Why it’s so hard to build the next Silicon Valley

[Note: This item comes from friend Mike Cheponis. DLH]

Why it’s so hard to build the next Silicon Valley
Google brought its high-speed Internet to Kansas City, but it didn’t turn the city into a tech paradise
By Sarah McBride
Feb 28 2017
http://www.livemint.com/Companies/1qu8M1Y59ZtatZGLFqA8HP/Why-its-so-hard-to-build-the-next-Silicon-Valley.html

San Francisco: When Brandon Schatz learned in December 2012 that Kansas City, Kansas had become the first city in the nation to get Google Fiber, a superfast Internet service, he started making plans to move his nascent sports photography business there. The day after Christmas, he drove the 165 miles from his home in Springfield, Missouri, to check it out. By 1 February, he had settled into his new house. By 4 February, he was connected to the network.

That was exactly what officials had wanted. When the area (first Kansas City, Kansas, with Kansas City, Missouri added weeks later) won a challenge to be the first to get Google Fiber, local boosters celebrated, hoping to kick-start an economic renaissance: attracting entrepreneurs, cultivating emerging business districts, and becoming known as a major start-up hub.

Four years later, Schatz’s company Sportsphotos.com, which takes photos of amateur sporting events around the country, is growing slowly. He’s taking full advantage of the speedy Internet, uploading hundreds of high-resolution photos in minutes from races and other matches. But the business isn’t yet where he wants it to be, and for now Schatz’s main source of income is web development work and renting out rooms in his home on Airbnb. On a recent Sunday, Schatz sat in his home, where he also operates his company, pecking away at a desktop, surrounded by pizza boxes. “I thought we would be huge already,” he said.

Schatz’s disappointment is a tale of misplaced expectations, by both entrepreneurs and city leaders. (The challenges that he and other start-up founders face is the subject of the latest episode of the Decrypted podcast; subscribe here on iTunes.) In 2011 the cities’ two mayors called Fiber’s then-future deployment “a once-in-a-lifetime opportunity,” and a way to “spark economic development.” And for Google, which since significantly has pared down support for the project, it was a case of placing too much faith in the ability of its own technology to change lives.

“Why is Kansas City really not taking off, especially with this asset like Google Fiber?”- Jeff Pinketron of the Mid America Regional Council

It’s also been hard for the Kansas City area to become the boom town that leaders dreamed of. Some entrepreneurs, like Schatz, were drawn to the city because of the fiber, and some launched businesses. A “start-up village” sprang up. But few of the companies really took off, and some frustrated founders ended up decamping to San Francisco, where there was a larger talent pool and greater access to capital. Even the best of intentions and super-speedy Internet isn’t enough to create a new Silicon Valley.

Every year after Alphabet Inc.’s Google’s first fiber connections lit up in late 2012, greater Kansas City’s GDP growth has fallen well short of the national average. In 2015, it was just 1.5%, compared to 2.6% for the nation as a whole. Metro regional numbers aren’t yet available for all of 2016, although based on state numbers through the third quarter, both Kansas and Missouri seem to be beating the national average.

“We’re scratching our heads a little bit,” said Jeff Pinkerton of the Mid America Regional Council, a non-profit that conducts economic research for greater Kansas City. “Why is Kansas City really not taking off, especially with this asset like Google Fiber?”

Google came to town in 2011. At Wyandotte High School auditorium, on the Kansas side, blue, red, yellow and green spotlights shone on a parade of dignitaries who addressed the audience. Google founder Sergey Brin spoke on a pre-recorded video. After the announcement about fiber going into Kansas City, a Google vice-president invited the crowd to a barbecue-laden celebration.

Kansas City beat out more than 1,000 other cities for the debut Google fiber project, which aimed to compete against the telecommunications and cable giants that have dominated the market for Internet access. Some analysts believed the ultimate goal was to encourage those competitors to improve their own services and thus the Internet experience overall, which would bolster the environment for Alphabet’s most lucrative business: online search.

