Dear Reader,
Well, the top is in for the market. Fear not… I’m not talking about the technology market. We have plenty to look forward to there. I’m referring to the oil market.
Saudi Arabia’s national oil company, Aramco, finally went public. Aramco raised $25.6 billion from the IPO, making it the largest initial public offering in history. It’s one for the record books. And the company hit a $2 trillion valuation as of today. Hard to imagine.
Commenting on the world’s top oil-producing company might seem a strange choice for The Bleeding Edge. After all, my mission is to bring you the best – and most profitable – insights from the world of high technology.
But we’re going to look back in 5- or 10-years’ time at this moment as the peak of the oil industry. Why?
Simple. The technological advancements in the energy production industry, combined with the rapid shift toward electric vehicles, are going to send the demand for crude oil off a cliff.
The implications will be vast for both the oil industry and the countries whose economies are primarily built on oil exploration.
The chaos that will ensue in those markets when the free flow of money dries up will be hard to overestimate. This will be one of the largest societal challenges that we’ll see during the next 20 years. That’s what technology does after all. It disrupts.
So let’s keep our investment focus on the kinds of technologies that are disrupting legacy players, improving business operations, and bettering quality of life.
And that leads us to today’s insights…
Back in 2015, Amazon acquired a semiconductor company called Annapurna Labs. The goal was to design chips in-house that could help Amazon Web Services (AWS) deliver better, faster, and cheaper cloud-computing and storage services.
Many saw this as an unusual move since Amazon had no experience designing semiconductors. But it turns out Amazon had a bigger plan…
At the 2019 re:Invent conference that we talked about on Monday, Amazon announced three new custom-built semiconductors.
The first is the second-generation of the Graviton processor, which came from the Annapurna acquisition and is designed for servers. Amazon said that this new chip offers 40% better price performance than Intel processors.
The second chip is an accelerator for artificial intelligence (AI) workloads called Inferentia. It’s designed to support natural language processing, text translation, and image classification. Amazon said this chip could increase speed by a factor of three at 40% of the cost of existing solutions.
And the third chip is a field-programmable gate array (FPGA) accelerator that speeds up data storage.
This represents a major shift in the semiconductor industry. By designing its own chips in-house and outsourcing manufacturing to lead foundries like Taiwan Semiconductor Manufacturing Company (TSMC), Amazon is cutting out old incumbents like Intel.
And it’s not just Amazon. Facebook, Google, and Apple have already gone this route. Each year, they produce more and more of their own semiconductors. These large tech companies are changing the landscape of the semiconductor industry.
It doesn’t mean bad news for the entire semiconductor industry. But the old way of designing one fixed architecture and expecting to sell that same product to everyone is over.
And that’s bad news for Intel. But TSMC, semiconductor companies that bring new products to market quickly, and the end consumers (like us) benefit greatly.
TSMC benefits from the increased business. And consumers benefit because they get better cloud-based web services and consumer electronics products at better prices.
So just like Amazon swooped in and disrupted the retail industry, the smart speaker industry, and the cloud-based services industry, it is going to do the same thing to the semiconductor industry.
Let’s shift gears a bit to the world of genetic sequencing technology…
Famed Harvard geneticist George Church was on CBS’s 60 Minutes program recently. It was an interesting discussion about the future of matchmaking. And Church talked about his interest in developing a DNA-based dating application.
Not what we expected to talk about in The Bleeding Edge, I know… but wait!
What Church is talking about is an application similar to Match.com or other online dating services… except it would also analyze users’ DNA. In fact, that would be step one. The compatibility scores based on beliefs, hobbies, interests, and so on would come second.
This may sound a little off-putting, but there is sound logic to this approach for people who want to have kids. That’s because certain genetic combinations can create a high probability of offspring with an awful genetic disease.
As we know, we each have dominant and recessive genes. The dominant genes are what determine our expressed traits. They supersede our recessive genes.
For this reason, healthy adults can have disease-causing recessive genes and not even know it. If two adults with disease-causing recessive genes have children, there is a high chance their children would suffer from the genetic disease despite both parents being perfectly healthy.
That’s where the DNA analysis comes in. Church’s idea is to screen the DNA of potential matches who eventually plan on having children… before they ever meet.
If the DNA analysis shows that the two have a higher chance of passing on a genetic disease to their children, they could choose to move on before ever developing any emotional connection with one another. Alternatively, they could choose to not have children or adopt.
As weird as it sounds, I think this is the future of dating. And I should point out that Church would not be talking about this idea if he didn’t think it had legs. Church is a prolific entrepreneur in the biotechnology industry, having cofounded more than 10 early stage companies in this space.
And it’s worth pointing out – the more people who used a DNA-based dating service like this, the faster we would essentially “breed” these genetic diseases out of existence. And, of course, the reality is, we are already using CRISPR technology to correct these unwanted conditions…
Speaking of CRISPR, we have outlined numerous new applications for CRISPR genetic editing technology in these pages recently. It seems a new use case is discovered every other week. And here’s yet another one…
DARPA, the Defense Advanced Research Projects Agency, wants to crowdsource CRISPR-based pathogen detectors. It put out a call to researchers to produce such a product. And it has $60 million in award money to offer the company, group, or individual who can make it work.
The goal is to develop devices that can detect pathogenic threats by performing 1,000 diagnostic tests in fewer than 15 minutes. Anyone who can do this will get the prize money.
As we can imagine, devices like these would be for field use. They would be taken to sites of disease outbreak to mitigate the threat. And the interesting part is DARPA thinks CRISPR is the way to do this. Here’s why…
CRISPR uses what’s called “guide RNA” to seek out the disease-causing targets in the body. Once the guide RNA finds the target, it binds to it and starts editing the gene. When that happens, it’s not hard to identify these rapid changes… It’s like a loud signal goes off, warning us of a pathogen.
And that’s where a CRISPR-based detector would come in. It could take samples from the air, water, or blood and quickly determine if there was a dangerous pathogen present. That would be a great tool for managing viral outbreaks or bioterrorism.
As uncomfortable as it makes us, bioterrorism is a very real threat in the near future. This is something I discussed with Glenn Beck when I appeared on his podcast last month (catch up here). So it’s great to see DARPA taking steps to develop tools that will be helpful as countermeasures.
The other interesting piece of this is that DARPA is crowdsourcing the design. It’s not trying to develop the detectors itself. That’s a smart approach that will get results far more quickly than trying to do it in-house. Incentive-based crowdsourcing is the future… It’s great to see government agencies taking this approach.
I’m confident that a solution can be found. This kind of tool would be invaluable to counter the threats that modern society will face in the years ahead.
Regards,
Jeff Brown
Editor, The Bleeding Edge
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The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
