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Following the EuroHPC Summit conference in Gothenburg, Sweden, last month, HPCwire asked Steve Conway, senior analyst at Intersect360 Research, to interview Anders Jensen, executive director of the EuroHPC Joint Undertaking since September 2020. This appointment continues Anders lifelong interest in supercomputers, starting with his time at the Technical University of Denmark, where he earned an MS and an MBA. After spending the first part of his career working in engineering and pioneering IEEE802.11 wireless network technology with Symbol Technologies, Anders joined Cargolux Airlines International as IT director and was instrumental in the spinoff of the Cargolux IT department into CHAMP Cargosystems S.A. In 2011, Anders became director of NATO Headquarters Information and Communication Technology Service, assuming responsibility for all of NATOs information and IT services as well as one of the largest classified networks in Europe.

HPCwire: An important goal of the EuroHPC Joint Undertaking (EuroHPC JU) is to establish European sovereignty in HPC and quantum computing. Why has establishing sovereignty become more important in recent years?

Anders Jensen: You are right! The primary raison dtre of the European High Performance Computing Joint Undertaking was precisely to increase the digital autonomy and sovereignty of the European Union. Building a European sovereign supercomputing ecosystem is critical on many levels.

Thanks to the fleet of the first world-class and top-ranked EuroHPC supercomputers, European scientists and industry are increasingly processing their data inside the EU. Such a trend is not only advancing science and boosting the innovation potential of companies and SMEs in Europe, but is also reinforcing the protection of the privacy, data protection, commercial trade secrets and ownership of data in Europe.

Fostering Europes technological leadership in HPC and quantum computing is also essential to bolster Europes competitiveness and resilience towards foreign technologies and imports.

All these elements were already true a few years ago when the EuroHPC initiative was launched but it is now even more obvious after recent international events such as the COVID-19 pandemic or the war in Ukraine, that establishing strong European digital and technological leadership and self-reliance in industry and science is of strategic importance for Europe.

We seem to be in an interim period where some European HPC suppliers are able to compete effectively with the best in the world while others havent reached that status yet. The interim strategy seems to be relying on non-European technology where needed and increasing the portion of European technology content in HPC systems procured under the JU. Is that correct?

As you know, in parallel with procuring and installing top-of-the-range supercomputers across Europe, the EuroHPC JU funds an ambitious research and innovation program to develop a full European supercomputing supply chain, from processors and software to applications and know-how.

Some initial progress is already tangible, such as the recent announcement made by SiPearl with the backing of our European Processor Initiative (EPI) project. The commercialization of Rhea, the worlds first energyefficient, HPC-dedicated microprocessor designed in Europe to work with any third-party accelerator GPU, artificial intelligence, quantum is now planned for next year.

But as you underlined, this is an ongoing process, and efforts are still needed before reaching a full European supercomputing supply chain. Currently some non-European technologies are still needed if we want to place Europe in a leading position in the global supercomputing race and equip European users with a broad range of technologies and world-class machines that can boost European research and innovation.

Once Europe attains comprehensive technology independence, will HPC suppliers based outside of Europe have a role to play, for example if they perform a lot of research in Europe?

As I said, the JU is just taking the first steps to fill some gaps in the European HPC ecosystem and supply chain. The JU is guided by the European Commission and 33 European participating states who are indeed promoting the concept of technological autonomy. It is for the JU to implement their policies in the shape of R&I projects and procurements as agreed by our governing board in the context of the Multi-Annual Strategic Program and the implementation of its Work Program.

This strategy is win-win for all as it is leading to more R&I in HPC globally. This means that the global HPC sector as a whole will grow as investment in HPC technologies increases. HPC suppliers are all welcome to invest in Europe, and are indeed doing so now that they see that Europe is investing heavily in HPC technologies. Equally important, when the time comes, Europe will be more competitive globally in HPC and able to deliver greener and more innovative HPC solutions. So the question really is, will European vendors also be able to compete with non-EU vendors outside their European home markets?

To ensure that this happens, the JU will continue efforts to develop a full European supercomputing ecosystem. Over the last few years, EuroHPC JU has already seen a major shift in the global HPC market place. Last year, for the first time, Europe was ranked among the worlds top 5 in the Top500 list with LUMI and Leonardo. Europe is now recognized as a global leader in HPC by its partners.

Protective barriers exist today for European suppliers attempting to win HPC business in the U.S., Japan and China. Once Europe has an independent HPC supply chain equal to the best in the world, do you think Europe might need to establish its own protective barriers?

Our mandate is clear. We have been asked to spend European money to build a European HPC ecosystem which involves investment in HPC and quantum computing infrastructure, research and innovation, building up HPC competencies in applications, technologies and skills and of course usage. To do this, we will work with partners who are willing to contribute to our programs. Europe has invested in a very large HPC infrastructure and we need to ensure that Europeans are the first to benefit from this. If reciprocal arrangements can be found with third countries to explore strategic research and innovation partnerships, then this will be welcome. For example, we are working with U.S. companies including Intel, AMD, Nvidia and HPE, who are helping us build our HPC Infrastructure. We also have a call open at the moment to strengthen our cooperation with Japan.

