First Movers Coalition Pledges $12 Billion For Green Tech During COP27

The World Economic Forum and the U.S. Special Presidential Envoy for Climate announced the expansion of a coalition of global companies and a commitment to spend $12 billion in 2030 purchase commitments for green tech to decarbonize the cement and concrete industry and other hard-to-abate sectors during the COP27 United Nations Climate Change Conference in Sharm El Sheikh, Egypt this week.

The latest expansion of the First Movers Coalition – made up of 65 companies with a collective market value of approximately $8 trillion – focuses on cleaning up one of the world’s most carbon-intensive industry sectors through purchasing commitments for low-carbon technology. From construction and engineering to real estate and developers, newly announced First Mover companies have committed to purchasing at least 10% near-zero cement and concrete per year by 2030.

The news comes at the same time as the Rockefeller Foundation released a first-of-its kind analysis and aggregation of climate finance globally, revealing a formidable gap. The new report, What Gets Measured Gets Financed: Climate Finance Funding Flows and Opportunities, developed in coordination with Boston Consulting Group (BCG), found that only about 16% of climate finance needs are currently being met.

To achieve net zero, public and private sector entities across the globe will need approximately $3.8 trillion in annual investment flows through 2025 but only a fraction of this capital is currently being deployed, according to the report. It says that emerging technologies and markets are experiencing the most severe financing shortfalls. Critical decarbonization levers such as carbon capture and sequestration and fuel cell technology are significantly underfunded, with only approximately 5% of needs met.

According to experts, the critical climate target of 1.5ºC can only be reached if new decarbonizing technologies are quickly developed. Demand signals today for innovative green technologies by 2030 are needed to ensure that innovative green solutions are invested in and scaled in this decade.

There is widespread agreement that large traditional companies have an important role to play in helping scale-up emerging green tech technologies by partnering with the young companies developing them. The First Movers Coalition is doing just that. Since the Coalition’s launch in 2021, companies in the Coalition have made advance purchase commitments by 2030 for near-zero carbon steel, aluminum, shipping, trucking, aviation, carbon dioxide removal solutions and now cement and concrete.

During COP27 Kerry announced the expansion of the First Movers Coalition alongside Brad Smith, President and Vice-Chair of Microsoft, Mads Nipper, Chief Executive Officer of Ørsted, and Fernando González, Chief Executive Officer of CEMEX. Founding coalition members of the cement and concrete sector are General Motors, Vattenfall, ETEX, Ørsted and RMZ Corporation.

Other companies that have recently joined the First Movers Coalition include Autodesk (aviation), Bang & Olufsen (aluminum), Constellium (aluminum), Emirates Global Aluminium (carbon removal technologies),), Hoegh Autoliners (shipping), PepsiCo (aluminium, trucking) and Rio Tinto (aviation, shipping and trucking).

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HEALTH

Sanofi Signs Research Tie-Up With Hong Kong Biotech Firm To Accelerate AI-Powered Drug Discovery

Sanofi has signed a strategic research collaboration with Hong Kong-based biotech firm Insilico Medicine in a deal worth up to $1.2 billion, to leverage artificial intelligence to speed up its drug-discovery process.The French healthcare company will put up as much as $21.5 million in upfront payment and target nomination fees to Insilico, which could rise to $1.2 billion subject to hitting certain undisclosed research, development and sales milestones, according to Insilico.

FINANCIAL SERVICES

JP Morgan And Mastercard Unveil Pay-By-Bank Service

JP Morgan is teaming up with Mastercard on a service that uses open banking to let customers make payments using their bank account information instead of a card. The Pay-by-Bank service offers ACH payments that use open banking so that customers can permission their financial data to be shared between trusted parties to let them pay bills directly from their bank account. This means that customers do not need to type in routing and account numbers each time they need to pay a bill. For billers and merchants, it automates consumer on-boarding and reduces the risk and cost of storing bank account information. JP Morgan says the offering will be particularly beneficial for recurring payments. Pay-by-Bank is currently being piloted with a few billers and merchants before an expansion next year.

