Archives for March 19, 2018

IBM Highlights 5 Technologies It Hopes To Pioneer In 5 Years

We tend to think of innovation as being about ideas. A lone genius working in a secret lab somewhere screams “Eureka!” and the world is instantly changed. But that’s not how the real world works. In truth, innovation is about solving problems and it starts with identifying useful problems to solve.

It is with that in mind that IBM comes out with its annual list of five technologies that it expects to impact the world in five years. Clearly, each year’s list is somewhat speculative, but it also gives us a look at the problems that the company considers to be important and that its scientists are actively working on solving.

This year’s list focuses on two aspects of digital technology that are particularly important for businesses today. The first is how we can use digital technology to provide a greater impact on the physical world in which we all live and work. The second, which is becoming increasingly crucial, is how we can make those technologies more secure.

1. AI Powered Microscopes At Nanoscale

In the late 17th century a middle-aged draper named Antonie van Leeuwenhoek became interested in the magnifying glasses he used to inspect fabric. From those humble beginnings arose the new age of microscopy which has helped produce countless major discoveries over the last 450 years.

Today, IBM hopes to spur a similar revolution with nanoscale microscopes powered by AI. Unlike Leeuwenhoek’s version, these will not use optical lenses, but optical chips like the ones in your cell phone, except shrunk down small enough to observe microscopic cells in their natural environment and use AI to analyze and interpret what it sees.

As Simone Bianco and Tom Zimmerman, both researchers at the company, explained in their popular TED Talk, these devices can help us to better understand how plankton in the world’s oceans behave in reaction to stimuli and help mitigate the effects of global warming.

It is also partnering with the National Science Foundation (NSF) to transform our body’s cells into microscopic sensors. With a greater understanding of what’s going on in both normal and abnormal conditions, scientists will be able to better diagnose disease and come up with new cures. It may even help power science for the next 450 years.

2. Combining Crypto-Anchors And Blockchain To Secure The World’s Supply Chains

In 1999, a young assistant brand manager at Procter and Gamble named Kevin Ashton realized that an obscure technology that used radio waves to power small, passive devices could revolutionize supply chain management. Today, RFID chips are everywhere, helping us to track and manage inventory across the globe.

However, although RFID helps to increase efficiency, it can do little about security, which is has become a massive problem for two reasons. First, counterfeiting costs businesses hundreds of billions dollars a year and helps finance criminal gangs and terrorists. Second, in the case of things like food and medicine, insecure supply chains are a major health hazard.

IBM sees a solution to the problem of counterfeit goods through combining tamper-proof digital fingerprints it calls “crypto-anchors” with blockchain technology to secure supply chains at a cost low enough to spur wide adoption. It is also unveiling the world’s smallest computer this week. Costing less than 10 cents to make and smaller than a grain of salt, it can be used to analyze products such as wines and medicine and verify provenance.

As a first step to securing supply chains, the company has formed a joint venture with the global logistics firm Maersk to implement blockchain technology throughout the world. For businesses, this will mean a supply chain that is more efficient, reliable and secure.

3. Super-Secure Lattice Cryptography

2017 was a great year for cyber attackers, but not so good for the the rest of us. Major breaches at Equifax, Uber and in a database containing over 200 million voter records were just the highlights of a banner year for hackers. These attacks highlight a critical vulnerability for both our financial systems and the integrity of our democracy.

Part of the problem is that conventional cryptography methods are designed to be incredibly cumbersome — even for supercomputers — so information needs to be decrypted in order to be analyzed. When hackers get into a system, they can often take whatever they want.

IBM is working on a form of security called lattice-based cryptography. Unlike traditional methods, which use impossibly large prime numbers as a key, these use complex algebraic problems called “lattices” to secure information — even from quantum computers many years from now. A related technology, called Fully Homomorphic Encryption (FHE) will allow systems to analyze data without decryption.

So, for example, a hacker breaking into a customer or voter database will free to calculate how much tax is owed on a purchase or how many Millennials reliably vote for Democrats, but identities will remain secret. Businesses may also be able to analyze data they never could before, because they won’t actually need to be given decrypted access.

4. Rooting Out Data Bias For Reliable And Trustworthy Artificial Intelligence

As Cathy O’Neil explains in Weapons of Math Destruction data bias has become a massive problem. One famous example of this kind of bias is Microsoft Tay, an AI powered agent that was let loose on Twitter. Exposed to Internet trolls, it was transformed from a friendly and casual bot (“humans are super cool”) to downright scary, (“Hitler was right and I hate Jews”).