Another aspect of sovereignty is that success metrics in exascale initiatives now rely less heavily on Linpack and more heavily on targeted performance gains on end-user applications that are considered important for a specific country or region. Is the JU taking this formal approach? Are there applications or market domains that the JU recognizes as especially important for Europe?

European researchers have a long and successful track record of developing HPC applications for research and engineering. It is part of the mission of the JU to build on this ecosystem and support further developments, for example by providing infrastructure and research grants that address challenges in the relevant domains and communities.

In this respect, the JU, as well as our communities and stakeholders, are well aware of the limitations of a single number resulting from an HPL benchmark run to describe the capabilities of an HPC system for the existing diversity of HPC applications.

Although there are currently no specific plans to abandon the concept of ranking the worlds fastest supercomputers, we note that application-focused benchmarks oriented towards real use cases already play a prominent role in system procurements, making sure that the EuroHPC supercomputers can serve a broad range of application domains. On this aspect, there is an increased emphasis placed on artificial intelligence and machine learning benchmarks as we see an increased demand for applications integrating such approaches into users workflows.

Unlike the U.S., Japan or China, Europe isnt a single country with a single focus for sovereignty. Aside from advancing the HPC status of Europe as a whole, the JU serves 33 European states, each with its own language, culture and priorities for HPC use. Can you talk about the EuroCC initiative?

Indeed one of the challenges that Europe faces is that European countries are at very different levels of HPC expertise and experience, and the challenge is to even this out.

EuroCC is one the JUs strategic initiatives to identify and address the skills gaps in the European HPC ecosystem and coordinate cooperation across Europe to ensure a consistent skills base. EuroCC has built a European network of more than 30 national HPC competence centers across Europe. The EuroCCs competence centers act as hubs to promote and facilitate HPC and related technologies across a range of users from academia, industry especially SMEs and public administration. The aim is to increase access to HPC opportunities and offer tailored solutions for this fast-evolving field.

By first identifying their available competencies, individual countries can maximize synergies to build national competence portfolios. To ensure these benefit the whole network, European-level activities are coordinated at a European level. The NCC network also cooperates with other EuroHPC projects, such as Centers of Excellence for HPC Applications, and external bodies including the ETP4HPC and PRACE.

EuroCC is one the JUs flagship projects and among the very first projects to get off the ground. With a second funding phase which started in January 2023, the NCCs will continue to boost synergies between the European and national levels to support a thriving European HPC ecosystem.

I understand that researchers in countries participating in EuroCC at the national level can also apply for access to European supercomputers. How does that work?

The access policy is currently the same for everyone: researchers from academia, research institutes, public authorities, and industry established or located in an EU Member State or in a country associated with Horizon 2020 can apply and access the EuroHPC supercomputers free of charge.

Currently three calls to access the EuroHPC supercomputers are open: the call for regular access, the call for extreme scale access and the call for benchmark and development access.

The calls are open for all fields of science and categories of applications (scientific, industry and public sector). The extreme scale access call is specifically distributing resources, from the EuroHPC pre-exascale systems LUMI, Leonardo and MareNostrum5 while the regular access and the benchmark and development ones also include the four petascale systems.

The calls are continuously open with several cut-off dates through the year. TheEuroHPC JUAccess Resource Committee, composed of leading international scientists and engineers, is ranking the proposals received and produces a recommendation to award EuroHPC JU resources based on scientific and technical excellence. More details on the access policy or the open access calls can be found on our website.

Do you see AI, HPDA and quantum computing mainly as accelerators of established HPC modeling and simulation applications or as important enablers of new applications?

First of all, most AI and HPDA technologies build on HPC by using HPC hardware, software and infrastructure. Quantum computers, on the other hand, provide a fundamentally new computing paradigm and a quantum computer integrated into a supercomputer may, indeed, be considered as an accelerator for specific algorithms similar to the current role of GPUs that perform certain operations more efficiently than general purpose processors

Currently we observe the adoption of, for example, concepts from AI in traditional simulation algorithms and applications, boosting performance and also potentially enabling novel use cases. The use of a quantum computing infrastructure in many cases requires a redesign or reinvention of existing algorithms and is expected to trigger the development of new HPC applications in the long term.

One of the JUs goals is to provide users with a hybrid classical-quantum computer. Is it clear yet which quantum technology the computer will use? Which quantum technologies does the JU definitely want to explore?

Indeed, at the end of last year the EuroHPC JU has selected six sites across Europe to host and operate the first EuroHPC quantum computers: Czechia, Germany, Spain, France, Italy, and Poland. These quantum computers will be integrated into existing supercomputers.

