Dear Reader,
I remember the days when a $1 billion aid package was an astounding amount. It was so much that it was hard to comprehend.
Those days have certainly passed…
In the U.S., the U.S. Senate is currently reviewing a $1 trillion proposal to combat the COVID-19 pandemic. This proposal includes aid for airlines, $150 billion in secured lending and loan guarantees for distressed sectors, $100 billion for the travel and tourism industry, $300 billion for small business loans, and even cash payments to U.S. households that could begin as early as April 6.
Whether we agree or disagree, I think it is safe to say that we’ve never seen anything like it before.
Not to be outdone, the European Union agreed on a €750 billion (~$1 trillion) emergency loan package with support from the International Monetary Fund (IMF) designed to prevent a sovereign debt crisis. This is, of course, on top of what each individual country in the EU will do in terms of stimulus for its own country.
What does this all spell? Inflation…
And the most ironic part is that gold isn’t playing its expected role amid this crisis and inflation. It’s only up about 18% above its five-year average. This is the moment that gold bugs have been waiting for. But if the financial crisis of 2008–2009 didn’t send it above $2,000 an ounce (let alone $10,000/oz)… and neither has the COVID-19 outbreak…. I’m not sure what will.
With interest rates as low as they are, in an inflationary environment, my interest is in high-quality real estate assets, equities, and if you have access, investing in private, early stage technology companies.
I’ll keep monitoring the situation. But for now, let’s turn to our insights.
The Federal Communications Commission (FCC) just completed the largest wireless spectrum auction in history. Combined, wireless operators spent over $7 billion acquiring high-band radio frequency (RF) spectrum for their 5G wireless networks.
This spectrum is used for transmitting and receiving voice, video, and data over wireless networks. The use of spectrum is regulated in each country and coordinated both globally and at regional levels. The millimeter-wave spectrum that the FCC auctioned will be used to enable lightning-fast 5G speeds of more than 1 gigabit per second.
The biggest winner in this latest auction was Verizon, which acquired $3.4 billion worth of spectrum through a subsidiary. AT&T was next, acquiring $2.3 billion worth of spectrum through a subsidiary.
Next was T-Mobile, which acquired $930 million worth of spectrum. And then Sprint acquired $113 million worth. Because these two companies are merging, they were careful not to bid against each other. We can view their combined action purchase as one.
RF spectrum auctions don’t happen all at once. They occur over time with local regulatory bodies offering up blocks of spectrum during each auction. We can think of this latest auction as a large, supplemental RF spectrum auction to the existing RF spectrum already owned by AT&T, Verizon, and T-Mobile/Sprint.
The big takeaway here is that the wireless operators are full speed ahead on 5G. Even amid all the panic surrounding COVID-19, these companies are spending billions of dollars on building out their nationwide 5G wireless networks and billions more on additional RF spectrum that will ultimately be used to complete their 5G network coverage. Whether the U.S. gets back to work quickly after this period of isolation or takes longer than expected, the wireless operators will continue their network build-out.
5G isn’t a “nice to have” technology. It is an essential piece of national infrastructure. Any country will need 5G networks just like we need roads, bridges, and tunnels… perhaps even more so.
And that’s why the 5G build-out has not slowed down in the slightest. In fact, the carriers are moving with more urgency than ever before. Countries that do not migrate to 5G wireless technology will be left at a competitive disadvantage.
That’s because demand for wireless bandwidth is higher than it has ever been. Instead of going out, many people are having FaceTime chats, streaming movies, playing games, and pursuing other means of online entertainment.
So this is an exciting development. We’ll see 5G rollouts continue as planned. And once the current market correction has run its course, we’ll see the best 5G stocks skyrocket.
For investors who aren’t positioned for 5G, now is the time. I recently released a presentation from the Shubert Theatre, a stone’s throw from Yale, where I am an alumnus. There, I revealed my No. 1 large-cap 5G stock for 2020. See the full presentation for yourself right here.
Ginkgo Bioworks just committed $25 million worth of in-kind services to aid the discovery of a treatment for COVID-19. I’ll explain what that means in a minute. First, a quick reminder…
Ginkgo Bioworks is an incredible company that I have followed for years now. This is a synthetic biology company that creates custom-built organisms to order. Here’s what I mean…
Ginkgo Bioworks focuses on genetic programming. Its underlying premise is that organic cells are programmable. Just like computers. The difference is that Ginkgo Bioworks programs DNA instead of software. That’s synthetic biology.
And there is a wide range of applications for this technology. It can be used to create probiotics, flavors, sweeteners, cosmetics, pharmaceutical ingredients, or even an organism programmed to clean up oil spills in the ocean.
The $25 million worth of services pledged will allow any company working on a treatment for COVID-19 to use Ginkgo’s foundry, diagnostics, and design capabilities as it sees fit. The hope is that blending synthetic biology with the more traditional biotech approaches will accelerate the development of a vaccine or therapy.
This is a smart move. Historically, the biotech sector has been slow to adopt new technologies. With only a few exceptions, the biopharma industry has been slow to adopt synthetic biology… There is a lot of “muscle memory” in the industry that is resistant to change. In fact, it’s only in recent years that we have seen bleeding-edge breakthroughs like CRISPR genetic editing technology.
So Ginkgo Bioworks is demonstrating how capable its technology is with this move. That’s great for the industry. And it will certainly raise Ginkgo’s profile.
And the costs of delivering the $25 million of services won’t be a problem for Ginkgo. It just raised a whopping $290 million in its Series E venture capital round last September. That’s when we first talked about the company.
I said back then that Ginkgo was on track to go public within 12 months or so. And I believe it is still on track. This company is now valued at $4.8 billion… And it is a company that pretty much no one has ever heard of, doing things most people don’t know are possible. This is why raising its profile during the COVID-19 pandemic is a smart move. And I believe that it’s a precursor to an IPO once the market returns to normal.
The White House Office of Science and Technology Policy put out a “call to action” for artificial intelligence (AI) experts to help with the COVID-19 outbreak. And the private sector just responded.
This week, researchers from the Allen Institute for AI, Chan Zuckerberg Initiative (CZI), Georgetown University’s Center for Security and Emerging Technology (CSET), Microsoft, and the National Library of Medicine (NLM) at the National Institutes of Health released the COVID-19 Open Research Dataset (CORD-19) of scholarly literature about COVID-19, SARS-CoV-2, and the coronavirus group.
That’s a lot of information at once. But here’s the important takeaway…
This dataset contains everything the world knows about coronaviruses. Scientific papers… peer-reviewed studies… They’re all in this dataset.
In all, the dataset houses nearly 30,000 articles. And here’s the important point – it is machine-readable. That means it can be read by a form of AI called machine learning.
So AI experts are going to unleash machine learning on this dataset. It will learn everything there is to know about COVID-19 and other coronaviruses. Then it will formulate possible solutions and propose paths of research that offer strong opportunities.
This is a great initiative and another great example of the public-private partnership that has been happening to address the COVID-19 outbreak. I can’t wait to see what the AI comes up with. And I have no doubt it will be helpful.
Thinking big picture… This is the first time in history that we can apply AI to one of the world’s most pressing problems in real time. We have the ability now to quickly organize the world’s knowledge base on any problem and then use AI to analyze all known work in search of insights. This is something that no one person or team of experts could ever do.
As a technologist, I believe technology is the key to solving the world’s most pressing challenges. When COVID-19 is inevitably brought under control, we will have bleeding-edge technology like artificial intelligence, synthetic biology, or CRISPR genetic editing technology to thank for it.
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.
