Start Up No.1,097: Apple’s self-driving (again), RIP chatbot news, sizing Hong Kong’s protests, Facebook and Libra, and more


Quantum computing may be about to take off at a dramatic rate. Who benefits? CC-licensed photo by Kevin Dooley on Flickr.

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A selection of 12 links for you. Not a model. I’m @charlesarthur on Twitter. Observations and links welcome.

Drive.ai, a self-driving car startup once worth $200 million, is closing • SFChronicle.com

Sophia Kunthara and Melia Russell:

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Mountain View startup Drive.ai, which made kits to turn regular cars into autonomous ones, will shut its office in June and lay off 90 workers in a permanent closure of its business, according to a filing with a state agency.

At the same time, Apple has hired a handful of hardware and software engineers from Drive.ai, in what appears to be part of a renewed effort by the iPhone and Mac maker to branch out into self-driving cars.

Three weeks ago, Apple was said to be exploring a purchase of Drive.ai, a deal that would let Apple pick up dozens of Drive.ai engineers while eliminating a competitor from the market.

So far, five former Drive.ai employees have changed their LinkedIn profiles to say they left Drive.ai in June and joined Apple the same month. Four of those workers list “special projects” in their job titles. Those employees include data, systems and software engineers.

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Apple doesn’t seem to quite want to let go of this idea. Can’t be a sunk cost thing; they know when to stop throwing good money after bad. Either their ambitions are much bigger than we suspect, or much smaller than we infer.
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R.I.P. Quartz Brief, the innovative mobile news app. Maybe “chatting with the news” isn’t something most people really want to do? • Nieman Journalism Lab

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When the Quartz app debuted in 2016, it was immediately clear that it would be a big step away from the news app mainstream. No list of headlines here; a first-time user saw what looked like a chat interface, familiar from whatever app they use to trade barbs with friends, and a sort of textual uncanny valley: Am I talking with a bot? A person? A news organization?

The answer was a combination of all three. In real time, the app’s prose was being sent by software; there wasn’t some thumb-sore intern responding to each and every user 24/7. But those words were written by real Quartz staffers, one tasked with condensing an interesting story into a script of back-and-forth responses that encouraged engagement with the story and felt human. And in a sense, you really were chatting with the news organization itself; as Quartz’s Zach Seward put it before the app even launched, “Quartz is an API”.

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Is it a surprise that people don’t want to have to work any harder than absolutely necessary to read the news? Mistaking novelty for utility is a common problem in product design.
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Does Neven’s Law describe quantum computing’s rise? • Quanta Magazine

Kevin Hartnett:

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In December 2018, scientists at Google AI ran a calculation on Google’s best quantum processor. They were able to reproduce the computation using a regular laptop. Then in January, they ran the same test on an improved version of the quantum chip. This time they had to use a powerful desktop computer to simulate the result. By February, there were no longer any classical computers in the building that could simulate their quantum counterparts. The researchers had to request time on Google’s enormous server network to do that.

“Somewhere in February I had to make calls to say, ‘Hey, we need more quota,’” said Hartmut Neven, the director of the Quantum Artificial Intelligence lab. “We were running jobs comprised of a million processors.”

That rapid improvement has led to what’s being called “Neven’s law,” a new kind of rule to describe how quickly quantum computers are gaining on classical ones. The rule began as an in-house observation before Neven mentioned it in May at the Google Quantum Spring Symposium. There, he said that quantum computers are gaining computational power relative to classical ones at a “doubly exponential” rate — a staggeringly fast clip.

With double exponential growth, “it looks like nothing is happening, nothing is happening, and then whoops, suddenly you’re in a different world,” Neven said. “That’s what we’re experiencing here.”