Mayors of both cities announced a team of civic leaders to figure out how best to leverage fiber, in entrepreneurship as well as other areas such as education. The group released a plan in 2012 that made recommendations ranging from nurturing technology districts to supporting tax credits for small technology businesses to creating mentor networks.

[snip]

The retreat of the global company

[Note: This item comes from reader Randall Head. DLH]

The retreat of the global company
The biggest business idea of the past three decades is in deep trouble
Jan 28 2017
http://www.economist.com/news/briefing/21715653-biggest-business-idea-past-three-decades-deep-trouble-retreat-global

IT WAS as though the world had a new appetite. A Kentucky Fried Chicken (KFC) outlet opened near Tiananmen Square in 1987. In 1990 a McDonald’s sprang up in Pushkin Square, flipping burgers for 30,000 Muscovites on its first day. Later that year Ronald McDonald rolled into Shenzhen, China, too. Between 1990 and 2005 the two companies’ combined foreign sales soared by 400%.

McDonald’s and KFC embodied an idea that would become incredibly powerful: global firms, run by global managers and owned by global shareholders, should sell global products to global customers. For a long time their planet-straddling model was as hot, crisp and moreish as their fries.

Today both companies have gone soggy. Their shares have lagged behind America’s stockmarket over the past half-decade. Yum, which owns KFC, saw its foreign profits peak in 2012; they have fallen by 20% since. Those of McDonald’s are down by 29% since 2013 (see article). Last year Yum threw in the towel in China and spun off its business there. On January 8th McDonald’s sold a majority stake in its Chinese operation to a state-owned firm. There are specific reasons for some of this; but there is also a broader trend. The world is losing its taste for global businesses.

Their detractors and their champions both think of multinational firms—for the purposes of this article, firms that make over 30% of their sales outside their home region (unless otherwise specified)—as the apex predators of the global economy. They shape the ecosystems in which others seek their living. They direct the flows of goods, services and capital that brought globalisation to life. Though multinationals account for only 2% of the world’s jobs, they own or orchestrate the supply chains that account for over 50% of world trade; they make up 40% of the value of the West’s stockmarkets; and they own most of the world’s intellectual property.

Although the idea of being at the top of the food chain makes these companies sound ruthless and all-conquering, rickety and overextended are often more fitting adjectives. And like jackals circling an elderly pride, politicians want to grab more of the spoils that multinational firms have come to control, including 80m jobs on their payrolls and their profits of about $1trn. As multinational firms come to make ever more of their money from technology services they become yet more vulnerable to a backlash. The predators are increasingly coming to look like prey.

It all looked very different 25 years ago. With the Soviet Union collapsing and China opening up, a sense of destiny gripped Western firms; the “end of history” announced by Francis Fukuyama, a scholar, in which all countries would converge towards democracy and capitalism seemed both a historical turning-point and a huge opportunity. There were already many multinationals, some long established. Shell, Coca-Cola and Unilever had histories spanning the 20th century. But they had been run, for the most part, as loose federations of national businesses. The new multinationals sought to be truly global.

[snip]

Warning of mass extinction of species, including humans, within one decade

Warning of mass extinction of species, including humans, within one decade
Feb 8 2017
http://arctic-news.blogspot.com.es/2017/02/warning-of-mass-extinction-of-species-including-humans-within-one-decade.html

On February 10, 2017, 18:00 UTC it is forecast to be 0.1°C or 32.1°F at the North Pole, i.e. above the temperature at which water freezes. The temperature at the North Pole is forecast to be 30°C or 54°F warmer than 1979-2000, on Feb 10, 2017, 18:00 UTC, as shown on the Climate Reanalyzer image on the right.

This high temperature is expected as a result of strong winds blowing warm air from the North Atlantic into the Arctic.

The forecast below, run on February 4, 2017, shows that winds as fast as 157 km/h or 98 mph were expected to hit the North Atlantic on February 6, 2017, 06:00 UTC, producing waves as high as 16.34 m or 53.6 ft.

