The Futures - No. 01

By Quantumrun

Apr 18, 2023

TLDR: In this issue

We cover recent advances in full self-driving systems, the US dollar being abandoned, recent government bans on ChatGPT, geopolitical foresight on China-Taiwan, and a bunch of interesting signals from around the web.

Full self-driving systems: A step closer to commercial autonomous cars

Tesla’s full self-driving system (FSD) might be getting better than ever. Elon Musk hinted in a tweet that Tesla's FSD system is becoming safer. With an impressive one million miles logged daily, or about 350 million miles annually, the FSD system has come a long way since the 90 million cumulative miles reported in Tesla's 2022 shareholder update. ARK's research shows that Tesla's current data collection doubling rate, based on Wright's Law, has grown by 40 percent in 4Q2022. With this rate, the automaker will likely approach nearly 300 million miles by the end of 2Q2023.

This rapid progress brings Tesla closer to achieving its bold, fully autonomous software updates sooner than expected. Furthermore, recent footage showcasing FSD's capabilities indicates that Tesla is nearing the launch of a robotaxi service. ARK predicts that robotaxis could account for 60 percent of Tesla's projected USD $4,600-per-share value by 2026. In ARK's simulation set, electric vehicles are expected to make up 57 percent of Tesla's revenue in 2026, albeit with significantly lower margins than robotaxi income.

Tesla plans to incorporate more advancements to its FSD upgrade, including unifying the vision and planning stack on and off the highway, replacing the old legacy highway stack, and adding voice drive-notes for drivers to provide feedback. Automatic Emergency Braking (AEB) has also been expanded to handle vehicles that cross ego's path, with replay data suggesting that 49 percent of collisions could be mitigated with this new feature. The update also includes improvements in lane predictions, detection of rare objects, and decision-making at crosswalks.

Wider implications of improved FSDs may include:

A significant decrease in traffic accidents and fatalities, as the majority of accidents are caused by human error. FSDs may also enhance mobility for the elderly, people with disabilities, and those who cannot drive, enabling more social inclusion and access to essential services.
Reduced transportation costs, as the expenses associated with human drivers (salaries, insurance, and training) could decrease. This development could result in lower prices for goods and services dependent on transportation and encourage economic growth. Furthermore, the market for FSD technology and associated infrastructure could create new business opportunities and spur innovation.
Governments implementing new policies and regulations to ensure the safe and efficient integration of FSDs into the existing transportation system. This effort could include updated road infrastructure, licensing and certification processes for autonomous vehicles, and reallocation of public funds to the development of FSD-related infrastructure.
Suburban and rural areas becoming more attractive as people can commute more easily and efficiently to urban centers without the stress of driving. This trend could lead to population redistribution, potentially affecting housing and job markets and developing new communities.
The development and improvement of FSDs accelerating advancements in related technologies, such as AI, machine learning, sensors, and communication systems. The integration of these technologies may drive further innovations in other industries, such as smart cities and manufacturing.
A decline in demand for human drivers, affecting the job market for professional drivers in trucking, taxis, and public transportation. However, FSD technology, maintenance, and infrastructure development may offer new job opportunities.

Future signals to watch

When capitalism starts taking climate change seriously, we’ll start seeing early climate migration signals like this: Florida property insurance rates are set to increase up to 60 percent, causing concerns among homeowners and experts about affordability and market stability.
AI video generators are approaching a tipping point, allowing users to easily create high-quality videos. Potential for misuse and deepfakes is a concern.
Business models like this will only accelerate the adoption of future driverless rideshare services: Automakers are exploring new revenue streams by offering subscription-based services to used car owners, potentially changing the traditional ownership model.
We’re getting close to forever machines: Hydrogen-electric yacht harnesses solar and seawater power for unlimited range. The innovative design could revolutionize sustainable maritime transport.
Good news in the fight against cancer and heart disease. Vaccines are expected to be ready by the end of the decade.
A future without excessive obesity: New weight-loss drugs, Ozempic and Wegovy, show promising results. And while their initial high cost and limited access may raise concerns about equity in healthcare, these drugs will promote a diverse array of generic versions that will serve the mass market.
AI chatbots can potentially promote extremism and terrorist propaganda, especially among the youth.