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Double exponential (the exponent of the exponent) is shockingly fast. Though the problem with quantum computers is that until (unless) you can find room-temperature superconductors, they’re going to be highly specialised kit, available only to a select few. Which poses its own kind of problem: who gets access?
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Hong Kong protests: measuring the masses • Reuters

Simon Scarr, Manas Sharma, Marco Hernandez and Vimvam Tong:

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Robert Chung, director of the program, said headcounts were getting hopelessly politicised. “Headcount calling has become less and less scientific,” Chung said. “One side bluffs more and more, the other side compresses harder and harder, both have gone beyond reality.”

Professor Yip, who also worked on crowd estimates for the June 16 rally, said: “I think the gap between the organisers and police becoming wider is a reflection of how much distrust is in the community. The wider the gap, the wider distrust.”

HKUPOP typically measures flow over the duration of a march, no matter how long, with estimates adjusted based on sample interviews with protesters about where they joined the march and when. The program did not deploy a team to measure crowd size on June 9 or June 16. But Yip said that based on what he saw of the march, he estimated the latest rally to have drawn 500,000 to 800,000 people.

It seems unlikely police and protesters in Hong Kong will reach a consensus about the size of crowds during marches and other rallies. And the science behind crowd counting will continue to evolve as researchers find more accurate ways to measure how many people take to the streets. But Yip said both sides may be missing the point by arguing over numbers.

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Long, scientific and detailed; but also pointing out that scientific might be the least useful way to think about it, because it’s political. (Via Sophie Warnes’s Fair Warning newsletter.)
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Global telecom carriers attacked by suspected Chinese hackers • WSJ

Timothy W. Martin and Eva Dou:

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Hackers believed to be backed by China’s government have infiltrated the cellular networks of at least 10 global carriers, swiping users’ whereabouts, text-messaging records and call logs, according to a new report, amid growing scrutiny of Beijing’s cyberoffensives.

The multiyear campaign, which is continuing, targeted 20 military officials, dissidents, spies and law enforcement—all believed to be tied to China—and spanned Asia, Europe, Africa and the Middle East, says Cybereason Inc., a Boston-based cybersecurity firm that first identified the attacks. The tracked activity in the report occurred in 2018.

The cyberoffensive casts a spotlight on a Chinese group called APT 10; two of its alleged members were indicted by the US Department of Justice in December for broad-ranging hacks against Western businesses and government agencies. Cybereason said the digital fingerprints left in the telecom hacks pointed to APT 10 or a threat actor sharing its methods.

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Scary, right? However:

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The Wall Street Journal was unable to independently confirm the report. Cybereason, which is run by former Israeli counterintelligence members, declined to name the individuals or the telecom firms targeted, citing privacy concerns.

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Nobody has been able to independently verify this claim. There are lots of security companies making these claims. It’s increasingly difficult to figure out who’s telling the truth, who’s exaggerating but truthful, and who’s spinning some big ones. Don’t forget that people once believed what Theranos told them too.
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Juul ban in San Francisco is passed, outlawing e-cigarette sales • Bloomberg

Ellen Huet:

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The city voted Tuesday to ban sales of e-cigarettes, making it illegal to sell nicotine vaporizer products in stores or for online retailers to ship the goods to San Francisco addresses. The ban will be the first of its kind to go into effect in the US.

The ordinance will now go to the mayor to sign into law. Cigarettes and other tobacco products will remain legal in the city, along with recreational marijuana.

As cigarette use in the US declines, tobacco companies have looked to other areas for revenue growth. Altria Group, which sells Marlboro cigarettes in the US, bought a 35% stake in Juul Labs Inc. last year, valuing the startup at $38bn. Juul told investors last month that revenue rose to $528m in the first quarter, as international sales took off. This week, an Indonesian retail chain that sells iPhones said it expected to begin carrying Juul products, sending its stock surging.

The legislation in San Francisco is aimed at all e-cigarette companies, but it has to feel personal for Juul. The San Francisco-based startup is the biggest target for vaping critics, who say it’s hooking kids on nicotine and creating a new generation of addicts.