Currently, we are still finalizing the hosting agreements with the six selected sites but what I can share at this stage is that the selection was made to ensure a diversity in quantum technologies and architectures and give European users access to many different quantum technologies. The JU will thus have the luxury of exploring different types of quantum technologies.

These six quantum computers come on top of two quantum simulators currently being developed under our project HPCQS and based on the technology of neutral atoms, supplied by the French company PASQAL. HPCQS aims to develop and coordinate a cloud-based European federated infrastructure, tightly integrating two quantum computers, each controlling 100-plus qubits in the Tier-0 HPC systems Joliot-Curie of GENCI and the JUWELS modular supercomputer at the Julich Supercomputing Centre (JSC).

I was very impressed by the sessions I attended at the recent EuroHPC Summit 2023 in Gothenburg, which had strong in-person and remote attendance. What do you see as highlights of that conference?

Thanks! The event was a great success with around 600 participants throughout the week. It was an important milestone for us, as this was the first EuroHPC Summit planned by our small JU team. It was an opportunity for the EuroHPC JU to reflect on our achievements in recent years, present our program and activities, and define our future priorities.

The Summit represents a coming together of the European HPC community. The program was the result of a collaboration with all the EuroHPC members, to highlight various aspects of European HPC and facilitate discussions with our partners and stakeholders. With almost 500 participants joining us physically in Gothenburg, I was reminded of the added value of meeting and exchanging in person and seeing our community around us.

A particular highlight of the Summit for me was the presence of our EUMaster4HPC students throughout the conference. Joining us as HPC Ambassadors, they were a big help to us from a logistical perspective, but it was also a huge boost to see these enthusiastic bright young faces attending their first HPC conference, learning about the community, making connections, and even securing internships and jobs for the future. We had a lot of positive feedback regarding the involvement of the students and we hope this will help to boost the visibility of this brand new program currently recruiting its second wave of students. By the way, the next deadline to apply online is the 31st of May.

Is there anything important about the JUs plans that we havent discussed yet? When can we expect the next big announcements?

The JU staff is currently very busy with the procurement of JUPITER, the first European exascale system, to be installed in Julich, Germany. We are very excited about this new step as this next-generation supercomputer represents a significant technological milestone for Europe and will have a major impact on European scientific excellence.

As the installation of MareNostrum5 is already well under way, we also look forward to officially welcoming this new system to our fleet! We will also announce more systems as two calls for expression of interest recently closed, including a call for the selection of a Hosting Entity for another exascale system.

In addition, we will launch by the end of the year a call for Expression of Interest for the selection of a Hosting Entity to acquire and operate an industrial grade EuroHPC supercomputer, as the objective is to widen the access to our EuroHPC supercomputers. In parallel, the JU contributes to the European Unions ambitions in European microprocessor technology on the basis of open standards, in particular the RISC-V instruction set architecture.

Another ambition of the JU for 2023 is to boost the development of the skills needed to widen the use of HPC in Europe. Several calls have been launched to boost European HPC training activities, such as an HPC Summer School, professional traineeships and a training platform. The calls closed earlier this month and the R&I team with external experts will now be busy evaluating the received proposals.

The JU has also launched a call to continue to support HPC applications with up to four additional Centers of Excellence (CoE) for HPC Applications addressing the exascale challenge. The call is currently still open. The objective is for the new CoEs to be launched early next year.

As you can see, many things are ongoing and there is never a dull moment at the JU!

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EuroHPC Executive Director Talks Europe's Supercomputing Future - HPCwire

By Lt. Gen. Dr. S.P. Kochhar, Director General, COAI

Quantum technologies represent a paradigm shift in the world of computing and telecommunications. It is not simply an incremental upgrade over classical computing, but rather a new approach that promises to provide unprecedented levels of speed, security, and efficiency.

Quantum communications can be used to transmit data securely and efficiently. Unlike classical communication, where information is transmitted in bits, quantum communication can transmit information in quantum bits, or qubits, which can be both 0 and 1 simultaneously. This property allows for much more efficient data transfer as well as the ability to perform calculations exponentially faster than classical technologies, allowing quantum computers to perform many calculations simultaneously, drastically reducing the time required to perform complex calculations

Additionally, quantum communication is inherently secure, as any attempt to eavesdrop on the communication will disturb the quantum state, alerting the sender and receiver to the intrusion. This makes quantum communication ideal for transmitting sensitive information, such as financial transactions and government communications.

Quantum technologies have the potential to revolutionize 5G networks by enhancing security, increasing network capacity, and reducing latency. Some of the applications of quantum technologies in 5G include quantum key distribution, quantum cryptography, and quantum sensing.

Quantum key distribution (QKD) is a technique that uses quantum mechanics to distribute encryption keys securely. QKD is a promising technology for 5G networks as it can provide unbreakable encryption, which is essential for securing critical communications. By using QKD, 5G networks can prevent eavesdropping and data tampering, which are major concerns in modern communication systems.