A later forecast shows waves as high as 17.18 m or 54.6 ft, as illustrated by the image below.

While the actual wave height and wind speed may not turn out to be as extreme as such forecasts, the images do illustrate the horrific amounts of energy contained in these storms.

Stronger storms go hand in hand with warmer oceans. The image below shows that on February 4, 2017, at a spot off the coast of Japan marked by green circle, the ocean was 19.1°C or 34.4°F warmer than 1981-2011.

As discussed in an earlier post, the decreasing difference in temperature between the Equator and the North Pole causes changes to the jet stream, in turn causing warmer air and warmer water to get pushed from the North Atlantic into the Arctic.

The image below shows that on February 9, 2017, the water at a spot near Svalbard (marked by the green circle) was 13°C or 55.3°F, i.e. 12.1°C or 21.7°F warmer than 1981-2011.

Warmer water flowing into the Arctic Ocean in turn increases the strength of feedbacks that are accelerating warming in the Arctic. One of these feedbacks is methane that is getting released from the seafloor of the Arctic Ocean. Update: The image below shows that methane levels on February 13, 2017, pm, were as high as 2727 ppb, 1½ times the global mean at the time.

Warmer water flowing into the Arctic Ocean in turn increases the strength of feedbacks that are accelerating warming in the Arctic. One of these feedbacks is methane that is getting released from the seafloor of the Arctic Ocean. Update: The image below shows that methane levels on February 13, 2017, pm, were as high as 2727 ppb, 1½ times the global mean at the time.

[snip]

Biologists say half of all species could be extinct by end of century

Biologists say half of all species could be extinct by end of century
Scientists at Vatican conference are searching for a solution to the manmade ‘major extinction event’
By Robin McKie
Feb 25 2017
https://www.theguardian.com/environment/2017/feb/25/half-all-species-extinct-end-century-vatican-conference

One in five species on Earth now faces extinction, and that will rise to 50% by the end of the century unless urgent action is taken. That is the stark view of the world’s leading biologists, ecologists and economists who will gather on Monday to determine the social and economic changes needed to save the planet’s biosphere.

“The living fabric of the world is slipping through our fingers without our showing much sign of caring,” say the organisers of the Biological Extinction conference held at the Vatican this week.

Threatened creatures such as the tiger or rhino may make occasional headlines, but little attention is paid to the eradication of most other life forms, they argue. But as the conference will hear, these animals and plants provide us with our food and medicine. They purify our water and air while also absorbing carbon emissions from our cars and factories, regenerating soil, and providing us with aesthetic inspiration.

“Rich western countries are now siphoning up the planet’s resources and destroying its ecosystems at an unprecedented rate,” said biologist Paul Ehrlich, of Stanford University in California. “We want to build highways across the Serengeti to get more rare earth minerals for our cellphones. We grab all the fish from the sea, wreck the coral reefs and put carbon dioxide into the atmosphere. We have triggered a major extinction event. The question is: how do we stop it?”

Monday’s meeting is one of a series set up by the Vatican on ecological issues – which Pope Francis has deemed an urgent issue for the Catholic church. “We need to unravel the processes that led to the ills we are now facing,” said one of the conference’s organisers, the economist Sir Partha Dasgupta, of Cambridge University. “That is why the Vatican symposia involve natural and social scientists, as well as scholars from the humanities. That the symposia are being held at the Papal Academy is also symbolic. It shows that the ancient hostility between science and the church, at least on the issue of preserving Earth’s services, has been quelled.”

But not everyone is happy about the meeting. The involvement of Ehrlich – who believes that wider use of birth control is needed to halt the world’s spiralling population – has been denounced by many conservative Catholics. They have set up a petition calling for the pope to withdraw the invitation for him to speak on Monday. “I believe they have about 11,000 signatures,” Ehrlich told the Observer. “The pope has not changed his mind, however.”

