(Apologies for the dual emails - looks like the previous one was sent from a draft before fully complete.)
Big week for semiconductor news - Intel, facing headwinds from all market segments and facing activist investor pressure to split the foundry and design sides of the business, finally made a CEO change. Pat Gelsinger is swapping CEO duties at VMWare to Intel. He’d previously spent over 30 years at Intel and had held the CTO role. There may still be hope for Intel, but there’s lots of work ahead.
Qualcomm acquired chip startup Nuvia for $1.4B. The announcement is unusual for a corporate acquisition, in that other companies - including Microsoft, Google, Samsung, HP - have made statements in support of it. Nuvia designs high performance chips based on the ARM architecture, continuing the trend of the external companies (Apple, Amazon, Nuvia) designing better ARM chips than ARM itself. Excited for friends and ex-colleagues at both companies!
TSMC announced earnings that were slightly below expectations, but increased capital expenditure guidance from $19B to $25-28B - a 40% increase. For a hugely capital intensive industry, this is an incredibly optimistic signal of future demand. In fact, just this week there’s been news of auto manufacturers like Ford, GM, Honda and Volkswagen needing to idle their plants because they don’t have sufficient on hand inventory of chips.
It’s a fantastic time to be semiconductor nerd :-)
On to the top 5 things I read this week -
The Five Best Things
This 6 minute video is a good summary of OpenAI’s latest pair of models - DALL-E (a portmanteau of Salvador Dali and WALL-E) and CLIP. Both models are based on the transformer architecture (again);DALL-E generates images given a text prompt, and CLIP sorts the output images generated by best match. This improves the consistency and quality of the samples.
OpenAI certainly started the new year off with a bang! The anthropomorphized images generated from just text prompts are really cute - like something from the Pokemon universe. The avocado chair in particular is sparking a lot of interior design envy. OpenAI did not release the paper or the model for DALL-E, and the images in the blog post are all cherry-picked. They did share the code for CLIP, whose classification abilities can be applied to many domains in a “zero-shot” manner, i.e. without having seen any training data. The outputs are still brittle (see several examples in this thread), but could provide folks who lack the ability to collect and curate massive datasets to still perform classification. There’s a fantastic explainer on the impact of DALL-E on the creative work industry here. There’s a range of ethical concerns as well, such as copyright abuse and misuse (you know it’s just a matter of time before AI generated porn, right?)
Ben Thompson: Internet 3.0 and the Beginning of (Tech) History
Ben Thompson’s excellent weekly post gives us a brief history of the internet, with the first era in the 80s and 90s driven by development of technology standards and the second era driven by business models - such as Google, Facebook and other network effects driven winner-take-most businesses. Using the shocking events surrounding the attack on the U.S capitol last week as an example, Thompson makes the case that the third era of the Internet is going to be driven by geopolitics. You can see this coming in the way political leaders around the world have reacted to the censure of certain kinds of speech, while other highly incendiary material remains up on the Internet.
Humans are tribal by nature, the balkanization of the Internet shouldn’t surprise us. We may look back at 1990-2020 as a historic aberration where everything on the Internet was (for the most part) freely available. I’m not sure about you, but the collective takedown of Trump-land by private businesses made me deeply uncomfortable, while also accepting of why it had to happen. Highly encourage you to click and read the threads posted by Vitalik Buterin (founder of Ethereum) and Josh Constine below. Do also read about Inrupt - an effort to restore decentralization and data privacy back to users by Sir Tim Berners-Lee, the inventor of the Internet.Temporarily breaking out of my Twitter-minimization for a short thread on issues around free speech and the mass deplatformings of the last week. Obviously the riots were terrible, people still supporting DT are crazy, so moving on to some things that have not yet been said...But back to this situation, the fact that so many people who would normally never support such corporate power are now cheering tech CEOs running roughshod over democratically elected officials deserves some introspection. I'm not saying they're wrong... just some introspection.
Lyn Alden: Defining Inflation
Lyn Alden succinctly explains the three kinds of inflation - monetary (money printer go brrrr), asset prices (e.g. Tesla’s stock) and consumer prices (housing, healthcare, education). She further goes into explain the dynamics of why certain kinds of inflation happens while others don’t. I especially loved her discussion on the societal implications of inflation -
There is an age-old battle between labor and capital; the working class vs the wealthy. Over the very long run in a given society, the pendulum tends to swing strongly in one direction to the point where it causes societal issues, and then society pushes it back in the other direction where it tends to overshoot in that direction instead, until society pushes it back the other way again.
A healthy society finds a balance somewhere where both sides are reasonably satisfied, resulting in high productivity and social cohesion. A pendulum that is too far in one direction or the other tends to cause discontent, economic stagnation, and/or unsustainable bubbles.
