The difference waves of AI
- Internet AI – Facebook, Netflix, Google search
- Business AI – Palantir
- Perception AI – Tesla cars
- Autonomous AI – Tesla self driving, Google self driving
- Silicon Valley
- Zhong Guan Cun – Beijing
State of the Union
- We are in the stage of implementation/application as opposed to RnD
- having access to more data is more important than have expertise to do more RnD
- having solid AI engineers is more important than AI researchers
- We are still far from general AI
- Key ingredients
- maybe work of strong AI algorithms engineers
Key differences between eco-systems
- Silicon Valley businesses are mission and core values driven while Chinese businesses are pragmatically focused on profitability.
- Silicon Valley businesses stay in bits and binaries offloading the brick and mortar to external vendors vendors while Chinese businesses extend their business model into the brick and mortar (online to offline)
- Silicon valley prefers one size fit all strategy, Chinese businesses utilized localized solutions often investing/acquiring in local startups
- Americans treat search engines like Yellow Pages (come and leave fast) while Chinese treat search engines like shopping mall (come to linger around long)
- Silicon Valley is adversed to copying preferring to be unique Chinese business copy the heck out of each other
- Abundant data – quality and quantity aided by their online to offline initiatives
- hungry entrepreneurs
- AI scientist
- AI friendly policy environment – strong emphasis by Chinese government
- Hardware manufacturing know how – Shen Zhen
- unparalleled supply chain flexibility – XiaoMi
Silicon Valley Advantage
- Microchip manufacturing know-how
Trends within the Chinese eco-system
- Darwinian eco-system has lead to extreme levels of competition
- Chinese companies have already moved past the stage of clone Silicon Valley business models
- Businesses innovate to build a defensive moat around themselves. Local businesses have advantage, with no timezone differences to deal with, decision making is relatively faster.
- Online to offline
- an essential ingredient to building strategic moats
- caused the decline of cash use
- Chinese government information systems will be able to leap frog US government information systems
- Google – impeccable safety
- Tesla / China – trial by fire
- key to winning the Autonomous AI race
- is the bottleneck technology (Silicon Valley) or policy (China)?
- having cheap labor is no longer going to be a source of advantage in a world heavily powered by automaton. Developing countries hoping to employ this well tested strategy to progress will not be able to do so anymore
- Estimated 60% potential job loss worldwide barring policy interventions
- Job loss probability assessment
- physical labor
- environment – unstructured versus structure
- tasks nature – level of dexterity versus high dexterity
- cognitive labor
- social – high versus low
- cognitive – optimization based versus creativity/strategy based
- physical labor
- AI replacement approach
- single tasks approach
- ground up rethink re-imagination
- A population of irrelevant (no longer employable) as opposed to unemployed
Tackling Key concerns
- Silicon valley – reduce, retrain and redistribute
- Kai Fu Lee – stipends for care, service, education
- Humans freed up from repetitive tasks can now focus on becoming more human oriented
- Disruptor, Zhou
- www.Arvix.org – an online repository of scientific papers
- Folding Beijing – Hao JingFang
Key take aways
- Spread of inequality where some countries have the ability to harness AI while others don’t
- AI based recommendation systems moving from being just an oracle to becoming a sovereign
- AI as a tool is an amplifier
- concerns that it will benefit totalitarianism more than democracy leading to totalitarianism becoming a more favorable governance model worldwide
- psychological manipulation – the inability to know your true self through your thoughts
- what happens if morality and expediency diverge when it comes to governance
- Effectiveness of curbing the negative effects of AI by encoding values within policy frameworks governing these AI based systems
- Companies based in Democratic countries will encode democratic values within their systems vice versa for Totalitarian countries
- Personalization versus Fragmentation
- when everyone in a country chooses his own community that is mainly online there is no longer a glue holding the local community together
- Long term versus short term
- The long term benefits might come sooner than expected when taking a short term trade off
- primary customers: hedge funds
- News article : https://www.businessinsider.com/hedge-fund-data-buyers-at-alternative-data-conference-battlefin-2019-6
- Deloitte report: https://www2.deloitte.com/content/dam/Deloitte/us/Documents/financial-services/us-fsi-dcfs-alternative-data-for-investment-decisions.pdf
- Projected to cross USD7 billion market value by 2020
Robotic Process Automation
- primary customers: companies with legacy systems
- News article: https://techcrunch-com.cdn.ampproject.org/c/s/techcrunch.com/2019/06/24/gartner-finds-rpa-is-fastest-growing-market-in-enterprise-software/amp/
- Gartner report: https://www.gartner.com/en/newsroom/press-releases/2019-06-24-gartner-says-worldwide-robotic-process-automation-sof
- Market valued at USD846.2 million market value right now
Man as an automaton
The average man eats, sleeps, shits and reproduce.