Quantum cryptography is another technology that can be used in 5G networks. It uses the principles of quantum mechanics to create unbreakable encryption codes. Quantum cryptography can ensure the integrity and confidentiality of data transmitted over 5G networks.

Quantum sensing is a technology that uses quantum mechanics to detect and measure physical parameters with high precision. Quantum sensors can be used in 5G networks to monitor the environment, detect anomalies, and optimize network performance.

Blockchain technology can also be used simultaneously with quantum technologies in 5G networks. Blockchain is a distributed ledger technology that can provide secure and transparent transactions. By using blockchain, 5G networks can ensure the authenticity of data, prevent data tampering, and enable decentralized trust. Blockchain can also enable secure peer-to-peer transactions, which can be useful for micropayments and other use cases in 5G networks.

There are several examples of the use of quantum technologies in 5G networks, although commercial deployment of these technologies is still in the early stages. Here are some examples:

1. In 2020, China Mobile partnered with QuantumCTek to deploy a 5G network that uses quantum cryptography to provide secure communication between two government agencies in Shanghai. The network uses QKD technology to encrypt data transmitted between the agencies, ensuring the security of the communication.

2. In 2021, SK Telecom, a South Korean telecommunications company, partnered with ID Quantique to deploy a 5G network that uses quantum cryptography to secure critical communication between its headquarters and data center. The network uses QKD technology to provide unbreakable encryption for data transmission.

As for factual figures, it is worth noting that quantum technologies are still in the early stages of commercial deployment in 5G networks, and it is difficult to provide exact numbers. However, it is estimated that the global market for quantum cryptography could reach $2.2 billion by 2026, driven by the growing demand for secure communication in 5G networks and other industries. Additionally, according to a report by ResearchAndMarkets, the market for quantum sensors is expected to grow from $278 million in 2020 to $1.1 billion by 2025, driven by the increasing adoption of quantum technologies in various applications, including 5G networks.

India has also been actively exploring the use of quantum technologies in various industries, including telecommunications. The Indian government announced the establishment of the Quantum Communication Application and Technology (Q-CAT) lab in Delhi, which is a joint initiative of the Department of Telecommunications (DoT) and the Indian Institute of Technology (IIT) Delhi. The lab is expected to develop indigenous technologies for secure communication, including QKD for 5G networks. The Indian Institute of Science Education and Research, Pune (IISER) also established a Technology Innovation Hub (TIH) on Quantum Technology with support from the Department of Science and Technology (DST), which will work towards development of novel computing and quantum materials, sensors, quantum communication devices and systems along with quantum computers.

Recently, the Union Cabinet of the Indian Government approved the National Quantum Mission (NQM), which aims to accelerate research and development in quantum technologies and establish India as a leader in this field, and involves a cost of INR 6,003.65 crore from 2023-24 to 2030-31. With this, India becomes the sixth country in the world to have a dedicated quantum mission.

The import of these initiatives is significant as they reflect Indias recognition of the importance of quantum technologies in various industries, including telecommunications. The establishment of the Q-CAT lab and the NQM are expected to accelerate the development and adoption of quantum technologies in India, which could have implications for the global quantum technology landscape. Furthermore, the indigenous development of quantum technologies in India could lead to the creation of new jobs and the growth of the domestic technology industry. It is an exciting time to be at the forefront of this quantum revolution, where the possibilities for discovery and advancement are endless.

See more here:
Envisioning a Quantum leap for the future of Telecom - Express Computer

When you visit the doctor or have a hospital stay, you and your patient data become elements in a vast, highly complex digital technology ecosystem. This is because you (as the patient) generate enormous volumes of data which is stored and analyzed across interconnected systems. The goal of all of this is improved health care outcomes, but the current health care digital landscape also represents a critical cyberattack surface. This is particularly true of medical devices and the internet-of-medical-things (IoMT). Security is serious matter in health care, and most organizations involved in health care technology are busy implementing countermeasures against prevailing cyberthreats. More work is needed, especially considering the looming quantum computing threat to data encryption. This article examines the quantum threat to health care data and technology and offers some ideas on how this serious risk can be mitigated.

Healthcare is a field that runs on digital technology. Healthcare organizations deploy millions of connected medical devices that store personal patient data and real-time biometric data. These devices allow doctors and patients to communicate faster, more efficiently and, in some cases, more inexpensively than is possible with past communication methods. For instance, a direct digital heartbeat transmission is far faster and cheaper than a fax machine. In addition, back-end systems handle medical records storage, billing and operations.

Every medical device, computer server, network and storage array is vulnerable to cyberattack. Today, this means anything from ransomware to zero-day attacksany threat vector that enables a malicious actor to interfere with health care processes or steal data. In the near future, this digital healthcare landscape will also be vulnerable to attacks from quantum computers.