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I can’t follow how you’d allow the sale of cigarettes and marijuana, but ban the sale of e-cigarettes (which release vapourised nicotine). Yes, they’re worse than not smoking, but they’re a lot safer than cigarettes; the principal risks are mouth and throat cancers (and nicotine addiction, of course), but not the lung cancer and others that cigarette smoking offers.
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Trump signs Executive Order compelling disclosure of prices in health care • WSJ

Stephanie Armour and Anna Wilde Mathews:

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President Trump on Monday pushed for greater price disclosure in health care, signing an executive order that could make thousands of hospitals expose more pricing information and require doctors, health clinics and others to tell patients about out-of-pocket costs upfront.

While President Trump has pledged repeatedly to take on health costs, the signing of the executive order unleashes coordinated efforts from multiple agencies to pursue the goal. It calls for the Department of Health and Human Services to issue a rule within two months that could require hospitals to publicize information on their negotiated rates with insurers for common procedures.

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Blimey. I guess this proves the stopped-clock theory. Trump admin does a good thing which will benefit people.
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Facebook, Libra, and the long game • Stratechery

Ben Thompson:

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the reality is that credit card penetration is much lower amongst the poor in developed countries and in developing countries generally: a digital currency ultimately premised on owning a smartphone has the potential to significantly expand markets to the benefits of both consumers and service providers.

To put it another way, Libra has the potential to significantly decrease friction when it comes to the movement of money; of course this potential is hardly limited to Libra — the reduction in friction is one of the selling points of digital currencies generally — but by virtue of being supported by Facebook, particularly the Calibra wallet that will be both a standalone app and also built into Facebook Messenger and WhatsApp, accessing Libra will likely be much simpler than accessing other cryptocurrencies. When it comes to decreasing friction, simplifying the user experience matters just as much as eliminating intermediary institutions.

There is also another component of trust beyond caring about who is verifying transactions: confidence that the value of Libra will be stable. This is the reason why Libra will have a fully-funded reserve denominated in a basket of currencies. This does not foreclose Libra becoming a fully standalone currency in the long run, but for now both users and merchants will be able to trust that the value of Libra will be sufficiently stable to use it for transactions.

If all of these bets pay off — that users and merchants will trust a consortium more than Facebook; that Libra will be cheaper and easier to use, more accessible, and more flexible than credit cards; and that Libra itself will be a reliable store of value — than that decrease in friction will be realized at scale.

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This is a thoughtful article; Thompson isn’t taking things for granted. That idea of Libra growing at scale implies a world, eventually, where you have two currencies: WeChat Pay and Libra.
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Facebook’s new currency has big claims and bad ideas • Foreign Policy

David Gerard offers a counter-narrative:

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David Marcus, the Facebook executive in charge of the project, told the press last week that the problems of banking the unbanked were technical — that banks were unable to move money fast enough without a blockchain. This is completely backward. Experts know how to move numbers on a computer. The slow part is settlement and compliance: making sure that money transmitters are solvent, honest, and not fronting for drug runners. Banking the unbanked is a slow, one-on-one social process. Libra’s public relations material describes this as if it were entirely a technical problem — and none of it is.

The real motivation for the project seems to be ideological. Marcus was formerly at PayPal, and he understands payments and regulation. But he’s been a bitcoin fan since 2012 and was on the board of the cryptocurrency exchange Coinbase in 2017.

Marcus had been thinking about something like Libra for several years and had discussed the project with Facebook CEO Mark Zuckerberg since January 2018. Zuckerberg was interested in the project and the ideas—“a high-quality medium of exchange for the world, on a blockchain that could scale,” as Marcus described it in a press conference on June 17.

Facebook is under increasingly close attention from governments deeply suspicious of its track record on privacy, election manipulation, and fake information and its repeated defiance of calls to appear before elected representatives. Yet Facebook and its closest partners seem to think that they are large and powerful enough to swing a coup against the concept of government control of money.

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So, take your pick.
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Theranos founder Elizabeth Holmes’ fraud trial may not start until September 2020 • Silicon Valley

Ethan Baron:

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Lawyers and prosecutors in the federal criminal case against disgraced Theranos founder Elizabeth Holmes have agreed on a September 2020 start date for a trial expected to take three months, according to a new court filing.