When presented with environment stimulus that signals more of the above, his brain emits dopamine which elicits are warm fuzzy sensation in his body which he interprets as pleasant.
When presented with environment stimulus that signals less of the above, his brain emits adrenaline which elicits muscular tension and heat in various parts of his body which he interprets as unpleasant.
Physics as the upper bound constrain for economic activities
Economic activity is what man as a collective organism engages in as it goes about fulfilling its above stated needs.
A quantum leap in economic activity is only possible when there is significant break through in the field of physics.
A large increase in numeric valuation of such economic activities without corresponding increase in actual physical throughput volume will result in either an inflation or a subsequent correction.
Characterization of economic activities
Aerobic economic activity is when the environment remains at equilibrium during energy extraction for the above stated needs.
Anaerobic economic activity is when the environment equilibrium is disturbed during energy extraction for the above stated needs.
Framing as a high level principle
He who controls the frame determines what goes within it.
The jug shapes the water.
The player controlling the outer edges of the Othello board generally wins the game
The country which controls the currency for all international commerce control the direction and level of cross border commercial activities.
US controls the global USD supply which majority of foreign economic activities and debts are denominated in. US controls the future economic outputs creditors will receive in the future.
Major creditors for US debts like China and Russia are moving towards Gold as the denominator.
A framework Guo Jia used to assess Cao Cao’s strength versus Yuan Shao’s strength during the period of the three kingdom. This is an alternative measure to the modern day GDP measure which has been documented to be in use by the Chinese CCP government.
Advice to Cao Cao
- Yuan Shao is overmuch devoted to ceremony and deportment; while you are sympathetic and natural; this is an excellence in conduct.
- He is antagonistic and drives; you are conciliatory and lead; so you have the advantage of popular approval.
- For many years the government has been lax, and he makes it more so; you strive vigorously after efficiency; this is the excellence of able administration.
- He is outwardly liberal but grudging at heart, and too given to nepotism; you appear exacting, but you understand and use people after their ability; this is the advantage of correct appreciation.
- He is a visionary but lacking in decision; you are a man of prompt decision and direct action; this is an advantage in policy.
- He loves to gather about him people of renown; you treat people as you find them regardless of their reputation; this is where you excel in moral virtue.
- He is compassionate to those at hand, but careless about those out of sight; your care is all-embracing; this is where you excel in humanity.
- He lends a ready ear to calumny and is misled; you may be flooded with evil counsel, but you preserve independence; this is where you excel in perspicacity.
- His sense of right and wrong is confused; your appreciation is accurate and clear; this is where you excel in administrative capacity.
- He loves the make-believe force, but is ignorant of military essentials; you would overcome with far inferior numbers as you possess military genius; this is where you excel in war.
- The hundred year marathon, Michael Pillsbury
- Book of Wei
Personal mous operandi
- When you draw a line in the sand if someone else crosses the line enforce repercussions
- When laws are not enforced them, they don’t exist
- Plays cards close to vest to keep opponents second guessing
- Values loyalty highly
- find the best people to get the job done and then watch over them
- The side that needs the deal most should walk away with the least
On foreign military
- Long term rivals: China and Russia
- Build up strength of US military as a form of deterrence to avoid necessity for deployment
- Only intervene when US economic interest is served as opposed to a purely ideology driven approach
- Countries that benefitted from US military aid should pay for service
- South Korea
- Saudi Arabi
- On the middle east
- Iran should not be trusted
- their nuclear research program
- their motivation to take over the entire Middle East
- their motivation to wipe out Israel
- See Israel as an ally. Sees the need to ensure balance of power amongst players within the middle east
- The removal of Iraq has a net destabilizing effect on the region
- Iran should not be trusted
- Keep oil prices in check
- to keep ISIS oil revenue from Iraq and Syria in check
- To insulate the US economy from OPEC’s price setting ability
- To become the largest oil producer in the world so as to overtake Saudi Arabia and Russia so as to keep their economic influence in check
On foreign trade
- Believe in escalating use of sanctions to force other countries to table for negotiations
- US Trade deficit is concerning
- On China
- Have deep respect for the Chinese who are great businessmen
- largest holder of American debt
- Chinese stock markets have too much influence on US stock markets
- 2015 Chinese stock markets collapse caused US Dow Jones to plummet 1,000 points
- Sees China as more dependent on US than US is on China. To utilize this as a leverage
- Discourage other countries from devaluing their currencies against the USD
- Rectify faulty trade arrangements
- Saudi Arabia
- Willing to utilize economic strength (American consumer) to reward countries that cooperate and punish those that don’t
On the economy