Briefly, a quantum computer is a new generation of computing technology that utilizes sub-atomic particles and the principles of quantum mechanics to deliver exponentially faster computation capabilities than existing computers. There are many exciting potential uses for quantum computing, including in health care, such as protein folding. However, the technology is also expected to break todays unbreakable cryptographic keys that secure data and critical systems.

Security experts are worried, with good reason, that within a few years, todays current forms of cryptography will be rendered useless by the quantum threat. At that point, virtually all data and systems will be exposed to threats, including those systems that manage health care information. This would be catastrophic on multiple levels. The quantum crisis threatens patient health, the large and lucrative health care industry, society and even the United States national security.

If all cryptography protecting the security and privacy of medical technology becomes inoperable, then patient health is at risk. Attackers could disrupt hospital networks and delay patient care. They could cause pacemakers, defibrillators, insulin pumps and other critical health devices to stop working. This could cause people to get sick or even die. Indeed, this type of thing has already happened. For example, in 2019 a ransomware attack on a hospital resulted in the death of a newborn.

Health care is a multi-trillion-dollar industry. The quantum threat puts this enormous slice of the economy at risk. Even just one sector, the IoMT market, is rapidly accelerating, expected to go from a $14 billion valuation in 2017 to $158 billion this year.

Medical information is also valuable. Research suggests that it can be valued up to 50 times more than a stolen credit card on the black market. This is an attractive target for hackers.

Regarding legal liability and ethics, unsecured devices or device exploit comprise a violation of trust to patients. Device manufacturers have a fiduciary responsibility to protect patient data. Adding in regulatory penalties, such as HIPAA violations, the quantum threats potential costs appear to be astronomical.

Risks to individual patients are bad enough, but overall health care cyber risk exposure threatens the broader society. If health care systems, especially emergency services, are unavailable during a crisis, the public could be in danger. This is not as far-fetched a scenario as people might imagine. After all, ransomware attackers have targeted municipal government and law enforcement in tandem with hospitals. A quantum attack that devastates all such systems could destabilize the public order.

Health care information also figures into geopolitics and the world of intelligence. This may seem a bit cloak-and-dagger, but the reality is that adversarial nation-state intelligence services are stealing hundreds of millions of American health records. The 2015 Anthem breach is cited as an example. Its unclear exactly why they are doing this, but possible explanations include a desire to create a social map of the United States to identify spies. There is also a theory that the Chinese artificial intelligence (AI) industry is hacking American medical data to develop training data sets for medical AI software, which is considered a strategically important industry. The fascinating Wall Street Journal article What Does Beijing Want With Your Medical Records? explores this issue.

The government is taking a strong interest in cybersecurity for health care. U.S. federal agencies are expected to start mandating cybersecurity requirements through legislation such as the 2022 Protecting and Transforming Cyber Healthcare (PATCH) Act, which requires a software bill of materials (SBOM), as mandated by president Bidens May 2022 executive order. These measures also expect medical devices to have greater cryptographic agility.

The pending Healthcare Cybersecurity Act of 2022 is a further call-to-action from the government. The bill wants to make cybersecurity a primary goal of health care organizations and equipment manufacturers. This includes the critical step of protecting legacy devices incapable of withstanding todays cyberattacks. The bill is poised to impose financial constraints, with Medicare payment policies incorporating cyber expenses.

Quantum defense still needs to be added to the legislative agenda for health care, but it will almost certainly be included soon. The government is starting to mandate mitigations of the quantum threat in government systems. For example, the Cybersecurity and Infrastructure Security Agency (CISA) published guidance called Preparing for Post-Quantum Cryptography in 2022 in collaboration with NIST. Health care will likely follow.

It is important to start defending against the quantum threat now. Or, at a minimum, health care organizations can start preparing by assessing their cybersecurity to look for areas that will be vulnerable to a quantum attack. If health care companies want to follow the CISA/NIST guidance, they should start by inventorying their critical data and systems, including device operating systems. They ought to create an inventory of their cryptographic technologies and internal standards. This includes public key cryptography, which is most vulnerable to quantum attacks.

Health care organizations then need to move toward what is known as post-quantum cryptography, a new approach to cryptography that changes the way keys are generated, managed and used. Using advanced mathematical techniques, post-quantum cryptography methods can protect health care data from even quantum decryption processes.

Visit link:
Protecting Patient Data: Why Quantum Security is a Must in Health Care - Security Boulevard

Yall, as a child of the 90s, I will forever quote Ian Malcolm fromJurassic Park when he says that the scientists there were so preoccupied wondering if theycould do something they didnt stop to wonder whether or not theyshould.

And honestly, I feel like there are way too many stories where scientists arent worried enough about setting up the new hit disaster movie.

Because creating a wormhole in a lab honestly seems like a recipe for disaster.

Hatim Saleh, a research fellow at the University of Bristol and co-founder of DotQuantum, obviously doesnt think so, because claims to have created The first ever practical blueprint for creating in the lab a wormhole that verifiably bridges space.

