Category: What I’m Reading

  • Making a Movie to Make Better Video Encoding

    Until I read this Verge article, I had assumed that video codecs were a boring affair. In my mind, every few years, the industry would get together and come up with a new standard that promised better compression and better quality for the prevailing formats and screen types and, after some patent licensing back and forth, the industry would standardize around yet another MPEG standard that everyone uses. Rinse and repeat.

    The article was an eye-opening look at how video streamers like Netflix are pushing the envelope on using video codecs. Since one of a video streamer’s core costs is the cost of video bandwidth, it would make sense that they would embrace new compression approaches (like different kinds of compression for different content, etc.) to reduce those costs. As Netflix embraces more live streaming content, it seems they’ll need to create new methods to accommodate.

    But what jumped out to me the most was that, in order to better test and develop the next generation of codec, they produced a real 12 minute noir film called Meridian (you can access it on Netflix, below is someone who uploaded it to YouTube) which presents scenes that have historically been more difficult to encode with conventional video codecs (extreme lights and shadows, cigar smoke and water, rapidly changing light balance, etc).

    Absolutely wild.

  • Games versus Points

    The Dartmouth College Class of 2024, for their graduation, got a very special commencement address from tennis legend Roger Federer.

    There is a wealth of good advice in it, but the most interesting point that jumped out to me is that while Federer won a whopping 80% of the matches he played in his career, he only won 54% of the points. It underscores the importance of letting go of small failures (“When you lose every second point, on average, you learn not to dwell on every shot”) but also of keeping your eye on the right metric (games, not points).

  • Biopharma scrambling to handle Biosecure Act

    Strong regional industrial ecosystems like Silicon Valley (tech), Boston (life science), and Taiwan (semiconductors) are fascinating. Their creation is rare and requires local talent, easy access to supply chains and distribution, academic & government support, business success, and a good amount of luck.

    But, once set in place, they can be remarkably difficult to unseat. Take the semiconductor industry as an example. It’s geopolitical importance has directed billions of dollars towards re-creating a domestic US industry. But, it faces an uphill climb. After all, it’s not only a question of recreating the semiconductor manufacturing factories that have gone overseas, but also:

    • the advanced and low-cost packaging technologies and vendors that are largely based in Asia
    • the engineering and technician talent that is no longer really in the US
    • the ecosystem of contractors and service firms that know exactly how to maintain the facilities and equipment
    • the supply chain for advanced chemicals and specialized parts that make the process technology work
    • the board manufacturers and ODMs/EMSs who do much of the actual work post-chip production that are also concentrated in Asia

    A similar thing has happened in the life sciences CDMO (contract development and manufacturing organization) space. In much the same way that Western companies largely outsourced semiconductor manufacturing to Asia, Western biopharma companies outsourced much of their core drug R&D and manufacturing to Chinese companies like WuXi AppTec and WuXi Biologics. This has resulted in a concentration of talent and an ecosystem of talent and suppliers there that would be difficult to supplant.

    Enter the BIOSECURE Act, a bill being discussed in the House with a strong possibility of becoming a law. It prohibits the US government from working with companies that obtain technology from Chinese biotechnology companies of concern (including WuXi AppTec and WuXi Biologics, among others). This is causing the biopharma industry significant anxiety as they are forced to find (and potentially fund) an alternative CDMO ecosystem that currently does not exist at the level of scale and quality as it does with WuXi.

  • Freedom and Prosperity Under Xi Jinping

    Fascinating chart from Bloomberg showing level of economic freedom and prosperity under different Chinese rulers and how Xi Jinping is the first Chinese Communist Party ruler in history to have presided over sharp declines in both freedom and prosperity.

    Given China’s rising influence in economic and geopolitical affairs, how it’s leaders (and in particular, Xi) and it’s people react to this will have significant impacts on the world

    ‘Are You Better Off?’ Asking Reagan’s Question in Xi’s China
    Rebecca Choong Wilkins and Tom Orlik | Bloomberg

  • How the Jones Act makes energy more expensive and less green

    The Merchant Marine Act of 1920 (aka “The Jones Act”) is a law which requires ships operating between US ports to be owned by, made in, and crewed by US citizens.

    While many “Made in the USA” laws are on the books and attract the anger of economists and policy wonks, the Jones Act is particularly egregious as the costs and effects are so large. The Jones Act costs states like Hawaii and Alaska and territories like Puerto Rico dramatically as they rely so much on ships for basic commerce that it was actually cheaper for Hawaii and New England to import oil from other countries (like Hawaii did from Russia until the Ukraine war) than it was to have oil shipped from the Gulf of Mexico (where American oil is abundant).