- Believes in a progressive individual taxation system to provide more liquidity for the lower to middle class
- Encourage companies to bring jobs and manufacturing back to the US
- Streamline and lower corporate taxation to encourage companies to bring foreign reserves back to the US
- Reduce corporate taxation to encourage growth of local companies and manufacturing
- To reduce over-regulations to increase growth rate of corporate activities
- Build up of military encourages GDP growth
- Build up of infrastructure encourages GDP growth and facilitates commerce
- On Oil
- To build up the US Shale oil industry
- Create more jobs domestically
- break up virtual state monopolies by insurance companies
- allow competition to make insurance companies compete for their customers
- decentralize control of the educational system to the districts to enforce standards
- mistrust teacher unions’ ability to make sure only the best teachers get the job
On domestic operators
- On reporters
- mistrust political reporters as they generally misrepresent and bias towards sensationalization
- trust financial reporters because dollars and cents are at stake
- build relationship with them to generate free publicity for his ideas
- Views interest of politicians as mis-aligned to interest of people
- Wants to retain the best foreign talents within the country and make it easy for them to contribute
- To stem out illegal immigration so as to keep out unqualified immigrants
- To remove the USD1billion/yr cost of keeping foreign criminals in US prison
- Stop the tide of refugee immigrants to reduce the cost and repercussions of supporting them
On guns rights
- 2nd Amendment, gun rights needs to stay intact so that citizens can keep the state in check and have a way of protecting their family
- People with mental health should not be allowed to own guns
- Over regulation is ineffective, criminals do not get their guns via normal routes
- Believes in the freedom of religion
- Believes Christian ideals is the philosophical foundation of the US
Grepsr is increasingly being used in the work place by Quid.
Business people that don’t know how to code use Grepsr to pull data.
There is increasing demand for DIFFs to identify thematic trends. Themes are extracted from articles through the use of NLTK.
The proliferation of machine learning libraries and the maturing of the semantic web is democratizing the access to insights.
The legalization of online sports betting has open a fertile ground for this trend towards democratization.
NBA basketball predictive modeling should be done at the players level instead of the team level as the data becomes too lossy.
The odds of sports books at the opening lines is to encourage even bets on both side. The odds of the closing lines is a weighted average of bets (signals) from the crowd.
Management: make people capable of working together to respond to change in the environment through:
- common goals
- common values
- the right structure
- proper training and development
Reasons for failure
- Not innovating
- inability to manage innovation
The goal of any business is to create a customer. A business does so by producing generate products and services the community wants in exchange for profits to sustain continued operation.
The goal of marketing is to know understand and know the customer so well the product sells itself
The Purpose of a business is the change it wants to effect in the community
The Mission is what it wants to do to effect the change
The Objectives are key tasks it will execute upon to achieve the mission.
Types of innovation
- Product innovation
- Social innovation
- Management innovation
Waste as little effort as possible on areas of low competence.
First figure out how you learn to figure out how you perform.
Number two person often fails in number one position because top spot requires a decision maker.
Effective people are perpetually working on time management.
The first rule of decision is one does not make a decision unless there is a disagreement.
Determine the right organization size to fit the requirements of the mission.
Conversations with Yi (EverString)
The forthcoming trend for engineering
Machine learning is increasingly becoming commoditized. DevOps becomes more important. Demand for specialized service where DevOps is encapsulated will further increase as demand for engineering tasks further outstrips engineering supplies.
On lead generation market
Companies in the lead generation space have need for scalable web crawlers. This helps offset the cost of retaining three in-house engineers.
Lead generation space has consolidated. There were priorly 120k such companies. There is 7k companies in operation. Majority of players are generating leads by scraping LinkedIn.
Consumer space require constant development of new features. Enterprise space requires service heavy. Enterprise space requires not just lead generation but entire channel marketing service suit (physical mail, online advertising, email marketing)
Lead gen hard to retain. The list becomes less valuable once it’s been used. 80% yearly churn is normal. One company reduces yearly churn to just 10% this by reducing second year subscription from USD800/yr to USD200/yr. further discount to USD100/yr if they don’t like. Recurring service is for grabbing fresh leads from same data source.
On Tele conference
Zoom’s product team compared with UberConference has developed a better understanding of the true conference needs of their users in various context. They have worked harder to ensure their product work seamlessly in identified scenarios. A typical example is the ability to join s conference bybthe press of a button on their mobile phone while driving instead of having to type the typical 4 pin digits.