Google's Machine Learning triumph

When Deep Blue won chess match against Kasparov, as a data guy and coder I knew how it was done, its called brute force.  Almost 20 years later, Google's AlphaGo program has taken a leap in emulating human experiential learnings in deep neural networks, and winning Go.

"The key to AlphaGo is reducing the enormous search space to something more manageable. To do this, it combines a state-of-the-art tree search with two deep neural networks, each of which contains many layers with millions of neuron-like connections. One neural network, the “policy network”, predicts the next move, and is used to narrow the search to consider only the moves most likely to lead to a win. The other neural network, the “value network”, is then used to reduce the depth of the search tree -- estimating the winner in each position in place of searching all the way to the end of the game."

Google Research article by was of Dr. Mark Vorderbruggen, read here.  The article closes with:

"We are thrilled to have mastered Go and thus achieved one of the grand challenges of AI. However, the most significant aspect of all this for us is that AlphaGo isn’t just an ‘expert’ system built with hand-crafted rules, but instead uses general machine learning techniques to allow it to improve itself, just by watching and playing games. While games are the perfect platform for developing and testing AI algorithms quickly and efficiently, ultimately we want to apply these techniques to important real-world problems. Because the methods we have used are general purpose, our hope is that one day they could be extended to help us address some of society’s toughest and most pressing problems, from climate modelling to complex disease analysis."

The immigrant genius - Schema Violation

By way of Ms. Aruna Viswanathan, in the Wall Street Journal article The Secret of Immigrant Genius:

"Scan the roster of history’s intellectual and artistic giants, and you quickly notice something remarkable: Many were immigrants or refugees, from Victor Hugo, W.H. Auden and Vladimir Nabokov to Nikolas Tesla, Marie Curie and Sigmund Freud. At the top of this pantheon sits the genius’s genius: Einstein. His “miracle year” of 1905, when he published no fewer than four groundbreaking scientific papers, occurred after he had emigrated from Germany to Switzerland."

From the number of entrepreneurial businesses started to the number of patents published in the US alone, one easy answer is that the "Scruffy but determined immigrant, hungry for success, arrives on distant shores. Immigrant works hard. Immigrant is bolstered by a supportive family, as well as a wider network from the old country. Immigrant succeeds, buys flashy new threads."

Yet, the article debunks this myth and shares research showcasing various traits of immigrants that enable the creative disruption anchored in what is called Schema Violation.

Read this excellent article here.

Cars? No. Business/personal services driven transportation? Yes!

I believe the graph below from The Economist says it all from their article The driverless, car-sharing road ahead here:

The tie-ups between automotive companies and the large technology companies announced at CES like "Ford partners with Amazon to connect cars with homes" here, investments "GM is investing $500 million in Lyft to develop self-driving cars" here, and others are now the realization of the a future built upon technology driven services.  Will I own a car in 10 years from now, perhaps.  Will the new generation in high schools? That remains to be seen.

Let's just call it "How much is my dollar worth in the world?"

The famous Big Mac index should just be called the Dollar Index.  From The Economist in After the dips:

(Enlarge the image by clicking on it)

"Americans hunting for cut-price burgers abroad are spoilt for choice: the index shows most currencies to be cheap relative to the greenback. This is partly owing to the Federal Reserve’s decision to raise interest rates when the central banks of the euro zone and Japan are loosening monetary policy. The euro is 19% undervalued against the dollar, according to the index, and the yen 37%. Another force weakening many currencies, including the rouble, has been the ongoing slump in commodity prices since mid-2014. Shrinking demand from China and a glut of supply have sapped the value of exports from Australia, Brazil and Canada, among other places, causing their currencies to wilt, too. By the index, they are respectively 24%, 32% and 16% undervalued. If commodity prices continue to fall, they could slide even further."

The bigger concern for 2016 is the Dutch Disease:

"… as revenues increase in the growing sector (or inflows of foreign aid), the given nation's currency becomes stronger (appreciates) compared to currencies of other nations (manifest in an exchange rate). This results in the nation's other exports becoming more expensive for other countries to buy, and imports becoming cheaper, making those sectors less competitive."