Is de-dollarization finally upon us?

De-dollarization is a process that's been quietly brewing for years but has recently accelerated due to various geopolitical factors. The most significant of these factors is how the US' weaponized its financial system to freeze Russian US dollar-denominated asset holdings in the weeks following its invasion of Ukraine. While this action limited Russia’s ability to weather international sanctions, it made all other countries rethink their dependence on the dollar.

Major economies worldwide are increasingly moving away from the dollar, striking trade deals in other currencies and reducing the number of dollars held in their central bank reserves. It’s a situation that is both a long time coming and all of a sudden.

As countries increasingly seek to break free from dollar hegemony, major players like Saudi Arabia and Mexico are joining the BRICS (Brazil, Russia, India, China, and South Africa) coalition and accepting other currencies for their resources. The move by Saudi Arabia is particularly notable, as it signals the end of the petrodollar dominance that has persisted for decades. With other countries also joining (or considering joining) anti-dollar coalitions, the implications for the dollar in both the intermediate and long term are uncertain.

That said, while the dollar may be weakening by a thousand cuts, it ain’t going anywhere. A few things to keep in mind:

While the BRICS countries do a lot of trade with China, they don’t have much in common, nor do they have much trade between each other.
There is little incentive to replace the dollar with another currency, like the Chinese Yuan, as that would give China a significant advantage, something countries like Russia or India would have reason to resist. And no one wants Russian Roubles.
Finally, the reason why the US dollar works as a reserve currency is because it is enormous (tens of trillions) and liquid. It’s so huge that the US doesn’t care about the dollar’s day-to-day fluctuations in the global markets, and it can afford to run deficits for decades in order to provide currency for everyone who wants to trade it, anytime, anywhere in the world. No other world currency has the size or the trust to pull that off … at least for now.

Wider implications of possible de-dollarization may include:

A more diversified global financial system, with multiple reserve currencies such as the Euro, Chinese Yuan, and maybe cryptocurrencies like Bitcoin. This diversification could reduce the risk of economic shocks tied to the US economy and allow other world powers to utilize significant debt financing for their domestic and international ambitions.
As countries reduce their dependence on the US dollar, the US may experience a decline in its geopolitical influence. The US has historically leveraged the dollar's dominance to impose sanctions and exert pressure on other countries. De-dollarization could weaken the effectiveness of such measures and encourage the rise of new regional or global powers.
Accelerating the development of digital currencies, blockchain, and other fintech innovations. These technologies can facilitate cross-border transactions, reduce reliance on the traditional banking system, and contribute to the rise of alternative financial systems and services.
The US being forced to increasingly adopt economic austerity policy measures to adapt to the weakened long-term demand for the US dollar.

Trending research reports from the world wide web

The AI Index Report, spearheaded by Stanford’s Human-Centered Artificial Intelligence (HAI), annually compiles and visualizes AI data to help decision-makers promote responsible, ethical, and human-centered AI advancements.
The Art Market Report offers an impartial analysis of the global art market, emphasizing key annual trends and activities across various sectors such as galleries, auctions, art fairs, and collectors.
Beautiful.AI report predicts AI will revolutionize the workplace in 2023. Expect more personalized experiences, automation, and collaboration tools.
Accenture's Technology Vision 2023 report predicts the rise of human-centered technology, responsible AI, and digital twins to enhance business and societal progress.
OpenAI and University of Pennsylvania researchers look into the potential impact of large language models (LLMs) like ChatGPT on the labor market.
In 2022, wind and solar energy achieved a milestone, contributing 12 percent of worldwide electricity, which could potentially indicate that emissions from the power industry have reached their highest point.

Italy’s ChatGPT ban: A push for better AI regulation

On March 31, OpenAI temporarily suspended ChatGPT's services in Italy following a ban by the country's Data Protection Authority (Garante) and an investigation into potential privacy violations. Garante claims that OpenAI, which Microsoft owns a majority stake, has not properly verified the age of users, who should be at least 13 years old. The agency also criticized ChatGPT for lacking a legal foundation for the extensive gathering and storing of personal data to train its generative AI model. OpenAI has been given 20 days to propose solutions or face the possibility of a fine of up to 20 million euros (USD $21.68 million) or 4 percent of its global annual revenue. OpenAI conveyed their readiness to cooperate in a letter, expressing their intent to comply with European privacy regulations and work together toward a mutual resolution.