He calls his invention counterportation, which reconstitutes a small object across space without any particles crossing.

Heres the thing, though: its still all conceptual, as the computers needed to make this happen havent been designed or built yet.

If counterportation is to be realized, an entirely new type of quantum computer has to be built: an exchange-free one, where communicating parties exchange no particles.

Saleh says hes not worried, though, as he has plans underway to build the technology described in his paper.

While counterportation achieves the end goal of teleportation, namely disembodied transport, it remarkably does so without any detectable information carriers traveling across.

It relies on an aspect of quantum physics called quantum entanglement. This allows entirely separate quantum particles to be correlated without ever interacting.

According to University of Bristol professor John Rarity,

This correlation at a distance can then be used to transport quantum information from one location to another without a particle having to traverse the space, creating what could be called a traversable wormhole.

If this sounds like a long shot, thats because right now, it definitely is.

But you know. That might not be a bad thing.

See original here:
Scientists Say They've Got A Blueprint For Creating A Wormhole In A ... - Twisted Sifter

This is an audio transcript of the Behind the Money podcast episode: Night School, Class 3 Big Tech vs the insurgents

[MUSIC PLAYING]

Peter Spiegel Welcome to Behind the Money Night School. Im Peter Spiegel. Im the US managing editor of the Financial Times. BTM Night School is a special series made in collaboration with Blinkist that will serve as a guide to the US economy in 2023. For tonights lesson...

John Thornhill I think AI is different. It does disrupt peoples jobs. I dont think it ever tends to replace jobs outright. What it does do is change the nature of those jobs.

Peter SpiegelFrom the rise of ChatGPT to lay-offs at companies like Meta and Amazon, tech has dominated the headlines in 2023. Here to help us make sense of it all is the Financial Times innovation editor John Thornhill.

John, looking at the US economy, 2023 has been a year where weve seen the economy slow, and that is nowhere more apparent than in big tech, where firms like Amazon, Google and Microsoft have all announced some of the biggest lay-offs of any American companies. Why are they being hit so hard?

John Thornhill I think several things are going on at the moment. And youre right. I mean, so far this year, the latest tally, I think about 100,000 jobs have gone from the big tech companies, which is a lot of jobs. Several things, I think. One, last year, I think during the whole Covid pandemic, all of the big tech companies overinvested. They thought the future was gonna arrive quicker than it in fact did. And everyone was going online. They were using Zoom; they were using Google Meet. Everyone is working remotely. So there was a big demand for tech products. And so I think part of the story is were just coming off the peak. The Nasdaq index of kind of tech stocks is down 16 per cent over the past year, although its gone up 12 per cent this year. And I think that really, its just a recalibration when you look at a lot of the hiring figures or the investment levels or the VC funding, 2023 compared to 21, its really still showing an upward tick. Its just that this blowout year of 2022 has now been rolled back.

Peter SpiegelSo these names that we were just talking about that dominate in many ways our daily life Microsofts, the Googles, the Amazons if were coming off the peak, are these lay-offs and the downturn sign that these companies are sort of losing the position in the US economy, that theyre gonna be diminished in the US economy going forward? Or is this a classic case of sort of retrenchment where theyre basically just sort of cutting costs to maintain their leadership position going forward?

John Thornhill Im definitely in the retrenchment school. If you look at the underlying trend lines on ecommerce or the shift to digital advertising or just the uptick of adoption of all these tech products, youre seeing the underlying trend is still moving very sharply northwards. Youre seeing a whole load of new start-ups being formed, partly as a result of the kind of tech lay-offs as well, that there are a lot of kind of surplus tech workers who are now thinking about what theyre gonna do. So theres been a big surge in kind of new business formation weve seen since the Covid pandemic. And I think just generally theres a whole secular trend towards increased use of technology. Five billion people in the world have a smartphone. Increasing amount of commerce is going online, about 20 per cent in the US now. And so I think the secular trend will eventually can outweigh the cyclical downturn.

Peter Spiegel All right. So lets talk about that because theres this trend towards increased use. I think when we talk about technology in general, we tend to focus on these big companies because, as I said, they tend to dominate our lives. But as you pointed out, new companies being started, a secular trend towards more use of technology in our daily lives, so although these big tech groups in Silicon Valley play an important role, its not the only way technology is impacting the US economy. But what are some of these trends that we should be watching, you know, to see whats going to influence our lives and whats going to influence the broader economy?

John ThornhillWell, I think part of the story is that youre gonna see a battle between the big incumbents the Microsofts, the Googles, the Amazons and so on that youve been talking about and the insurgents, if I call them, the next generation of those companies that are emerging. And I think its gonna be fascinating to see how this battle plays out. On the one hand, its been easier and cheaper to launch a company than ever before. You have, everyone can operate in the cloud, which means that the cost has been reduced, the cost of software has plummeted, and finance is more readily available than ever before. So I think we have seen this really interesting trend of new business formation post-the Covid pandemic and how these businesses grow and adopt the new technologies that are coming along. Are they gonna shake the market grip that the big companies have, or are we gonna see a lot more disruption from below?

