China and AI: Activity but Cash Friction
March 18, 2020
Despite being a communist country, China loves money. One way that China loves making money is through new technology startups, especially with AI startups. The South China Morning Post examines the current market of Chinese AI startups in the article, “China’s AI Start-Ups Are Closing More Funding Deals, Yet They’re Still Attracting Less Money Than The US.”
According to the article, Chinese AI startups have attracted more funding deals than their US counterparts, but they are not bringing in as much money as the past. The trade war with the US is a big determiner. The US continues to dominate in the AI market, but that has steadily been dropping from 71% in 2014 to 39% in 2019. The US also has more AI fundraisers than China. The US has a 64% of AI startup fundraising, up four points since the last year, while China only had 11%. Overall AI generated 2019 $26.6 billion across the globe in 2019.
China only had $2.9 billion from that total.
The big problem is that China lacks creativity in their AI startups:
“‘Investors are much more cautious now, especially after the second half of 2018 as we sensed a bubble – most AI projects haven’t produced strong performance,’ Chris Lai, a partner at Beijing-based Shunwei Capital, said. ‘We haven’t seen many AI applications that are beyond imagination, most are used in surveillance cameras.’”
There are some startups that add some spice to the Chinese AI market and bolster the hope that the country will be an AI world leader by 2030. Some of these startups include Horizon Robotics and facial recognition startup Face+++. The market is predicted to shift to vision and hearing applications with smart home appliances.
China might be moving towards more smart home appliances, but it is China for goodness sake! China has an authoritarian government, so it wants more AI security technology to track its citizens.
Whitney Grace, March 18, 2020
Deep Learning Startups May Encounter a Gotcha
March 14, 2020
Though fragmented, the deep learning AI market is growing rapidly. Anyone wishing to launch (or invest in) such a firm may want to check out Analytics India Magazine’s article, “Common Pitfalls that the Deep Learning Startups Fail to Recognise.” Writer Sameer Balanganur describes prevalent missteps under these headings: Not Investing Enough in Data and Powerful Processors, Not Accounting for the Cloud Charges, Expensive Data Cleansing, The Edge Cases, and Hiring the Right People.
The part that struck me was this description under Expensive Data Cleansing, as it Illustrates something many fail to understand:
“Training the model nowadays to achieve the state-of-the-art results [still] involves a lot of manual cleaning and labelling of large datasets. And the process of manual cleaning and labelling is expensive and is one of the largest barriers the deep learning startups face. … Although as time passes, the AI systems are moving towards complete automation, which will significantly reduce the cost. However, these AI-based automation applications still need human intervention for years to come. Even if there is full automation achieved, it’s not clear how much the margin of cost and efficiency will improve, so this becomes a matter of whether one should invest towards processes like drift learning and active learning to enhance the ability.
We noted:
“Not only expensive, the human intervention sometimes hinders the system’s creativity, but they might also do it by selecting what is essential for an algorithm to process or not using deep learning for a problem it can easily solve. Many times, deep learning is seen as overkill for many problems. The costs incurred by human intervention and cloud are interdependent. Reducing one means an increase in another.”
AI investment could be quite profitable, if one considers carefully. As always, look before you leap. See the write-up for more details.
Cynthia Murrell, March 14, 2020
In the UK, Brexit Leads to Taxit for Techs
March 13, 2020
US technology companies are likely to face a rocky 2020. The Coronavirus is creating some problems. If the information in “US Tech Companies Will Be Hit with New UK Tax in Just Three Weeks” is accurate, those juicy margins may be trimmed. The write up states:
The UK government said Wednesday [March 11, 2020] that it’s moving ahead with a 2% tax on revenue from digital services such as search and advertising starting on April 1. The levy will apply to firms with global sales of more than £500 million ($648 million), with at least £25 million ($32.4 million) coming from UK users.
Is the tax discriminatory? Yep.
What happens if the US technology companies pay up?
That’s easy. There are a number of European entities eager to implement a taxation model that generates revenue.
What happens if the US retaliates?
There will be collateral damage.
How likely will countries be to escalate if the tax fails? Some may implement a simple but Draconian solution: Throttling or blocking maybe?
Monopolies are good for those who obtain money from the firms in the cat-bird seat. Some European countries may not share the same view.