He remained uncompromising on population control: “If you value people, you want to have the maximum number you can support sustainably. You do not want almost 12 billion living unsustainably on Earth by the end of the century – with the result that civilisation will collapse and there are only a few hundred survivors.”

[snip]

Spacex to Send Privately Crewed Dragon Spacecraft Beyond the Moon Next Year

Spacex to Send Privately Crewed Dragon Spacecraft Beyond the Moon Next Year
Feb 27 2017
http://www.spacex.com/news/2017/02/27/spacex-send-privately-crewed-dragon-spacecraft-beyond-moon-next-year

We are excited to announce that SpaceX has been approached to fly two private citizens on a trip around the moon late next year. They have already paid a significant deposit to do a moon mission. Like the Apollo astronauts before them, these individuals will travel into space carrying the hopes and dreams of all humankind, driven by the universal human spirit of exploration. We expect to conduct health and fitness tests, as well as begin initial training later this year. Other flight teams have also expressed strong interest and we expect more to follow. Additional information will be released about the flight teams, contingent upon their approval and confirmation of the health and fitness test results.

Most importantly, we would like to thank NASA, without whom this would not be possible. NASA’s Commercial Crew Program, which provided most of the funding for Dragon 2 development, is a key enabler for this mission. In addition, this will make use of the Falcon Heavy rocket, which was developed with internal SpaceX funding. Falcon Heavy is due to launch its first test flight this summer and, once successful, will be the most powerful vehicle to reach orbit after the Saturn V moon rocket. At 5 million pounds of liftoff thrust, Falcon Heavy is two-thirds the thrust of Saturn V and more than double the thrust of the next largest launch vehicle currently flying.

Later this year, as part of NASA’s Commercial Crew Program, we will launch our Crew Dragon (Dragon Version 2) spacecraft to the International Space Station. This first demonstration mission will be in automatic mode, without people on board. A subsequent mission with crew is expected to fly in the second quarter of 2018. SpaceX is currently contracted to perform an average of four Dragon 2 missions to the ISS per year, three carrying cargo and one carrying crew. By also flying privately crewed missions, which NASA has encouraged, long-term costs to the government decline and more flight reliability history is gained, benefiting both government and private missions.

Once operational Crew Dragon missions are underway for NASA, SpaceX will launch the private mission on a journey to circumnavigate the moon and return to Earth. Lift-off will be from Kennedy Space Center’s historic Pad 39A near Cape Canaveral – the same launch pad used by the Apollo program for its lunar missions. This presents an opportunity for humans to return to deep space for the first time in 45 years and they will travel faster and further into the Solar System than any before them.

[snip]

Those jobs are gone forever. Let’s gear up for what’s next.

[Note: This item comes from friend Judi Clark. DLH]

Those jobs are gone forever. Let’s gear up for what’s next.
By Quincy Larson
Feb 6 2017
<https://medium.freecodecamp.com/we-cant-bring-back-the-old-manufacturing-jobs-12214a0ab057&gt;

“Generals always fight the last war.” — an old World War II saying
Manufacturing jobs were a huge part of America’s post-World War II economic miracle.

In the early 1980’s, 20 million Americans worked in factories, assembling consumer products like cars and appliances.

Well, what happened after that?

There are two narratives here. The shorter story arc is about globalization. American corporations moved all the old manufacturing jobs off-shore to relatively poor countries that still had OK education systems (like China).

This is the story that most people think of when they realize that, as of 2017, your average high school graduate can no longer own a home and raise a family on a single income.

But there’s a second narrative — one that arcs back centuries, to 1794 when Eli Whitney patented the cotton gin. This story’s plot is more complicated, and has quite a few twists that have yet to unfold. It goes something like this: technology keeps making individual workers much, much more productive than they ever were before.

And when one worker — with the help of a robot army — can do what used to require 100 workers… well, you don’t need 100 workers anymore. You just need one.