Even more serious are the real world impacts of data bias. Today’s algorithms often determine what college we attend, if we get hired for a job and even who goes to prison and for how long. However, these systems are often “black boxes” whose judgments are rarely questioned. They just show up on a computer screen and fates are determined.

IBM is now working with MIT to embed human values and principles in autonomic decision-making and to devise methods to test, audit and prevent bias in the data that AI systems use to augment human judgments. With numerous questions being raised about the ethics of AI, the ability to oversee the algorithms that affect our lives is becoming essential.

5. Quantum Computing Goes Mainstream

Quantum computing is a technology that IBM has been working on for decades. Still, until relatively recently, it was mostly a science project, with little practical value or obvious commercial applications. Today, however, the field is advancing quickly and many firms, including Google, Microsoft and Intel, are investing heavily into the technology.

Over the next five years the company sees quantum computing becoming a mainstream technology and has unveiled several initiatives to help make that happen.

  • Q Experience is a real working quantum computer that anyone who wants to can access through the cloud and learn to work with the new technology
  • QISkit, is a set of tools that helps people program quantum computers using the popular Python language
  • Q Network a group of organizations exploring practical application of quantum computers.

The effort to design new computing architectures, which includes neuromorphic chips as well as quantum computers, is becoming increasingly important as Moore’s law winds down and theoretical limits soon make further advances in transistor-based computers impossible.

Like the other initiatives in IBM’s 5 for 5, taking quantum computer mainstream within five years stretches the bounds of the possible, but that’s very much the point. Identifying a meaningful problem and setting a goal to solve it are the first steps in transforming an idea into reality.

How China's ride-hailing giant Didi plans to challenge Uber in Mexico

MEXICO CITY/SAN FRANCISCO (Reuters) – Working quietly from a shared office space in one of Mexico City’s trendiest neighborhoods, China’s ride-hailing giant Didi Chuxing is planning to hit its archrival Uber where it hurts.

A man walks by under an Uber logo in Mexico City, Mexico February 6, 2018. Picture taken on February 6, 2018. REUTERS/Carlos Jasso

Mexico is one of Uber Technologies Inc’s [UBER.UL] most prized and profitable markets. The San Francisco firm boasts a near monopoly here, with seven million users in more than three dozen cities. Which is precisely why Didi wants to knock Uber from that comfortable perch.

To learn how to conquer Uber, the Chinese firm is going straight to the source. It is poaching Uber employees for its Mexico management team. Didi employees are riding incognito with Uber drivers and chatting up passengers to pinpoint weaknesses, according to people familiar with its strategy. And Didi is thinking bigger than Uber, with ambitions for bike-sharing, scooters and motorcycles in Mexico, the people say.

The Chinese firm has deep pockets, thanks to blue-chip global investors that include Apple Inc and Japan’s SoftBank Group Corp [9984.T]. In the past year alone, it has pulled in nearly $10 billion to help fund global expansion.

“I would not want to go to war with Didi,” said Beijing-based investor and adviser Jeffrey Towson. “They don’t lose.”

But whether Didi can beat its nemesis here is far from certain. Mexico is the Chinese firm’s first attempt at building an operation from scratch outside of Asia – a costly gambit.

What is clear is that Didi is under pressure to keep growing to justify its $56 billion valuation. Latin America is the newest battleground for the old rivals, and Didi will be in enemy territory.

“It’s fundamentally different when you’re jumping across an ocean,” said IHS Markit analyst Jeremy Carlson.

DIDI ASCENDING

Didi Chuxing Technology Co is the world’s largest ride-hailing firm by number of rides, thanks to its commanding market share in China, where it has 450 million users. It completed more than 7.4 billion rides last year, not quite double Uber’s count.

Uber learned the hard way about Didi’s brawn. After waging an expensive campaign to crack the Chinese market, Uber in 2016 sold its operation to Didi in exchange for a 17.5 percent stake in the Chinese firm, which also made a $1 billion investment in Uber.

The titans continue to butt heads as they race to carve up the rest of the globe. Uber is the top dog in Latin America, where Brazil and Mexico rank among its largest markets outside the United States. In Mexico, Uber held an 87 percent market share as of August, according to Dalia Research, a Berlin-based consumer research firm.

(For a graphic on Uber’s market share in Latin America, see: tmsnrt.rs/2FhfZHo)

Didi wants to change that. Reuters was first to report that Didi had designs on Mexico, where it began recruiting employees last year.