Stephen E Arnold, February 13, 2020
India Finance: Sharia Issue
March 9, 2020
DarkCyber found the information in “Sharia Fintech”: Startups Race to Tap Indonesia Growth by Aligning with Islam” suggestive. Is the information spot on? Possibly, the source makes a great effort to explain trust. The main point of the write up strikes DarkCyber as:
Winning over conservative Muslims like Iswara in the world’s most populous Muslim-majority country is both a challenge and multi-billion dollar opportunity for fintech firms that are riding its mobile internet boom and aim to sell financial services. Of Indonesia’s 270 million population, half lacks bank accounts but most now have mobile phones.
Implications? A handful.
Stephen E Arnold, March 9, 2020
Quantum Computing Dust Up: Is the Spirit of Jeffrey Influencing Some Academics?
March 2, 2020
If you are into quantum computing and the magic it will deliver… any minute now, you won’t bother reading the MIT Technology Review article “Inside the Race to Build the Best Quantum Computer on Earth.” Please, keep in mind that MIT allegedly accepted funds from the science loving Jeffrey Epstein and then seemed to forget about that money.
Here’s the key sentence in the write up:
None of these devices—or any other quantum computer in the world, except for Google’s Sycamore—has yet shown it can beat a classical machine at anything.
One minor point: MIT’s experts appear to have overlooked China, Israel, and Russia Is it really ignoring quantum computing?), to name three nation states with reasonably competent researchers.
The focus on IBM and Google is understandable. Did DarkCyber mention that IBM is contributing to MIT’s funding; for example, the IBM Watson Lab?
What’s the point of the MIT Magazine research? Let’s try to see if there are quantum-sized clues?
First, Google asserted in 2019 that the fun loving folks in Mountain View had achieved “quantum supremacy.” IBM responded, “Nope.” This write up expands on IBM’s viewpoint; specifically, Google’s quantum magic was meaningless. Okay, maybe from IBM’s point of view, but from Google’s, the announcement was super duper click bait.
Second, IBM is doing research and business development in parallel. Google sells ads; IBM sells … what? Consulting, mainframes, managed facilities, and Watson? Google sells ads. Ads generate money for Google moon shots and quantum PR. IBM spends its money on ads. Okay, that’s a heck of a point.
Third, IBM wants to build a quantum business that does business things. Google wants to build a cloud computer to [a] sell ads, [b] beat Amazon, IBM, and Microsoft in the cloud, [c] accomplish a goal like climbing a mountain, [d] it is just Googley, [e] two of the four choices.
Net net: The write up walks a fine line. On one side is IBM and its checkbook and on the other is the Google. Is the write up objective? From DarkCyber’s point of view, like artificial intelligence, quantum computing is just around the corner.
DarkCyber is checking to make sure that when NewEgg.com offers quantum components, the team can buy one. For now, we will stick with the Ryzen 3900x: It works, is stable, and does jobs without too much fiddling.
Quantum computers require a bit more work. But when deciding between funding and ads, maybe fancy dancing around quantum computing is the tune the MIT band is playing?
Stephen E Arnold, March 2, 2020
Hacked Personal Info: Seems Cheap
February 27, 2020
This comes as no surprise to us, but apparently it is news to some. The SmartDataCollective announces, “Terrifying Big Data Report Shows Anyone Can Get Your Info for $2.” Writer Matt James points to the recent case of WeLeakInfo as an illustration of how little it can cost to buy sensitive personal information online. He writes:
“The eerie fact that WeLeakInfo was selling access to private data for as little as $2 should leave everyone worried – could anyone with some loose change really have your password, social security number, home IP address or email? Yes, if you were a victim of any recent data leak or cyber attack. According to a source in the US Department of Justice, data sold through the site originated from leaks and cyber attacks affecting large online service providers like WeWork, Regus, and many more. Online travel agents and websites that store user information – particularly data about user credentials, payment details, and personal information – were the primary targets of attackers. The 12 billion items collected on the site was not an exaggeration. It seems that a common bot can scrape a huge volume of personal data in just a few hours. Coupled with more modern attack methods such as botnets and smart scrapers, the amount of data that a coordinated attack can collect is staggering. More importantly, there is no data not valuable enough to sell.”
Yes, we’re reminded, it is not just the obvious data like credit card info, addresses, and social security numbers we should be concerned about. Login information, for example, can be used to facilitate cyber-attacks. James runs through the measures one can take to keep data as secure as possible: limit what you share and review privacy policies when you do; use a VPN or proxy server; check in with sites like Have I Been Pwned now and then; and change your (strong) passwords every six months. A good password manager can securely generate and keep track of strong passwords.