So here’s the real story of American manufacturing over the past 70 years, told in a single chart:

[snip]

Google, democracy and the truth about internet search

[Note: This item comes from friend Linda Stone. This article is from December, 2016. DLH]

Google, democracy and the truth about internet search
Tech-savvy rightwingers have been able to ‘game’ the algorithms of internet giants and create a new reality where Hitler is a good guy, Jews are evil and… Donald Trump becomes president
By Carole Cadwalladr
Dec 4 2016
https://www.theguardian.com/technology/2016/dec/04/google-democracy-truth-internet-search-facebook

Here’s what you don’t want to do late on a Sunday night. You do not want to type seven letters into Google. That’s all I did. I typed: “a-r-e”. And then “j-e-w-s”. Since 2008, Google has attempted to predict what question you might be asking and offers you a choice. And this is what it did. It offered me a choice of potential questions it thought I might want to ask: “are jews a race?”, “are jews white?”, “are jews christians?”, and finally, “are jews evil?”

Are Jews evil? It’s not a question I’ve ever thought of asking. I hadn’t gone looking for it. But there it was. I press enter. A page of results appears. This was Google’s question. And this was Google’s answer: Jews are evil. Because there, on my screen, was the proof: an entire page of results, nine out of 10 of which “confirm” this. The top result, from a site called Listovative, has the headline: “Top 10 Major Reasons Why People Hate Jews.” I click on it: “Jews today have taken over marketing, militia, medicinal, technological, media, industrial, cinema challenges etc and continue to face the worlds [sic] envy through unexplained success stories given their inglorious past and vermin like repression all over Europe.”

Google is search. It’s the verb, to Google. It’s what we all do, all the time, whenever we want to know anything. We Google it. The site handles at least 63,000 searches a second, 5.5bn a day. Its mission as a company, the one-line overview that has informed the company since its foundation and is still the banner headline on its corporate website today, is to “organise the world’s information and make it universally accessible and useful”. It strives to give you the best, most relevant results. And in this instance the third-best, most relevant result to the search query “are Jews… ” is a link to an article from stormfront.org, a neo-Nazi website. The fifth is a YouTube video: “Why the Jews are Evil. Why we are against them.”

The sixth is from Yahoo Answers: “Why are Jews so evil?” The seventh result is: “Jews are demonic souls from a different world.” And the 10th is from jesus-is-saviour.com: “Judaism is Satanic!”

There’s one result in the 10 that offers a different point of view. It’s a link to a rather dense, scholarly book review from thetabletmag.com, a Jewish magazine, with the unfortunately misleading headline: “Why Literally Everybody In the World Hates Jews.”

I feel like I’ve fallen down a wormhole, entered some parallel universe where black is white, and good is bad. Though later, I think that perhaps what I’ve actually done is scraped the topsoil off the surface of 2016 and found one of the underground springs that has been quietly nurturing it. It’s been there all the time, of course. Just a few keystrokes away… on our laptops, our tablets, our phones. This isn’t a secret Nazi cell lurking in the shadows. It’s hiding in plain sight.

[snip]

Deported With A Valid U.S. Visa, Jordanian Says Message Is ‘You’re Not Welcome’

Deported With A Valid U.S. Visa, Jordanian Says Message Is ‘You’re Not Welcome’
By JANE ARRAF
Feb 24 2017
http://www.npr.org/sections/parallels/2017/02/24/517023337/deported-with-a-valid-u-s-visa-jordanian-says-message-is-youre-not-welcome

Yahya Abu Romman, a 22-year-old languages major, had just graduated from university. To celebrate, he planned a six-week trip to the U.S., where his brother, uncles and aunts and more than a dozen cousins have lived for years.

With good grades, an engaging personality and fluency in three languages — English, Arabic and Spanish — he had worked as a nature conservation ranger while studying, and had his pick of jobs with tour companies in Jordan, a strong U.S. ally.