Over the past four decades, the capital side has gained most of the political power, so that’s where the pendulum is at the moment. This is because things like labor offshoring and technological advancements put downward pressure on wages for many people, while shareholders, executives, and highly-paid professionals with in-demand skillsets can prosper within that system. Tax changes further supported this trend, where corporate tax rates and top income tax rates came down, while payroll taxes remained high, and per-capita healthcare costs and childcare costs skyrocketed:
Chart Source: St. Louis Fed
The reason the pendulum tends to swing too far is because when one group gets power, it becomes a self-reinforcing cycle into cronyism, where those with power and influence can further tilt politics in their favor and thus further entrench themselves, until it causes a breaking point and society unwinds that entrenchment.
My husband just concluded his paternity leave. Between the two of us, we got our baby to 6 months before needing external childcare. We are exceedingly fortunate to work at corporations that continue paying us salaries when we had our children. The legislation that ensures neither of us is fired during this period is called the Family and Medical Leave Act, or the FMLA.
The FMLA is a case study of elected officials on both sides of the aisle — and advocacy groups representing diverse interests — joining together to support common sense public policy for the good of our nation. Read a more detailed history here.
The FMLA also offers compelling evidence that progress is possible, even in the face of adversity, and that some victories are well worth the struggle. In the more than 20 years since its enactment, the FMLA has been used more than 200 million times and has helped mothers and fathers, husbands and wives, sons and daughters... all across the country.
FMLA saved our family’s collective sanity this year. The first half of the year, working two demanding jobs while pregnant and with a toddler at home, is a hell I do not wish upon my worst enemies. The Covid-19 pandemic has wreaked havoc on the gains that working mothers have made in the past four decades. A year ago, women had more jobs in the United States than men; in the December 2020 jobs report, ALL of the 140,000 jobs lost were among women. Lack of in-person schools, childcare, paid sick leave and parental leave can test the ability of even the most determined women to work. Let’s fix this.
Kansas representative Christina Haswood was sworn in to her office on Monday. The 26 year old is the youngest member of the Kansas legislature and its second Native American representative. She wore traditional Navajo regalia while being sworn in. The video of her ceremony is just lovely.
NYTimes: Why the Capitol Riot Reminded Me of WarA former US Marine who fought in the battle of Fallujah relates how the images and videos of the insurrection at the US capitol reminded him of war. A sobering read. Nihilism can be fun for a brief while.
Australian Strategic Policy Institute: Declassification of secret document reveals US strategy in the Indo-PacificThe outgoing US National Security Advisor declassified this document 21 years ahead of scheduled (it is speculated this was done to publicly pressurize the Biden administration to stay the course). Bolstering India’s standing in the region with military, intelligence, and diplomatic support is a key tenet of the strategy, along with explicit support for Taiwan.
Parler's cardinal security sin is known as an insecure direct object reference, says Kenneth White, codirector of the Open Crypto Audit Project, who looked at the code of the download tool @donk_enby posted online. An IDOR occurs when a hacker can simply guess the pattern an application uses to refer to its stored data. In this case, the posts on Parler were simply listed in chronological order: Increase a value in a Parler post url by one, and you'd get the next post that appeared on the site. Parler also doesn't require authentication to view public posts and doesn't use any sort of "rate limiting" that would cut off anyone accessing too many posts too quickly. Together with the IDOR issue, that meant that any hacker could write a simple script to reach out to Parler's web server and enumerate and download every message, photo, and video in the order they were posted.
"It's just a straight sequence, which is mind-numbing to me," says White. "This is like a Computer Science 101 bad homework assignment, the kind of stuff that you would do when you're first learning how web servers work. I wouldn't even call it a rookie mistake because, as a professional, you would never write something like this."
Getty Blog: Royal Cavities: The Bitter Implications of Sugar Consumption in Early Modern EuropeTrickle down tooth decay
The popularity of refined sugar in connection with the banquet culture brought with it a considerable increase in tooth disease first and foremost in the highest circles. To have cavities was a “royal” affliction and considered God’s punishment for gluttony. Those who continuously indulged in sweets and ate them in large quantities—rulers and their courts—were thought to be punished by fate with tooth decay.
With the frequent and eventually daily consumption of confectionery and sweetened products in the 18th and 19th centuries, sugar itself inevitably lost its status as a rare commodity or a luxury good, and tooth decay “trickled down” and became an illness of the middle classes. With the start of sugar beet cultivation in Europe and industrial sugar refinement after 1850, a flood of affordable new products soon appeared on the market and sugar became a “staple food of the underclass” with all the common consequences.
Disclaimer: The views and opinions expressed in this post are my own and do not represent my employer.