by using less silver in a more efficient process. The company is aiming to stay competitive with cheaper Chinese solar panels without relying on trade barriers or subsidies.
"We know we can't depend on trade barriers or subsidies to make us competitive," Danielle Merfeld, global chief technology officer at Qcells, said in an interview. "We have to keep innovating."
In the green hydrogen space, China Merchants-backed equipment maker CM Xiageng plans to quadruple its output to meet surging global demand. It is preparing to start a new round of financing to fund this expansion and technology upgrades.
"Last year, we already used the 25 million yuan provided by our co-founders to build four production lines with the capacity to produce 50 units of electrolysers per year," said Gao.
Boston Metal has developed an innovative way to produce steel using electricity instead of coal, which could dramatically reduce the steel industry's carbon footprint. The startup has raised over $300 million to scale up its “Molten Oxide Electrolysis” technology.
Energy providers are also embracing renewables and AI to bring equitable, sustainable energy solutions to their customers. Energy Queensland is leveraging rooftop solar and AI to ensure the benefits of renewable energy are shared equitably among its customers.
"The young people coming on board can barely conceive of how networks were built back in the 1900s. Everything was mechanical back then, but now it's a digital world. I'd love to be 30 years younger, so I could spend the next 50 years in the future, it's that exciting!" said Price.
Mitsubishi Heavy Industries is betting big on small turbines designed for on-site power generation at data centres. It sees this as a major growth opportunity given the rapidly expanding data centre market and the fact that energy availability is often a limiting factor for hyperscale facilities.
⚡ Other Snippets
Semler Scientific, a medical technology company, has followed MicroStrategy's lead by adopting Bitcoin as its primary treasury reserve asset, causing its stock price to surge 27% last week.
"Our bitcoin treasury strategy and purchase of bitcoin underscore our belief that bitcoin is a reliable store of value and a compelling investment," Eric Semler, Semler's chairman, said in a statement.
The Washington Post wrote about the Biden administration rejecting TikTok's “extraordinary deal” to implement stringent security measures in the US, raising questions about whether the government is genuinely interested in resolving the concerns surrounding the app.
"The government essentially threw up its hands at the possibility of any kind of regulation or cybersecurity measure," said Anupam Chander, a Georgetown University law professor who researches international tech policy.
Two Taiwanese AI robot dogs named Oliver and Dustin have debuted. They were developed by a team led by National Taiwan University professor Kuo Chung-hsien as a lower-cost alternative to overseas models, with the high-tech hounds projected to cost 50% less.
They could help to alleviate Taiwan's labor shortage, especially in the petrochemical, construction, railway, food delivery and service sectors, he said.
PayPal is launching an advertising platform that leverages transaction data from PayPal and Venmo to show customers relevant products. The company will collect data from customers by default but plans to offer the ability to opt-out.
"If you're someone who's buying products on the web, we know who is buying the products where, and we can leverage the data," Grether said in a statement to the WSJ.
China is investing 6 billion yuan (A$1.2 billion) to develop advanced solid-state batteries for electric vehicles. Major Chinese battery and EV makers like CATL, BYD, and Nio-backed WeLion will receive a share of the funding to develop the promising but nascent technology.
Solid-state batteries are seen as more powerful, durable, faster to charge and safer than the current generation of lithium-ion cells that dominate the EV sector. But the development of the potential game-changing battery is scientifically and technologically challenging and still years away from commercialization.
CNBC discussed why demand for copper is surging.
Have a great week,
Thomas
About Thomas Rice
Thomas Rice co-founded Minotaur Capital, a technology-driven, AI-led global equities fund, and is based in Sydney, Australia. He can be found on the platform-formerly-known-as-Twitter at @thomasrice_au.