In 2015, Abu Romman was issued a tourist visa at the U.S. embassy in Amman, good for five years. With money from a graduation present, he bought a round-trip ticket and landed at Chicago’s O’Hare International Airport a few days after the start of President Trump’s travel ban on the citizens of seven predominantly Muslim countries.

That’s where the positive impression of the U.S. he’d inherited from his father came to a screeching halt.

“My dad is a graduate from the University of Illinois,” says Abu Romman. “He always told me America is the land of justice, land of opportunities, of generosity. That there are very kind people. And there are. But I think things have changed.”

Abu Romman is a Jordanian citizen, but born in Syria. He’s been to Syria only once since birth — and being born in an Arab country doesn’t automatically confer citizenship there. Instead, citizenship is generally based your father’s nationality. Still, Abu Romman couldn’t persuade the border officer at O’Hare that he wasn’t Syrian.

“He said, ‘Sir, if you were born in Syria, you should have a Syrian passport,’ ” says Abu Romman at his family’s home off a winding street in the Jordanian capital. “I said, ‘Why should I have a Syrian passport? My father is Jordanian. My mother is Jordanian. We all are Jordanian, but it happened to be in Syria where I was born.’ He knocked on the glass next to him, to his colleague. He said, ‘We might have a problem with this.”

The questions moved on to the case of Abu Romman’s brother, who had lived illegally in the U.S. and overstayed a visa before becoming a citizen. Then border guards went through Abu Romman’s phone and found emails he’d sent to flight schools in the U.S. and other countries.

Abu Romman says his dream was to learn to fly, and he was simply asking about scholarships. But the officer wasn’t convinced that he wasn’t planning to stay in the U.S.

“He said, ‘Sir, we’re going to be cancelling your visa,'” says Abu Romman.

He shows me his U.S. visa with the words “Revoked – cancelled by CBP” – Customs and Border Protection — written across it with a red marker.

[snip]

No publication without confirmation

No publication without confirmation
Proposing a new kind of paper that combines the flexibility of basic research with the rigour of clinical trials.
By Jeffrey S. Mogil & Malcolm R. Macleod
Feb 22 2017
http://www.nature.com/news/no-publication-without-confirmation-1.21509

Concern over the reliability of published biomedical results grows unabated. Frustration with this ‘reproducibility crisis’ is felt by everyone pursuing new disease treatments: from clinicians and would-be drug developers who want solid foundations for the preclinical research they build on, to basic scientists who are forced to devote more time and resources to newly imposed requirements for rigour, reporting and statistics. Tightening rigour across all experiments will decrease the number of false positive findings, but comes with the risk of reducing experimental efficiency and creativity.

Bolder ideas are needed. What we propose here is a compromise between the need to trust conclusions in published papers and the freedom for basic scientists to explore and innovate. Our proposal is a new type of paper for animal studies of disease therapies or preventions: one that incorporates an independent, statistically rigorous confirmation of a researcher’s central hypothesis. We call this large confirmatory study a preclinical trial. These would be more formal and rigorous than the typical preclinical testing conducted in academic labs, and would adopt many practices of a clinical trial.

We believe that this requirement would push researchers to be more sceptical of their own work. Instead of striving to convince reviewers and editors to publish a paper in prestigious outlets, they would be questioning whether their hypotheses could stand up in a large, confirmatory animal study. Such a trial would allow much more flexibility in earlier hypothesis-generating experiments, which would be published in the same paper as the confirmatory study. If the idea catches on, there will be fewer high-profile papers hailing new therapeutic strategies, but much more confidence in their conclusions.

The confirmatory study would have three features. First, it would adhere to the highest levels of rigour in design (such as blinding and randomization), analysis and reporting. Second, it would be held to a higher threshold of statistical significance, such as using P values of P < 0.01 instead of the currently standard P < 0.05. Third, it would be performed by an independent laboratory or consortium. This exceeds the requirements currently proposed by various checklists and funders, but would apply only to the final, crucial confirmatory experiment.