    In the case of offshore wind, the Jones Act has pushed those companies willing to experiment with the promising technology, to ship the required parts and equipment from overseas because there are no Jones Act-compliant ships capable of moving the massive equipment that is involved.

    This piece from Canary Media captures some of the dynamics and the “launch” of the still-in-construction $625 million Jones Act-compliant ship the Charybdis Dominion Energy will use to support its offshore wind facility.

  • Why Intel has to make its foundry business work

    Historically, Intel has (1) designed and (2) manufactured its chips that it sells (primarily into computer and server systems). It prided itself on having the most advanced (1) designs and (2) manufacturing technology, keeping both close to its chest.

    In the late 90s/00s, semiconductor companies increasingly embraced the “fabless model”, whereby they would only do the (1) design while outsourcing the manufacturing to foundries like TSMC. This made it much easier and less expensive to build up a burgeoning chip business and is the secret to the success of semiconductor giants like NVIDIA and Qualcomm.

    Companies like Intel scoffed at this, arguing that the combination of (1) design and (2) manufacturing gave their products an advantage, one that they used to achieve a dominant position in the computing chip segment. And, it’s an argument which underpins why they have never made a significant effort in becoming a contract manufacturer — after all, if part of your technological magic is the (2) manufacturing, why give it to anyone else?

    The success of TSMC has brought a lot of questions about Intel’s advantage in manufacturing and, given recent announcements by Intel and the US’s CHIPS Act, a renewed focus on actually becoming a contract manufacturer to the world’s leading chip designers.

    While much of the attention has been paid to the manufacturing prowess rivalry and the geopolitical reasons behind this, I think the real reason Intel has to make the foundry business work is simple: their biggest customers are all becoming chip designers.

    While a lot of laptops and desktops and servers are still sold in the traditional fashion, the reality is more and more of the server market is being dominated by a handful of hyperscale data center operators like Amazon, Google, Meta/Facebook, and Microsoft, companies that have historically been able to obtain the best prices from Intel because of their volume. But, in recent years, in the chase for better and better performance and cost and power consumption, they have begun designing their own chips adapted to their own systems (as this latest Google announcement for Google’s own ARM-based server chips shows).

    Are these chips as good as Intel’s across every dimension? Almost certainly not. It’s hard to overtake a company like Intel’s decades of design prowess and market insight. But, they don’t have to be. They only have to be better at the specific use case Google / Microsoft / Amazon / etc need it to be for.

    And, in that regard, that leaves Intel with really only one option: it has to make the foundry business work, or it risks losing not just the revenue from (1) designing a data center chip, but from the (2) manufacturing as well.

  • Starlink in the wrong hands

    On one level, this shouldn’t be a surprise. Globally always available satellite constellation = everyone and anyone will try to access this. This was, like many technologies, always going to have positive impacts — i.e. people accessing the internet where they otherwise couldn’t due to lack of telecommunications infrastructure or repression — and negative — i.e. terrorists and criminal groups evading communications blackouts.

    The question is whether or not SpaceX had the foresight to realize this was a likely outcome and to institute security processes and checks to reduce the likelihood of the negative.

    That remains to be seen…

    Elon Musk’s Starlink Terminals Are Falling Into the Wrong Hands
    Bruce Einhorn, Loni Prinsloo, Marissa Newman, Simon Marks | Bloomberg

  • Why don’t we (still) have rapid viral diagnostics?

    One of the most disappointing outcomes in the US from the COVID pandemic was the rise of the antivaxxer / public health skeptic and the dramatic politicization of public health measures.

    But, not everything disappointing has stemmed from that. Our lack of cheap rapid tests for diseases like Flu and RSV is a sad reminder of our regulatory system failing to learn from the COVID crisis of the value of cheap, rapid in-home testing or adopting to the new reality that many Americans now know how to do such testing.

  • Huggingface: security vulnerability?

    Anyone who’s done any AI work is familiar with Huggingface. They are a repository of trained AI models and maintainer of AI libraries and services that have helped push forward AI research. It is now considered standard practice for research teams with something to boast to publish their models to Huggingface for all to embrace. This culture of open sharing has helped the field make its impressive strides in recent years and helped make Huggingface a “center” in that community.

    However, this ease of use and availability of almost every publicly accessible model under the sun comes with a price. Because many AI models require additional assets as well as the execution of code to properly initialize, Huggingface’s own tooling could become a vulnerability. Aware of this, Huggingface has instituted their own security scanning procedures on models they host.

    But security researchers at JFrog have found that even with such measures, have identified a number of models that exploit gaps in Huggingface’s scanning which allow for remote code execution. One example model they identified baked into a Pytorch model a “phone home” functionality which would initiate a secure connection between the server running the AI model and another (potentially malicious) computer (seemingly based in Korea).

