D2D: Is AI Ready for Lift Off, or Just Another Airline
Also, big changes in Telco Cloud, a new analog company, a closer look at the future of Venture, and more
Highlights from the week include growing questions about AI Factories, the potential for software to upend AI, and a new analog chip company emerges.
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Highlights from our Blog
AI Factories, data center operators independent of the hyperscalers, are consuming a large share of data center electronics this year and next. But this is a capital intensive business, requiring highly skilled labor, with limited choice of suppliers and high energy costs. How is this any different from airlines, the notoriously most-disliked industry on the Street? One difference is that airplanes have a 12-year depreciable life, GPUs are much less. Be careful where you choose to invest here.
Part of the magic of software is the potential for someone to come along and find a radically better way to execute some task. Twenty years ago, the team of ID Software found a shortcut for shading graphics, which helped create a hit game, but also upturned the entire compute industry. Is something like that possible with AI? We found an academic paper which may open up a way to radically reduce GPU requirements for AI models. We have no idea if it works, but enough people are looking at it that we have to think everyone acknowledges that something like this is possible.
We continue our look at the changing Venture industry, exploring what the industry will look like when it comes out of its current gloom. The biggest firms will likely continue their transition into “asset managers”, leaving room for new firms to bring the industry back to its roots, evaluating companies and technology, a break from the recent past where Venture investing was readily quantifiable and decisions were made by spreadsheets alone.
For some reason, people tend to overlook the analog chip industry. We understand it is not as exciting as some other categories, and the industry may seem hopelessly fragmented. Nonetheless, we think the space is open to new companies. So we were heartened by the launch of Orca Semi, which is bringing a disciplined approach to tackle a real need for their customers.
If you like this content, you should check out our podcast The Circuit
Semis, Hardware and Deep Tech
Our friends at Expedera wrote an explainer looking at the way in which AI accelerators move data around their chips. Our sense is that most “AI accelerators” are warmed over GPUs or DSPs. There are real efficiencies to be found in rethinking the cores of those accelerators from first principles.
Realtek has unveiled a sub-$100 5GB ethernet switch. These were tens of thousands of dollars not so long ago.
TSMC is reportedly exploring rectangular silicon substrates. Geometrically this could provide a big boost to fab output, but it would probably take a few tens of billions of dollars to upgrade the supply chain to make this possible.
IoT module company CalAmp filed for bankruptcy as part of a planned restructuring. We profiled the company last year. They missed the transition to software, and instead let their channel partners capture much of the value of their offering. Hopefully, this will allow them to pivot more strongly.
Networking and Wireless
There have been some big developments in the Telco Cloud Space. Amazon’s AWS and Microsoft’s Azure, have been duking it out for the past few years, trying to capture the opportunity to provide cloud networking services to the operators. Last week, Microsoft laid off over a few hundred people from their telco group. This proves that AWS’s approach of providing infrastructure as a service is more appealing than Microsoft’s platform as a service approach. This does not mean the end of Telco Cloud, it just shows the operators want to be able to choose their own software.
A good profile of our friends at Cohere Wireless. This article takes a look at competition in the RAN space for wireless networks. The industry has spent a lot of time talking about big concepts like Open RAN, but at heart it all boils down to spectral efficiency, something which Cohere is delivering.
AT&T: “We are building a multi-vendor network by moving our entire network to a single vendor.”
Everyone else: “That sounds painful.”
There is a lot of talk in Defense circles about ‘battlefield data centers’, putting more compute on the front lines. An obvious question from this is how to connect those systems to global communications networks. Put another way, how to you connect an aircraft carrier to the Internet with enough bandwidth to support cloud functions? Low orbit satellites are a big part of the solution.
Barcelona to ban “tourist apartments in 2028”. This is important to a distinct subset of our readers. Ourselves included.
Software and the Cloud
Android is notorious for its very porous security model. This developer took a long like at various attack vectors, but surprisingly found that stock Android has gotten a lot better in recent years in many ways.
An hour-long explainer on how Large Language Models (LLM) work.
Facebook’s Engineering team posted a deep dive on how they maintain their AI systems. Very complex systems for monitoring and serving to make these models useful in production. In part, this is just how large-scale cloud software works today, but AI has made some of this much more challenging.
In the perennial topic of “What is AI good for?”, Slack demonstrated a way to massively scale up their software testing using AI. Most of the gains from AI to date have been in small, but meaningful functions like this.
Diversions
We try to stay out of politics in this newsletter, but we have to admit we have been reading a lot about Land Taxes lately. Lessons from the world of video gaming on the subject seem to add to their appeal.
Every week we hear about some new miraculous treatment for once untreatable diseases. This week is gene editing to treat cystic fibrosis.
Image by Microsoft Co-Pilot
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