Unlike clinical studies, most preclinical research papers describe a long chain of experiments, all incrementally building support for the same hypothesis. Such papers often include more than a dozen separate in vitro and animal experiments, with each one required to reach statistical significance. We argue that, as long as there is a final, impeccable study that confirms the hypothesis, the earlier experiments in this chain do not need to be held to the same rigid statistical standard.

This would represent a big shift in how scientists produce papers, but we think that the integrity of biomedical research could benefit from such radical thinking.

[snip]

The rise of artificial intelligence is creating new variety in the chip market, and trouble for Intel

The rise of artificial intelligence is creating new variety in the chip market, and trouble for Intel
The success of Nvidia and its new computing chip signals rapid change in IT architecture
Feb 25 2017
http://www.economist.com/news/business/21717430-success-nvidia-and-its-new-computing-chip-signals-rapid-change-it-architecture

“WE ALMOST went out of business several times.” Usually founders don’t talk about their company’s near-death experiences. But Jen-Hsun Huang, the boss of Nvidia, has no reason to be coy. His firm, which develops microprocessors and related software, is on a winning streak. In the past quarter its revenues increased by 55%, reaching $2.2bn, and in the past 12 months its share price has almost quadrupled.

A big part of Nvidia’s success is because demand is growing quickly for its chips, called graphics processing units (GPUs), which turn personal computers into fast gaming devices. But the GPUs also have new destinations: notably data centres where artificial-intelligence (AI) programmes gobble up the vast quantities of computing power that they generate.

Soaring sales of these chips (see chart) are the clearest sign yet of a secular shift in information technology. The architecture of computing is fragmenting because of the slowing of Moore’s law, which until recently guaranteed that the power of computing would double roughly every two years, and because of the rapid rise of cloud computing and AI. The implications for the semiconductor industry and for Intel, its dominant company, are profound.

Things were straightforward when Moore’s law, named after Gordon Moore, a founder of Intel, was still in full swing. Whether in PCs or in servers (souped-up computers in data centres), one kind of microprocessor, known as a “central processing unit” (CPU), could deal with most “workloads”, as classes of computing tasks are called. Because Intel made the most powerful CPUs, it came to rule not only the market for PC processors (it has a market share of about 80%) but the one for servers, where it has an almost complete monopoly. In 2016 it had revenues of nearly $60bn.

This unipolar world is starting to crumble. Processors are no longer improving quickly enough to be able to handle, for instance, machine learning and other AI applications, which require huge amounts of data and hence consume more number-crunching power than entire data centres did just a few years ago. Intel’s customers, such as Google and Microsoft together with other operators of big data centres, are opting for more and more specialised processors from other companies and are designing their own to boot.

Nvidia’s GPUs are one example. They were created to carry out the massive, complex computations required by interactive video games. GPUs have hundreds of specialised “cores” (the “brains” of a processor), all working in parallel, whereas CPUs have only a few powerful ones that tackle computing tasks sequentially. Nvidia’s latest processors boast 3,584 cores; Intel’s server CPUs have a maximum of 28.

The company’s lucky break came in the midst of one of its near-death experiences during the 2008-09 global financial crisis. It discovered that hedge funds and research institutes were using its chips for new purposes, such as calculating complex investment and climate models. It developed a coding language, called CUDA, that helps its customers program its processors for different tasks. When cloud computing, big data and AI gathered momentum a few years ago, Nvidia’s chips were just what was needed.

Every online giant uses Nvidia GPUs to give their AI services the capability to ingest reams of data from material ranging from medical images to human speech. The firm’s revenues from selling chips to data-centre operators trebled in the past financial year, to $296m.

And GPUs are only one sort of “accelerator”, as such specialised processors are known. The range is expanding as cloud-computing firms mix and match chips to make their operations more efficient and stay ahead of the competition. “Finding the right tool for the right job”, is how Urs Hölzle, in charge of technical infrastructure at Google, describes balancing the factors of flexibility, speed and cost.

[snip]