From Exponential View #384: OooberUber surprised a lot of us and turned cash flow positive in the second quarter. The beat – $308m vs expectations of $109m – is remarkable. So too are other numbers: 1.87bn trips in the quarter, up 22%. This might mean that many of the optimists (and I wasn’t one) were right: Uber could hit the kind of scale that makes its business work. Uber has taken 13 years to get this milestone. Amazon took 14 years before its first profitable (and cashflow positive) year. Can Uber follow in its footsteps? Hubert Horan has been a meticulous analyst of Uber and is not convinced believing “[t]oday, Uber is offering much worse service at much higher prices than the traditional taxi industry that it had ‘disrupted’”.See also: Amazon’s second act, cloud computing, is on a tear. With more than $120bn in capex since it was created, AWS revenue is nudging $20bn a quarter,(with operating margins around 25%) up from under $5bn a quarter five years ago. Hot act, cool jobsThe climate impact of the weirdly named Inflation Reduction Act will be significant. It should reduce cumulative GHG emissions by about 6.3 gigatons and help the US close about 2/3 of its emissions gap to 2030. (The US emitted about 4.9 gigatons of the bad stuff last year.) So many of these policies exist in systems with feedback loops which are hard to model. We’ve seen electric vehicles and solar power outstrip most expectations, so I wouldn’t be surprised that – if passed and other things being equal – the impact is greater than this. Such shifts will create demand for all sorts of new highly-skilled jobs. One estimate is 9m new jobs in the US alone, about a million a year for the next decade or so.This level of job creation might be a bottleneck. The UK’s NESTA looks at the need for heat pump installers in the coming years. Britain currently has 3,000, and likely needs 27,000. Achieving such rapid upskilling might mean policy interventions to ensure coherent pathways for reskilling while maintaining the same quality of work.Short morsels to appear smart during the crypto meltdownRana Mitter on China’s looming demographic disaster. See more in EV#383.China produced 366,000 industrial robots in 2021, up nearly 68% on the previous year. See also, the AI startup creation boom in China is over. Only 57 AI companies received venture backing last year compared to over a thousand a year between 2015 and 2017. Total value of investments didn’t slow down with RMB4bn ($600m) deployed last year up 53% YonY. (Unsurprising: mature firms need more capital than fresh startups. Full report.)
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Can't believe it's August already! Robots…
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From Exponential View #384: OooberUber surprised a lot of us and turned cash flow positive in the second quarter. The beat – $308m vs expectations of $109m – is remarkable. So too are other numbers: 1.87bn trips in the quarter, up 22%. This might mean that many of the optimists (and I wasn’t one) were right: Uber could hit the kind of scale that makes its business work. Uber has taken 13 years to get this milestone. Amazon took 14 years before its first profitable (and cashflow positive) year. Can Uber follow in its footsteps? Hubert Horan has been a meticulous analyst of Uber and is not convinced believing “[t]oday, Uber is offering much worse service at much higher prices than the traditional taxi industry that it had ‘disrupted’”.See also: Amazon’s second act, cloud computing, is on a tear. With more than $120bn in capex since it was created, AWS revenue is nudging $20bn a quarter,(with operating margins around 25%) up from under $5bn a quarter five years ago. Hot act, cool jobsThe climate impact of the weirdly named Inflation Reduction Act will be significant. It should reduce cumulative GHG emissions by about 6.3 gigatons and help the US close about 2/3 of its emissions gap to 2030. (The US emitted about 4.9 gigatons of the bad stuff last year.) So many of these policies exist in systems with feedback loops which are hard to model. We’ve seen electric vehicles and solar power outstrip most expectations, so I wouldn’t be surprised that – if passed and other things being equal – the impact is greater than this. Such shifts will create demand for all sorts of new highly-skilled jobs. One estimate is 9m new jobs in the US alone, about a million a year for the next decade or so.This level of job creation might be a bottleneck. The UK’s NESTA looks at the need for heat pump installers in the coming years. Britain currently has 3,000, and likely needs 27,000. Achieving such rapid upskilling might mean policy interventions to ensure coherent pathways for reskilling while maintaining the same quality of work.Short morsels to appear smart during the crypto meltdownRana Mitter on China’s looming demographic disaster. See more in EV#383.China produced 366,000 industrial robots in 2021, up nearly 68% on the previous year. See also, the AI startup creation boom in China is over. Only 57 AI companies received venture backing last year compared to over a thousand a year between 2015 and 2017. Total value of investments didn’t slow down with RMB4bn ($600m) deployed last year up 53% YonY. (Unsurprising: mature firms need more capital than fresh startups. Full report.)