Peter Spiegel OK, so disruption by insurgents takes us very quickly to what I mentioned at the top, ChatGPT. Now OpenAI, which is sort of the inventor or the developer of it, has gotten some backing from Microsoft, but it clearly has become a disrupter, as you say. And its also convinced a lot of people that AI has finally arrived, and it become a...have a real impact on the real economy. Whats your view? I mean, is AI now ready for prime time? Will it play a role as a disrupter, or should we not believe the hype?

John Thornhill Well, these technologies have been developing over several years. I mean, Google really, the first people who came up with the transformer technology, and GPT stands for Generative Pre-trained Transformers. So they were the people who first came up with the technology, and then its been spread and other people have adopted it. As youre saying, OpenAI, which is this fascinating, kind of San Francisco-based research company, has really kind of pioneered the use of what are called large language models or the ChatGPT that came out. And I think theyve had a huge impact. So I think what...the difference is that a lot of the big companies and Google and Microsoft in particular had been developing these generative models. But when we saw the launch of ChatGPT in November last year, they really went mainstream. Millions of people started playing with them. About a hundred million people started using them within two months of launch, which is an astonishingly rapid take-up of a new technology. And I think we all had that kind of wow moment where you prompt a question in ChatGPT and you get this extraordinarily plausible instantaneous text coming out of the machine. And I think it is an amazing thing. But I think people are only just beginning to work out how its gonna have an impact.

Peter Spiegel Let me play the cynic or the sceptic here, because it was not so long ago that we had another, quote unquote, disruptive technology in something called the blockchain. And the most vivid thing we saw about this blockchain was in cryptocurrencies. And yet in the last few months, weve seen a complete collapse of the most prominent part of the crypto exchange called FTX. And that has seemed to raise all sorts of new questions about cryptocurrencies in general, but also whether blockchain is actually as disruptive as we maybe once thought. Take me through your thoughts on blockchain, and why perhaps AI as a disruptive technology is more worth paying attention to or not versus the hype that was around blockchain?

John ThornhillWell, Gartner, the data company, came up with this quite useful model called the hype cycle, which is rather nice (Peter chuckles). And so they plot where each technology is on this chart that they produced according to how much hype there is around a particular technology. So at the moment, AI is very close to the top of the peak of inflated expectations, as they call it. People are getting so excited about it. Metaverse and blockchain have gone over the top of that peak, and theyre now in what the Gartner would call the slough of despond. (Peter laughs) And then after a few months after people have stopped talking about it, then you get the slow adoption. And thats really when I think a lot of these technologies go mainstream. So I think that youre seeing exactly that with blockchain, there is massive overhyping of it. We saw the whole collapse of the FTX crypto empire. People have almost shaken their heads and thrown up their hands in despair and thought, this is never gonna come to anything. But I think people will start thinking, what are the real uses of this? How can we adopt it? And I think we might begin to see some really interesting uses over the next five, 10 years.

Peter SpiegelAnd when you say find ways to use it, do you mean cryptocurrencies specifically or more broadly, the blockchain technologies and how something that is, you know, visible and transparent to the world and cannot be hacked at is something that other industries could use potentially?

John ThornhillI think its the underlying blockchain technology that people are beginning to think, is this a different way of handling data and making transfers in a way that is more decentralised, is not controlled by one central authority and so on? So I think a lot of the models that weve seen emerge so far have failed, but there is still, I think, possibilities that they could get adopted in the future.

Peter Spiegel Lets go back to AI and to a certain extent to ChatGPT, but AI more generally, because if you combine AI with robotics, you have a debate about whether basically increased automation and machine learning through robotics is good or bad for the US economy. So on the upside, theres the obvious economic argument that automation increases productivity and productivity is key to any country increasing its collective wealth. So therefore, on paper at least, this is a good thing for the US economy. But many of us have seen that there are, automation frankly takes jobs away from a lot of blue-collar Americans, which means there are even fewer well-paying jobs for the average American. So in your view, because you are a columnist, is automation and robotics, you know, a plus or a minus for the US economy?

John Thornhill I would say its definitely a plus. I think this debate has been going on for several centuries and in fact, ever since the Industrial Revolution, that its very easy to see which jobs are destroyed by new technologies and very hard to predict which jobs are gonna be created. I think AI is different. Its an incredibly powerful whats called a general purpose technology that infuses the whole economy at large. I think it will have an incredible impact on productivity in a whole load of different areas. And one of the ones Im most interested in is healthcare at the moment. But as you say, it does disrupt peoples jobs. So I dont think it ever tends to replace jobs outright. What it does do is change the nature of those jobs. In healthcare, for example, a lot of speculation out there that it will change the role of a doctor a lot more than it will change the role of a nurse, for example. In the past, when manufacturing was automated, it definitely hit the blue-collar jobs. It was that kind of automation of muscle. What AI is doing is automating the brain. And so I think thats gonna affect a lot more white-collar jobs going forward...