    The JFrog researchers were also able to demonstrate that they could upload models which would allow them to execute other arbitrary Python code which would not be flagged by Huggingface’s security scans.

    While I think it’s a long way from suggesting that Huggingface is some kind of security cesspool, the research reminds us that so long as a connected system is both popular and versatile, there will always be the chance for security risk, and it’s important to keep that in mind.

  • Nope, the Dunning-Kruger Effect is just bad statistics

    The Dunning-Kruger effect encapsulates something many of us feel familiar with: that the least intelligent oftentimes assume they know more than they actually do. Wrap that sentiment in an academic paper written by two professors at an Ivy League institution and throw in some charts and statistics and you’ve got a easily citable piece of trivia to make yourself feel smarter than the person who you just caught commenting on something they know nothing about.

    Well, according to this fascinating blog post (HT: Eric), we have it all wrong. The way that Dunning-Kruger constructed their statistical test was designed to always construct a positive relationship between skill and perceived ability.

    The whole thing is worth a read, but they showed that using completely randomly generated numbers (where there is no relationship between perceived ability and skill), you will always find a relationship between the “skill gap” (perceived ability – skill) and skill, or to put it more plainly,

     (y-x) \sim x

    With y being perceived ability and x being actual measured ability.

    What you should be looking for is a relationship between perceived ability and measured ability (or directly between y and x) and when you do this with data, you find that the evidence for such a claim generally isn’t there!

    In other words:

    The Dunning-Kruger Effect is Autocorrelation
    Blair Fix | Economics from the Top Down

  • Cat Bond Fortunes

    Until recently, I only knew of the existence of cat(astrophe) bonds — financial instruments used to raise money for insurance against catastrophic events where investors profit when no disaster happens.

    I had no idea, until reading this Bloomberg article about the success of Fermat Capital Management, how large the space had gotten ($45 billion!!) or how it was one of the most profitable hedge fund strategies of 2023!

    This is becoming an increasingly important intersection between climate change and finance as insurance companies and property owners struggle with the rising risk of rising damage from extreme climate events. Given how young much of the science of evaluating these types of risks is, it’s no surprise that quantitative minds and modelers are able to profit here.

    The entire piece reminded me of Richard Zeckhauser’s famous 2006 article Investing in the Unknown and Unknowable which covers how massive investment returns can be realized by tackling problems that seem too difficult for other investors to understand.

  • Shein and Temu now drive global cargo

    Maybe you have shopped on Shein or Temu. Maybe you only know someone (younger?) who has. Maybe you only know Temu because of their repeat Superbowl ads.

    But these Chinese eCommerce companies are now the main driver behind air and ship cargo rates with Temu and Shein combined accounting for 9,000 tons per day of shipments!

    This is scale.

    Rise of fast-fashion Shein, Temu roils global air cargo industry
    Arriana McLymore, Casey Hall, and Lisa Barrington | Reuters

  • Geothermal data centers

    The data centers that power AI and cloud services are limited by 3 things:

    • the server hardware (oftentimes limited by access to advanced semiconductors)
    • available space (their footprint is massive which makes it hard to put them close to where people live)
    • availability of cheap & reliable (and, generally, clean) power

    If you, as a data center operator, can tap a new source of cheap & reliable power, you will go very far as you alleviate one of the main constraints on the ability to add to your footprint.

    It’s no small wonder, then, that Google is willing to explore partnerships with next-gen geothermal startups like Fervo in a meaningful long-term fashion.

  • Dexcom non-prescription glucose monitor approved

    Cheap and accurate continuous glucose monitoring is a bit of a holy grail for consumer metabolic health as it allows people to understand how their diet and exercise impact their blood sugar levels, which can vary from person to person.

    It’s also a holy grail for diabetes care as making sure blood sugar levels are neither too high nor too low is critical for health (too low and you can pass out or risk seizure or coma; too high and you risk diabetic neuropathy, kidney disease, and cardiovascular problems). For Type I diabetics and severe Type II diabetics, it’s also vital for dosing insulin.

    Because insulin dosing needs to be done just right, I was always under the impression that one of two things would happen along the way to producing a cheap continuous glucose monitor, either:

    1. The FDA would be hesitant to approve a device that wasn’t highly accurate to avoid the risk of a consumer using the reading to mis-dose insulin OR
    2. The device makers (like Dexcom) would be hesitant to create an accurate enough glucose monitor that it might cannibalize their highly profitable prescription glucose monitoring business

    As a result, I was pleasantly surprised that Dexcom’s over-the-counter Stelo continuous glucose monitor was approved by the FDA. It remains to be seen what the price will be and what level of information the Stelo will share with the customer, but I view this as a positive development and (at least for now) tip my hat to both the FDA and Dexcom here.