UBS And Julius Baer Grapple With Offering Financial Advice In The Metaverse

Two of the world’s biggest wealth managers are experimenting with switching client meetings from oak-paneled boardrooms to the metaverse, but have struggled to overcome data security and motion sickness. UBS and Julius Baer, Swiss banks that specialize in providing white-glove financial advice to billionaires, have each trialed the use of clunky headsets and pixelated avatars to interact with clients, according to people interviewed by the Financial Times. But neither bank is close to rolling out a virtual reality offering to their ultra-rich customers after the experiments caused concern over the technology’s ease of use and the ability to share documents securely. “The technology is not there yet — frankly it looks like Atari graphics at the moment and people who have tried it have had feelings of motion sickness,” one bank executive involved in the trials was quoted as saying. “We also have a lot of issues with confidential and sensitive data security.”

MOBILITY

Renault and Google Are Teaming To Create A Software Defined Vehicle

A new pact, which expands on a previous collaboration between the two firms, will see Renault commit to making what it calls a “software defined” vehicle using technology from Google’s Cloud division. Using artificial intelligence, the two companies plan to create a “digital twin” of a new vehicle. Digital twins aim to replicate physical objects in a virtual setting so that they can be tested and monitored before real-world deployment.The deal will help Renault develop new onboard and off-board applications, the companies said. Renault will use data analytics to detect and resolve any failures in how the vehicle functions, and personalize users’ experience to adapt to often-used destinations, such as electric vehicle charging stations.

QUANTUM COMPUTING

Bosch, IBM Join Forces To Use Quantum Computing To Find Alternatives To Rare Minerals Needed For EVs

Germany’s Bosch has formed a partnership with IBM to use quantum computing and simulation technology to find alternatives to the rare earths and metals needed for electric vehicles.The minerals used in magnets in electric motors, membranes in fuel cells for hydrogen technology as well as in aerospace and defence are expensive and often mined in unsustainable ways. China supplies 98% of European Union demand for magnets made from rare earths, and battery minerals lithium, nickel and cobalt are also almost entirely imported from abroad. The research cooperation will use quantum computing to explore which different materials could partially or fully replace those currently used, Bosch’s corporate research and development chief Thomas Kropf told Reuters. The aim is to achieve results within a decade.

ROBOTICS

Amazon Debuts New Warehouse Robot That Can Do Human Jobs

Amazon has debuted a warehouse robot that can pick up and sort millions of individual unpackaged products, in a move that will automate more jobs as the U.S. e-commerce giant faces pressure to significantly cut logistics costs. The group said the robot, named Sparrow, is its first one with the capability to “detect, select, and handle individual products in our inventory”, a task that had previously been the exclusive domain of Amazon’s warehouse employees. Sparrow, a robotic arm that harnesses computer vision technology to identify and pick up small products, was unveiled at an event in Boston on November 10.

CYBERSECURITY

S. Korean University Announces 5G-Enabled AI-Based Malware Detection And Classification System for IIoT

While the Industrial Internet of Things has many advantages, it also comes with security threats that can create high risk situations. A team at S. Korea’s Incheon National University has developed a new AI-based design, based on a multi-layer deep learning approach, for a security system that can not only detect malware attacks in IIoT systems, but also classify them. Compared to conventional system architectures, the university says the new design showed an improved accuracy that reached 97% on the benchmark data set. The hope is that this new malware classification system can be used to secure real-time connectivity applications such as smart cities and autonomous vehicle and provides solid groundwork for the development of advanced security systems that can curb a wide range of cyber crime activities.

