The Newsletter You Didn't Subscribe To - Saluki / Persian greyhound
Your daily dose of nonsense - Monday, 24 August 2020
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Decoupling of Chinese tech
So a few things happened between the US and China:
First, there was a trade war between them - some US policymakers feel like China is benefiting more from international trade than the US is and the US wants a better deal; then
Huawei’s phones and telecommunication infrastructure equipment gets banned for alleged national security concerns and it is now illegal to do business with Huawei and sell them chips with American technology to them (Huawei now faces a shortage of chips as a result); then
TikTok and WeChat are soon to be banned too, again, for alleged national security concerns (and TikTok and WeChat are now suing).
Are all these problems just political maneuvering? Would it all go back to the way it all used to be after the November US presidential elections?
My opinion? Probably not. Even if Biden wins, I think American policy towards China might still be more or less the same. For example, American legislation on Huawei was by large very uncommonly bipartisan. Concerns on TikTok were also very bipartisan. And according to a July survey by Pew Research, the polling service, most Americans (regardless of age or political leanings) have unfavourable views on China:
Source: Pew Research
In short, China cannot rely on things going back to the way it used to be. As a result, the country is working towards reducing its reliance on American technologies. For example:
They are building their own GitHub - GitHub (owned by Microsoft, a US company) is a popular service used to store code, and it’s also used to enable software developers to collaborate on the code. This means that code from Chinese developers could be held hostage unless you build your own service that you can control yourself.
They are bolstering their own semiconductor foundries - Foundries are where the chips are made. And since no one is allowed to sell chips to Huawei, you gotta have your own capability for manufacturing chips.
They are designing their own chips - so most microprocessors of major significance are based on the x86 (predominantly Intel and Advanced Micro Devices, both US companies) or ARM (UK based, but comes under US jurisdiction anyway) architectures. So now, they are focusing their efforts on the open-source RISC-V architecture (something that I have briefly talked about in a previous issue but in a different context).
Palantir
To me personally, Palantir will always be one of those mysterious businesses that I keep hearing the name of, yet I have no idea what they actually do.
I’ve heard anecdotes about their business, and they range from “they are the epitome of Big Data and Artificial Intelligence” to “they do IBM-like work (i.e. generic corporate tech work, but they make it sound glamorous”. I can never confirm any of these anecdotes.
I thought that I’m oblivious to their business because I can be a really ignorant person. But, in retrospect, I think that it’s their very intention to be secretive. Either that, or they do actually want to tell everyone of all the cool things they do, and they are beaming with eagerness, only problem is that their contracts all come with non-disclosure agreements. Or maybe it’s both?
I’ve had first-hand experience with the bipolar nature of its external communications. A long while back, a Palantir recruiter called me on my phone. Here’s a stylised (and probably a tad bit dramatised for your entertainment) version of the conversation (but the point’s there nonetheless):
Palantir recruiter: Hey, would you like to hear about our roles that we are hiring for?
Me: Sure.
Palantir: First off, how much do you know about Palantir?
Me: All I know is that you guys are pretty secretive about the stuff you do.
Palantir: Yeah, we tend to do that, but we're doing our best to improve that. We have a lot of information available on our website now. Would you be interested in hearing more about us and about the role nonetheless?
Me: Yeah, sure.
Palantir: Okay, let me see if I can get the hiring manager to speak to you. I’ll call you back.
Palantir: (Calls back) Hey, sorry, the hiring manager won’t be able to speak with you. It does sound like you are not enthusiastic about the role.
Me: Mate, you’ve not even told me what’s the role about!
Okay, I didn’t say that last sentence out loud. But really, I was bemused. How did they judge my lack of interest? Did they actually have some badass Big Data / Artificial Intelligence thing listening to the call the whole time and it figured out from the tone of my voice and choice of words that I wasn’t a good potential candidate? Or was this a game of “bait, then play hard to get” to increase the sense of mystique and exclusivity, i.e. is this a power move? Or is it both? I can never tell.
So on Friday (21 August), TechCrunch was able to shed a little light on Palantir’s financial numbers and reported that they had received screenshots of Palantir’s US Securities and Exchange Commission draft filing dated 20 August 2020. TechCrunch reports that revenue in 2019 was $742mil, up from $595mil in 2018. I’d say that top line growth of about 25% is really good. On its bottom line, though, it reported a 2019 net loss of $580mil and an “almost identical” net loss figure in 2018.
And again, to those that insist that the software business has zero-marginal cost of adding new customers, Palantir is reported to have spent $450mil in sales and marketing for 2019 and 2018 apiece. That’s nearly 61% of 2019’s revenue. Even if they turned this cost lever down to zero, (and assuming that revenue stays the same) they would still report a net loss of about $130mil.
But who knows. Maybe the inflection point for profitability is near. Maybe the current pandemic would drive more customers towards them for their tech solutions. Maybe with their planned IPO, they would finally be less secretive.
Cicada zombies
This is a very interesting article by CBS News - basically there is a fungus that controls the minds of cicadas.
I mean, there are other fungi that controls the minds of other insects too (and we humans use these fungi for medical and culinary uses) - but it’s just that the way this cicada fungus spreads is very interesting:
Massospora, a parasitic fungus, manipulates male cicadas into flicking their wings like females – a mating invitation – which tempts unsuspecting male cicadas and infects them.
And
The spores eat away at the genitalia, butts and abdomens of the cicadas until they eventually fall off, replacing them with fungal spores — a brutal process for the insects, which just spent more than a decade underground.
Not that sexually transmitted diseases are fun, but this sounds especially awful.