Italy is not alone in grappling with the rapid advancement of AI and its societal implications. There has been a long-standing demand for AI regulation, but the technology’s remarkable progress of the technology has made it challenging for governments to keep pace. Still, Europe is anticipated to adopt a more stringent approach to AI regulation. The European Union (EU), a leader in tech regulation, has proposed the European AI Act, which will significantly limit AI in crucial areas, such as critical infrastructure, education, law enforcement, and the judicial system. These regulations and more like them in development around the world will inevitably affect generative models, regardless of whether it is explicitly mentioned.

As of 2022, computers can produce realistic artwork, compose full-length essays, or even generate lines of code within seconds. However, intellectual property laws are unprepared for the influx of machine-generated content and the complexities of machine-human collaborations.

Wider implications of increasing demand for AI regulation may include:

A slowdown in the pace of AI advancements, as companies and researchers would need to spend more time navigating regulatory frameworks and ensuring compliance. This trend could widen the gap between cutting-edge AI technologies and their real-world applications and delay the development of AI solutions for pressing global issues, such as climate change or healthcare.
Increasing demand for regulation leading to countries at odds over the appropriate level of oversight. This development could lead to political tensions between nations, impacting international cooperation and trade. Additionally, strict regulations could be leveraged by political factions to push their agendas or control AI research and applications, potentially leading to power imbalances and misuse of AI technologies.
More regulations ensuring that AI systems are ethically designed and implemented, reducing the risks of AI-driven surveillance, privacy invasion, and biased decision-making, thus promoting a more equitable society.
The demand for AI ethics and compliance professionals rising, as companies would need to ensure that their AI systems comply with regulatory requirements. However, the slowed development of AI technologies could also reduce the displacement of human labor by AI, potentially preserving jobs in sectors that would otherwise be heavily automated.

Outside curiosities

We love practical robotics applications: Recycling robots equipped with AI set to reduce landfill waste. They sort through trash to recover valuable materials and reduce pollution.
Neat interactive read: LinkedIn's Future of Skills report highlights the growing importance of soft skills and digital literacy in the workplace.
A new meme has arrived: generative AI videos merging pop culture and fashion. Harry Potter + Balenciaga, DC + Gucci.

Geopolitical foresight: What is Taiwan’s future amidst escalating Taiwan-China tension?

The Chinese government has recently persuaded Honduras to switch its recognition from Taiwan to Beijing. In response, Taiwan's President Tsai Ing-wen is going on a Central American tour to strengthen diplomatic support from the few countries still recognizing Taiwan as distinct from China. Despite the huge differences in size and resources between Taiwan and China, the status of relations between the island, the mainland, and the rest of the world depends on actual policies, not just recognition.

The US plays a critical role in this situation, as it has begun free trade negotiations with Taiwan. These negotiations are expected to finish within a year, and treating Taiwan as an independent country will be integral not only to US bipartisan foreign policy but also to domestic economic and trade policy. Once this occurs, formal recognition becomes less significant, as Taiwan will be fully integrated into American law. This integration will allow the US to take action and promote military ties with Taiwan as with any other nation.

The US is moving toward full recognition of Taiwan, not through formal declarations but through practical measures. With the way things are going right now, the recognition of Taiwan as an independent country is becoming a reality in all but name.

Wider implications of the US acknowledging Taiwan’s sovereignty may include:

Increased regional tensions and potential conflict between China on one side and Taiwan-US on the other.
Taiwan receiving greater international recognition and legitimacy as a sovereign state, which could lead to increased investment and cultural exchange between Taiwan and other countries.
Increased collaboration and investment in technological innovation between Taiwan and the US. This development could lead to significant technological advancements in artificial intelligence, biotechnology, and clean energy.
China heavily investing in marine warfare technology and further ramping up its military efforts, including warfare simulations.