Cynthia Murrell, February 27, 2020
Amazon Costs: Kubernetes to the Rescue
February 27, 2020
How much does an AWS customer pay for a specific service? DarkCyber knows that the taxi meter approach makes sense for the company that owns the medallions, the taxis, and possibly a few important people.
The taxi meter method in the cloud is a bit of a mystery — until the invoice arrives. “The Story Behind My Talk” explains a process which, according to Tuananh, can “reduce EC2 billing up to 80%.”
How does this money slip from the massive tractors of the Bezos bulldozer?
The article explains:
I started with a managed GKE at first using their free $300 credit, to learn the basic of Kubernetes; but then later on use kops to setup a production cluster with AWS.
Some of the changes I did for the production cluster is:
- Setup instance termination daemon to notify all the containers + graceful shutdown for all the apps.
- Setup multiple instance groups of various size and availability zone, mixing spot instances with reserved instances. This is to prevent price spike of certain spot instance group; and minimize the chances of all spot instances going down at the same time.
- Calculate and provision a slightly bigger fleet then what we actually need so that when there were instances shut off, there won’t be service downgrading. Because spot instances are so cheap, we can do this without worry much about the cost.
- Watch to see if there were scheduling failure to scale the reserved groups.
The payoff according to the article:
“The overall cost saving for EC2 was around 60-70% because we need to mix reserved instances in and provision a little higher than what we actually need. We were very happy with the result.”
Will AWS reconsider how it deals with EC2 billing? Does a bulldozer need diesel fuel?
Stephen E Arnold, February 27, 2020
A $600 Desktop Quantum Computer That Breaks Encryption. Wow or Woof?
February 17, 2020
DarkCyber spotted a remarkable claim. A fellow named Dan Gleason, created a portable quantum computer. The idea is that this computing system can hack passwords and maybe cyber security protocols.
The Assertion
The information appeared in an article in BetaNews. “The $600 Quantum Computer That Could Spell the End for Conventional Encryption” reports as actual factual:
Using easily available parts costing just $600…, QUBY runs recently open-sourced quantum algorithms capable of executing within a quantum emulator that can perform cryptographic cracking algorithms. Calculations that would have otherwise taken years on conventional computers are now performed in seconds on QUBY.
Sounds good, almost like a folding mobile phone from Motorola or Samsung, the marketing collateral from an enterprise search vendor like Coveo or LucidWorks, or the breathless assurances of Weaviate. (Dare I say Google or Watson?)
The Team
Greg Morrell, Founder and President, Active Cypher. Formerly president of Amtec Technologies, a management and capital placement limited liability company, and before that a vice president of development at LNR Property Corp. More information about the company appears in an ETS article.
“Dan Gleason is the chief architect and product developer of Active Cyper’s file level security solution. His special skills are in bring elegant solutions to complex problems.” Source: Active Cypher DarkCyber believes that a $600 portable quantum computer is a complex challenge but with many, many problems to solve. Mr. Gleason, according to Active Cypher’s Web site, possesses “special expertise.” This is “in all Microsoft products and programs.” The “all” is interesting.
Caspian Tavallali is the chief operating officer for Active Cypher. He worked in the office of the chairman at the Parman Capital Group. Previously he worked on an MBA at IE Business School in Madrid.
Mike Quinn, Chief Strategy Officer, Active Cypher. Mr. Quinn worked at Citadel Consulting and previously at Microsoft as “Partner” and General Manager of the Enterprise Cyber Security Group. He also worked at Cisco Systems in “services”.
The teams does not appear deeply steeped in the technology of quantum computing in use at Google, IBM, and other firms able to afford the research, demonstrations, and systems.
What’s the business model for the open source infused portable quantum computer? Here’s the answer according to Mr. Gleason:
In response to the threat, Active Cypher has developed advanced dynamic cyphering encryption that is built to be quantum resilient. Gleason explains that, “Our encryption is not based on solving a mathematical problem. It’s based on a very large, random key which is used in creating the obfuscated cyphertext, without any key information within the cyphertext, and is thus impossible to be derived through prime factorization — traditional brute force attempts which use the cyphertext to extract key information from patterns derived from the key material.”
Ah, ha. License the company’s dynamic ciphering encryption!