The company declined to talk openly about its plans, but details of its strategy are emerging.

Nestled on the ninth floor of a WeWork shared office building in the capital’s Juarez neighborhood, Didi is building an operation from the ground up. In foreign markets such as India and the Middle East, it purchased stakes in existing companies. But Uber is so dominant in Mexico that there is no clear investment opportunity in a local competitor, according to people familiar with Didi’s thinking.

Hungry for experienced talent, Didi is aggressively recruiting current and former Uber employees, offering to nearly double their salaries in some cases, two people with knowledge of the matter said.

At the helm of Didi’s Mexico operation is Uber veteran Lin Ma, who helped launch Uber’s ill-fated venture in China. Now Didi’s director of international operations, Ma also worked on operations at 99, the Brazilian ride-hailing startup that Didi purchased at the end of last year, according to his LinkedIn profile.

Ma and others at Didi have so far poached at least five Uber managers and specialists in Mexico who have experience in operations, logistics, strategy, marketing and driver training, a review of LinkedIn profiles shows.

Ma declined to comment.

An Uber logo is seen outside an Uber car in Mexico City, Mexico February 6, 2018. Picture taken on February 6, 2018. REUTERS/Carlos Jasso

The company has yet to recruit drivers, and it is not clear which cities it will enter first, according to a person familiar with Didi’s strategy.

Rather than compete solely on price, the person said, Didi plans to promote safe drivers and fast response times; the company has built an algorithm to help it predict 15 minutes in advance where it should dispatch vehicles.

Didi is also considering offering bike-sharing, scooters and motorcycles in Mexico, while Uber so far has stuck to ride-hailing. A broad array of transport options helped Didi prevail in China.

But the biggest difference may come down to cash. To protect drivers, the person said, Didi will not handle cash fares in Mexico.

Uber, meanwhile, has pushed Mexican lawmakers hard for the right to accept cash in a region where tens of millions lack bank accounts. The move has generated business, along with controversy.

In Brazil, Uber saw a surge of robberies and murders of its drivers after the company began accepting cash there, according to a 2017 Reuters analysis. Uber says it has added tools to authenticate riders’ identities, better protecting drivers.

An Uber driver checks the route on a mobile phone inside his car in Mexico City, Mexico February 6, 2018. Picture taken on February 6, 2018. REUTERS/Carlos Jasso

Mexico has not seen a similar wave of attacks so far. Nevertheless, Uber’s position puts it at odds with regulators in some Mexican states.

While Didi appears to be sidestepping that obstacle, it faces cultural hurdles in Latin America, according to Daisy Wu, head of international business at Yeahmobi, which helps Chinese startups go global.

Latin American consumers generally prefer U.S. brands to Chinese brands, she said, and Chinese business culture can be off-putting to local employees.

“Most of the Chinese companies that have gone to Latin America are still trying to be successful,” Wu said.

Didi, for example, bewildered Mexico job candidates by trying to schedule interviews the week of Christmas.

“I was very surprised … I was thinking, should I cancel my vacation?” one applicant told Reuters.

UBER’S BATTLE

Uber’s lead in Latin America, meanwhile, has taken on heightened importance as it prepares for a potential initial public offering next year.

The company, which lost $4.5 billion last year, is facing fierce competition at home and in Asia, and a regulatory crackdown in Europe. It is also recovering from a year of scandals that saw co-founder Travis Kalanick forced out as chief executive in June amid multiple federal criminal probes and a workplace marred by sexual harassment allegations.

Andrew Macdonald, Uber’s vice president of operations for Latin America and Asia Pacific, said Uber is prepared to do what it takes to remain dominant in Mexico, a profitable market amid a sea of losses.

“Whether that’s more spending on customer acquisition or more deeply engaging with our existing customers, that will continue to be our focus,” he said.

Uber is committed to maintaining cheap fares for its basic service to keep its Mexican customers loyal, Macdonald said. But he said the company is considering adding more ride options such as upscale cars that would boost revenue.

If Uber is nervous about Didi stealing its lead in Mexico, it is not showing it. Macdonald said the learning curve is steep, something its rival is about to find out.

“Didi has significant bankroll,” Macdonald said. “But there are significant local complexities.”

Reporting by Julia Love in Mexico City and Heather Somerville in San Francisco; additional reporting by Noe Torres in Mexico City.; Editing by Marla Dickerson