    (Thanks to Erin Brodwin from Axios for sharing the news on X)

  • “Corporate” Design

    Read an introspective piece by famed ex-Frog Design leader Robert Fabricant about the state of the design industry and the unease that he says many of his peers are feeling. While I disagree with some of the concerns he lays out around AI / diversity being the drivers of this unease, he makes a strong case for how this is a natural pendulum swing after years of seeing “Chief Design Officers” and design innovation groups added to many corporate giants.

    I’ve had the privilege of working with very strong designers. This has helped me appreciate the value of design thinking as something that goes far beyond “making things pretty” and believe, wholeheartedly, that it’s something that should be more broadly adopted.

    At the same time, it’s also not a surprise to me that during a time of layoffs and cost cutting, a design function which has become a little “spoiled” in the past years and of which calculating financial returns is experiencing some painful transition especially for creative-minded designers who struggle with that ROI evolution.

    If Phase 1 was getting companies to recognize that design thinking is needed, Phase 2 will be the space learning how to measure, communicate, and optimize what the value of a team of seasoned designers brings to the bottom line.

  • Costco Love

    Nice piece in the Economist about how Costco’s model of operational simplicity leads to a unique position in modern retail: beloved by customers, investors, AND workers:

    • sell fewer things ➡️
    • get better prices from suppliers & less inventory needed ➡️
    • lower costs for customers ➡️
    • more customers & more willing to pay recurring membership fee ➡️
    • strong, recurring profits ➡️
    • ability to pay well and promote from within 📈💪🏻

    Why Costco is so loved
    The Economist

  • How packaging tech is changing how we build & design chips

    Once upon a time, the hottest thing in chip design was “system-on-a-chip” (SOC). The idea is that you’d get the best cost and performance out of a chip by combining more parts into one piece of silicon. This would result in smaller area (less silicon = less cost) and faster performance (closer parts = faster communication) and resulted in more and more chips integrating more and more things.

    While the laws of physics haven’t reversed any of the above, the cost of designing chips that integrate more and more components has gone up sharply. Worse, different types of parts (like on-chip memory and physical/analog componentry) don’t scale down as well as pure logic transistors, making it very difficult to design chips that combine all these pieces.

    The rise of new types of packaging technologies, like Intel’s Foveros, Intel’s EMIB, TSMC’s InFO, new ways of separating power delivery from data delivery (backside power delivery), and more, has also made it so that you can more tightly integrate different pieces of silicon and improve their performance and size/cost.

    The result is now that many of the most advanced silicon today is built as packages of chiplets rather than as massive SOC projects: a change that has happened over a fairly short period of time.

    This interview with IMEC (a semiconductor industry research center)’s head of logic technologies breaks this out…

    What is CMOS 2.0?
    Samuel K. Moore | IEEE Spectrum

  • Store all the things: clean electricity means thermal energy storage boom

    Thermal energy storage has been a difficult place for climatetech in years past. The low cost of fossil fuels (the source for vast majority of high temperature industrial heat to date) and the failure of large scale solar thermal power plants to compete with the rapidly scaling solar photovoltaic industry made thermal storage feel like, at best, a market reserved for niche applications with unique fossil fuel price dynamics. This is despite some incredibly cool (dad-joke intended 🔥🥵🤓) technological ingenuity in the space.

    But, in a classic case of how cheap universal inputs change market dynamics, the plummeting cost and soaring availability of renewable electricity and the growing desire for industrial companies to get “clean” sources of industrial heat has resulted in almost a renaissance for the space as this Canary Media article (with a very nice table of thermal energy startups) points out.

    With cheap renewables (especially if the price varies), companies can buy electricity at low (sometimes near-zero if in the middle of a sunny and windy day) prices, convert that to high-temperature heat with an electric furnace, and store it for use later.

    While the devil’s in the details, in particular the round trip energy efficiency (how much energy you can get out versus what you put in), the delivered heat temperature range and rate (how hot and how much power), and, of course, the cost of the system, technologies like this could represent a key technology to green sectors of the economy that would otherwise be extremely difficult to lower carbon output for.

  • The IE6 YouTube conspiracy

    An oldie but a goodie — the story of how the YouTube team, post-Google acquisition, put up a “we won’t support Internet Explorer 6 in the future” message without any permission from anyone. (HT: Eric S)

    A Conspiracy to Kill IE6
    Chris Zacharias

  • Using your ear to control devices

    Very cool that we’re still finding new things we can control that can be applied to making the lives of people better.