Read an explanation of Dutch Disease here.

Read the complete article from The Economist here.

Australia - Mini stratup boom?

What are the ingredients of Silicon Valley that make it the Valley?  Is it the Venture Capitalists who understand risk and reward?  Is it the US bankruptcy laws that allow for the innovation to find new foot holds?  One thing is for certain, it is a culture, and attempts at its replication across the globe have not yielded the same results.

The Economist in From lucky to plucky shares the current trend in business innovation in Australia:

"Mr Lynch (of DesignCrowd) foresees a “mini startup boom” emerging in Australia. And he is optimistic that the interventions of the tech-friendly prime minister can only help Australia go from being the Lucky Country to one that makes its own luck."

One thing is for certain if history is a guide, politics and policy do not create technology booms.  Let's watch closely as Australia with a commodities driven economy moves forward in this quest.  See the complete article here.

Unicorns and regulations: Prophecy or parable

From the entertaining article Silicon Valley Unicorn Obituaries by Mr. Prabha Kannan in The New Yorker:

"Three unicorns passed away in the Bay Area last week after an extended battle with a particularly virulent strain of valuationitis. Gathered at their bedsides were executives and prominent venture capitalists, who confirmed the deaths. “The virus came out of nowhere,” the treating physician said. “One minute they were thriving entities worth billions, and the next . . . I haven’t seen cases of valuationitis with inflammation of this magnitude since, oh, way back in 2000.”"

Read the complete article here.

From the more sober evaluation from Schumpeter: Toy Story in The Economist:

"The threat of adverse regulation animates the question of whether the hoverboard fiasco is a prophecy as well as a parable. Silicon Valley has long displayed some of the classic characteristics of a bubble: companies vying to build the most eye-catching headquarters and CEOs competing to produce the most extravagant ideas to “change the world”. There are growing signs that private valuations of tech “unicorns” will not hold up when they are subjected to the rigours of the public market. Some unicorns have shied away from going public at the last moment and others such as Good Technology, a mobile-device security firm, have sold themselves at lower valuations than they had hoped. If regulators alter the landscape further, 2016 might be the year that such firms follow the hoverboard and go up in a puff of smoke."

Read the complete article here.

Free Basics and India

Mr. Mark Zuckerberg provided India with an excellent opportunity via Free Basics.  Its blockage is not a failure but an idea which will be implemented in short order via the astute businessmen of India through their influence on the country's government.  Such is capitalism in a socialist country.

The Guardian writes in an article here:

"Rather than teaming up with the developing world’s universally loathed mobile companies to get them to zero-rate your offerings, why not optimize Android for P2P file-sharing of material downloaded and cached at wifi hotspots – file swapping being a very common, sociable practice already in play across the developing world – treating the telcos like the enemies of progress that they have always been, joining with users in subverting and sidelining them?

India’s got millions of activists with an open internet bandwagon we should all be jumping on, and the next billion will go to the company that figures out how to work with them."

Let's watch closely, there are a billion connections waiting to happen, and it is a gold mine for whomever corners the market.

Oil benchmarks

West Texas Intermediate (WTI) is now trading on par with Brent, the current international standard.  Yet, the alignment of the price and the US export ban having been lifted as of the end of the year 2015, what does the future hold?  The Economist write in Crude Measures:

"A good benchmark has to reflect supply and demand for oil wherever it is used. WTI may continue to be influenced by bottlenecks in the American market. Brent reflects the market for oil in north-west Europe. That was once a positive, but as Europe’s share of global demand for oil declines, proximity to the continent is no longer the advantage it was.

That suggests that an Asian benchmark will rise to the fore. The Shanghai International Energy Exchange plans to launch its own yuan-denominated contract this year. The new benchmark will have trouble getting off the ground. For one thing, China’s capital controls make it difficult for foreigners to buy the yuan needed to trade the contracts. The wild swings in China’s equity markets set an unnerving example for investors. But time is on its side."

Read the complete article here.