Holmes is charged with felony conspiracy and fraud for allegedly misleading patients, doctors and investors about her now-defunct Silicon Valley blood-testing startup. She and former company president Sunny Balwani were indicted by a grand jury in June. They are charged with 11 criminal counts of wire fraud and conspiracy to commit wire fraud.

On Friday, federal prosecutors and lawyers for Holmes and Balwani filed a joint memo in San Jose U.S. District Court, saying the prosecution did not oppose the proposal by lawyers for Holmes and Balwani to start the trial in September 2020, “or as soon thereafter as would be convenient for the court.” Prosecutors had preferred a start date in the first half of 2020, but the defense maintained that more time was needed to prepare, according to the memo.

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So it will suck up huge amounts of time and money and happen much later than we’d hoped, if at all. Somehow this seems fitting.
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Bitfinex misled public: execs feared $BTC drop to $1,000 as Tether hit $0.86 in October 2018 • The Block

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As speculation of major problems at Bitfinex and Tether ran rampant last October amidst rumors of customer withdrawal issues, Bitfinex published a notice to the market stating that there were no issues with the exchange. As customers and the public questioned the solvency of the related entities and the price of the stablecoin Tether dropped to $0.86, the company’s official stance was that all was well…

…At the same time as the positive public statement, Bitfinex was having severe problems meeting customer withdrawal demands. In response to the troubles, a senior Bitfinex executive bluntly wrote to his external payments partner, “Please understand all this could be extremely dangerous for everybody, the entire crypto community. BTC could tank to below 1k if we don’t act quickly.”

Unfortunately, the alleged solution was to co-mingle customer and company funds, including those from Tether, to support Bitfinex redemptions [from Tether to a currency you can actually use for something in the real world]. This activity, which wasn’t disclosed by Bitfinex, is now being pursued as “fraud” by one of the top lawyers in the State of New York.

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“Unfortunately” doesn’t belong in that last paragraph. I mean, call me curmudgeonly, but there was no accident there. Bitfinex did it on purpose. The writer shouldn’t have written it, and any editor should have struck it out. Complain about fake news if you like, but the problem starts with substandard news; the internet largely killed trade publications by taking away the oxygen of advertising, which tore up the training ground for the rest of the business. “Unfortunately”.

Also, I’m still very suspicious of Bitfinex.
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Huawei exec: the foldable Mate X with Android intact to launch by September • TechRadar

Matt Swider:

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The foldable Huawei Mate X is still coming and we know when it’ll launch: September or sooner, according to a Huawei executive who spoke to TechRadar this week.

“It’s coming in September – at the latest,” said Vincent Pang, President of Huawei’s Western European Region, while visiting New York City. “Probably earlier, but definitely September is guaranteed.”

Where will the Huawei Mate X launch? “Any country that has 5G,” Pang told us, making sure to remind us that Huawei’s foldable phone is a 5G phone. 

This was likely stressed because the Samsung Galaxy Fold launched with a 4G LTE version (before ultimately being recalled), with a 5G version only spoken about once and never officially priced.

Of course, Pang’s “any country that has 5G” comment comes with a caveat. The Mate X isn’t coming to the US, which is no surprise given the Huawei ban in the US…

…will the Mate X actually run Android and its apps when it launches?

“Yes,” Pang told us. “Because it has already been announced,” suggesting that it may fall outside of Trump administration’s ban on US companies (including software companies like Google) from dealing with Huawei.

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Minor detail: the Galaxy Fold didn’t launch. They sent some to reviewers. Makes sense that the Mate will have Android – it was kitted out before the US ban – but updates might be in question.

September feels a long, long way off, though. Yet it’ll be here in a smattering of weeks.
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Errata, corrigenda and ai no corrida: none notified

1 thought on “Start Up No.1,097: Apple’s self-driving (again), RIP chatbot news, sizing Hong Kong’s protests, Facebook and Libra, and more

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