Peter Spiegel Hopefully not journalists...

John Thornhill Well, maybe some journalists (laughs), but not columnists, I think.

Peter SpiegelBefore I let you go, I want to change topic slightly from the hard science and the disruptive nature of technology to sort of the policy side of things, because one of the biggest stories in technology, I would argue, is that its become in many ways the big battleground in geopolitical conflict, particularly between China and the US. So almost on every sector in technology microprocessors, quantum computing, renewables, green technologies, 5G you have the US and China at loggerheads, sanctions, bans, all these kinds of things. Just to throw this out there, who do you think is winning the global tech war? Because there is a lot of nervousness in Washington that China has taken a quantum leap ahead of the west on many of these technologies. Is that paranoia? Is that actually happening? What would be your view in terms of where China and the US stand right now in advanced technologies?

John ThornhillIf I can put it in a slightly different way, I think both sides are winning, which means also both sides are losing. In some areas like 5G telecoms infrastructure that you were talking about, no doubt China has won that war. I think in open areas that are still now very competitive, in particular, three I would pick out. One is chips that you mentioned. At the moment, 90 per cent of the worlds leading chips are manufactured in Taiwan, which a lot of people in Washington worry is an incredible kind of geostrategic hotspot. What happens if Taiwan came off market? Thats obviously an enormous kind of strategic challenge for America, which is, explains why theres been this massive investment in kind of chip production in the US. AI, I think, is one of the other areas when you look at the papers that are now coming up. China has put an enormous effort into increasing its capability in that area. I think for the moment, as far as anyone can tell, America still has the significant edge in terms of research. But I think China has probably got the edge in terms of the application of a lot of these AI models, certainly kind of ecommerce and online world and digital payments and so on. So I think thats an even contest in a way. And then I think the real joker is quantum, and weve been spending quite a lot of time at the FT trying to investigate quantum computing. In truth, nobody knows who is ahead in this field.

The idea is that if one side or the other did develop a fully functioning quantum computer, they would be able to crack open the other sides encryption methods, the so-called Q-Day, which would have an enormous strategic impact if one of those two sides got ahead of the other. But the truth is that we have no idea really who is where at the cutting edge of this technology. So thats definitely an open race.

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Peter Spiegel OK, John, Im gonna ask you, if our listeners were to just walk away and say, here are the three things I need to take away from John Thornhills discussion, what are the three most important things do you think right now?

John ThornhillWell, first, I think the macro trend towards tech is still very strong. We had this blip in 22. Weve had the retrenchment in 23. But I think we still are gonna see a very strong uptake of technology, particularly in ecommerce, a whole load of software services and in generative AI. Number two would be the impact of generative AI. I think people are still trying to figure this out. Huge numbers of start-ups being created and getting funded right now, who are trying to work out how they can apply AI. Ninety per cent of the start-ups are gonna go bust, but the 10 per cent of them are gonna transform the workplace, I believe. And I think in many areas theyre gonna augment human creativity. Theyre gonna threaten a number of jobs, particularly kind of white-collar jobs. Theyre going to change the nature of work. But I think they will also augment human creativity and lead to a lot of increased productivity. And the third one is really how this all fits into the context of the US-China tech war. I think people have kind of pulled back from calling it the new cold war, but theres certainly very heightened rivalry between the two powers, most particularly in chips, where America is kind of really squeezing China. And China is putting huge effort into trying to develop state-of-the-art computer chips. But were also seeing it in the areas of kind of AI quantum computing and also synthetic biology.

Peter SpiegelOK, Im gonna be very unfair and push you even further. If theres one thing that our listeners should take away about technology and the US economy, what do you think that one thing is?

John ThornhillIts all about the humans, rather perversely. I would argue that technology is a subject that everyone gets obsessed by and they look at the kind of capabilities of the technology and what it could do. But technology is only useful when its applied, and thats all about how people use it. And so I think humans very much are in the driving seat still. Were trying to figure out how we use this technology. We can use it for wonderful, productive ends. We can also use it for very harmful purposes as well. Dont forget the humans.

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Peter SpiegelThanks again for listening. Im Peter Spiegel. You can find more of Johns reporting on FT.com. This episode was done in collaboration with Blinkist. If you want to find out more about conversations and topics like this, check out the Blinkist app. This episode was produced by Zach St. Louis. Topher Forhecz is our executive producer. Sound design by Breen Turner and Sam Giovinco. Cheryl Brumley is our global head of audio. Thanks for listening. Class dismissed.

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Night School, Class 3: Big Tech vs the insurgents - Financial Times