Additional Information
More detail about the company’s encryption innovations appears in “Maintaining a Zero-Trust Security Model.” That document references quantum in the context of “quantum resilient.” The idea is that the firm’s approach will not be breakable by quantum computer technology directed at decryption or similar functions. There’s no reference to a portable $600 quantum computer. DarkCyber finds this interesting since the white paper was updated in February 2020. (Amazon has a number of patents related to its zero trust systems and methods. Some of these are reviewed in our Amazon Blockchain white paper. You can request a free summary at this link.)
Who is buying into this concept? The write up suggests that Microsoft is curious and attendees at the RSA Conference (if it is held) will be able to check out the device. The algorithms will take more time to analyze unless one has access to Google’s or IBM’s quantum systems.
Observations
A few observations seem to be in order:
- What comprises a quantum computer? Hand crafted hardware from IBM or systems from DWave?
- Are there programming languages for the portable quantum computer?
- How are the “instabilities” associated with quantum demonstrations resolved?
- How was Mr. Gleason able to create a “$600” quantum computer when the cost of Google’s DWave gizmos such down money in seven figure gulps.
Net Net
If true the $600 quantum computer is “real,” Mr. Gleason will be the Marc Zukerberg – Sergey Brin – Steve Jobs of quantum computing. If not true, Mr. Gleason will be well positioned to work as a social media PR expert.
For now, DarkCyber will sit on the quantum fence. Why? The DWave quantum computer costs about $15 million. DarkCyber is not sure if this includes the cost of staff, refrigeration equipment, and maintenance.
But $600. Almost sci-fi made real in the actual factual world.
Stephen E Arnold, February 17, 2020
Live at Five: Queue the Avatar! Slash Costs!
February 12, 2020
Thomson Reuters has been looking for a revenue hockey stick since Michael Brown and Gene Garlan departed. The company has not been a home run in the innovation department. Palantir Technology did not provide the zoom zoom some stakeholders wanted. The Thomson “labs”. Sorry, no TikTok from those hard working Thomson Reuter wizards.
The fix, however, may be deep fakes, automated news, and some AI sizzle. Reddit, a social information service, posted a link to “Reuters Built a Prototype for Automated News Videos Using Deepfakes Tech.” The write up explains:
Designed as a proof-of-concept, the system takes real-time scoring data from football matches and generates news reports complete with photographs and a script. Synthesia and Reuters then use a neural network similar to Deepfakes and prerecorded footage of a real news anchor to turn the script into a “live” video of the news anchor giving up-to-the-second scoring updates.
The technology comes from Synthesia, founded in 2017. (One of the company’s investors is the Sharktank and video savant Mark Cuban.) The company describes itself as a “next gen content creation” outfit.
You can try the service by navigating to this link. I said I was Nancy. And this fake humanoid delivered a short summary to me:
The company’s Web site says:
Go beyond the regular edit suite … forge more meaningful relationships with your global audiences using Synthesia’ powerful content tools.
Is this the winner Thomson Reuters has been seeking for a decade or so? If the company applies its 10-10-20 formula, that’s possible, just unlikely. If today’s Thomson Reuters can manage some of the Lord Thomson of Fleet magic, the professional publishing and news company could disrupt how news can be generated and streamed at bargain basement rates. Hasta la vista talking heads.
An avatar with real AI will present the news: Objective, content rich, and without the hassles of humans, vacations, benefits, and dealing with wimpy humanoid issues like “my manager is not treating me fairly.”
Worth watching.
Stephen E Arnold, February 12, 2020
Detroit Sure Understands Hollow Out and May Have Google Insight
February 7, 2020
Detroit. Interesting place. DarkCyber read “Google’s Cash Cow Search Business Is Being ‘Hollowed Out’.” If there is one city whose residents and businesses understand the concept, it is probably Detroit.
DarkCyber noted this statement in the write up:
“This hollowing out of search is real,” Mark Shmulik, an analyst at Sanford C. Bernstein, wrote in a note to investors after the results. To maintain growth at even this lower level, Google will have to generate more revenue from its Maps service, image search and shopping search ads, he said.
Why is this an issue? The article states:
Google search is one of the most profitable businesses ever created, helping the company amass a cash hoard of more than $100 billion. It took Google from a garage in Silicon Valley to a trillion-dollar giant that dominates digital advertising, online video, maps and email.
The report points out:
Google can only stuff so many ads onto its website without lowering the quality of search results. On mobile phones, ads often fill the entire screen, forcing users to scroll down if they want to see free listings.
What’s the problem? Mobile search is booming. Yep, but peak mobile may be approaching.
Good points and from Detroit.
Stephen E Arnold, February 7, 2020
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