SUSTAINABILITY

DB Schenker Launches Global C02- Neutral Air Freight Offer



DB Schenker announced an offer that lets customers choose Sustainable Aviation Fuel (SAF) for their air transport to anywhere in the world and independent of the type of aircraft or airline used. Via virtual allocation of the biofuel, the company says in a press release that it is possible to avoid up to 100% of CO2 emissions. Currently, SAF is 3-5 times more expensive than regular fossil-based fuel. For their ESG reporting, customers that decide to pay the premium for virtual allocation of SAF for an air freight shipment receive certification for the exact amount of greenhouse gases avoided. While the actual physical insertion of SAF might occur on different flights, the exact CO2 emissions of a flight or shipment with conventional kerosene are avoided, according to DB Schenker This process is called a “virtual application” and can also be exercised for upstream emissions originating from the production and transport of the biofuel itself.


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Worldcoin’s Bid To Establish A Global User ID And Universal Basic Income

On June 24th OpenAI CEO Sam Altman officially launched Worldcoin, a controversial cryptocurrency project that aims to create a global identification system by scanning users’ eyeballs to help distinguish them from robots and provide the infrastructure to distribute a whole range of financial services including universal basic income. By day three Altman reported on Twitter: “Crazy lines around the world. One person getting verified every 8 seconds now.”

The project has 2 million users from its beta period and is now scaling up operations to 35 cities in 20 countries. The new venture has been accused of deceptive practices during its beta launch. Those accusations and its bid to collect biometric data and provide global financial services has prompted pundits to predict an inevitable clash with regulators.

“Risks include unavoidable privacy leaks, further erosion of people’s ability to navigate the Internet anonymously, coercion by authoritarian governments, and the potential impossibility of being secure at the same time as being decentralized,” Vitalik Buterin, the co-creator of Ethereum, a blockchain platform for decentralized financial applications, said in a July 24 blog posting.

The launch of Worldcoin is the latest in a string of advances at companies backed or led by Altman, including OpenAI’s release of ChatGPT in November of last year and the announcement in July that Oklo, a nuclear fission start-up chaired by Altman, is to go public in a deal valuing the company at $850 million.

“These are independent parts of a specific vision of the future which I believe in,” Altman said in an interview with the Financial Times. “But they’re all doing their own things and they all work independently.” Collectively, the FT notes “Altman’s projects could reshape society and their success would place him at the heart of a powerful network of companies.”

In the interview with The Financial Times Altman insisted he had no intention of “disintermediating” governments but suggested the public sector had “a lack of will” to lead innovation. “People ask me periodically, ‘don’t you think this should be done by the government? Isn’t it horrible that you are doing this as a private tech company?’,” he said. “Why don’t you ask the government why they aren’t doing these things, isn’t that the horrible part?’”

Worldcoin is not the first Silicon Valley tech company to try to launch a global digital currency Facebook’s Libra project (later renamed Diem) had the same goal but regulators and politicians ultimately killed it, due in large part to a lack of trust in tech and the companies who develop it. Critics point to the propensity of not just Facebook (now called Meta) but all powerful tech companies to move fast without considering unintended consequences and sometimes cynically use non-tech savvy members of the public as dupes.

The MIT Technology Review accuses Worldcoin of using such deceptive practices. “The startup promises a fairly-distributed, cryptocurrency-based universal basic income. So far all it’s done is build a biometric database from the bodies of the poor,” the magazine wrote in a 2022 article about Worldcoin’s beta testing.The magazine’s investigation said it found “ wide gaps between Worldcoin’s public messaging, which focused on protecting privacy, and what users experienced. We found that the company’s representatives used deceptive marketing practices, collected more personal data than it acknowledged, and failed to obtain meaningful informed consent.”

Meanwhile the US Federal Trade Commission announced July 13 that it has launched a probe into OpenAI, looking at whether the company has engaged in “unfair or deceptive” privacy and data security practices or harmed people by creating false information about them. “

Reuters also reported that U.S. senators Elizabeth Warren, a Democrat, and Lindsey Graham, a Republican, said on July 27 that they would push for an ambitious bill to create a new U.S. government regulator empowered to rein in Meta Platforms’ Facebook, Alphabet’s Google, Amazon.com and other Big Tech platforms.

At a separate hearing earlier this week a trio of influential artificial intelligence leaders testified at a congressional hearing, warning that the frantic pace of AI development could lead to serious harms within the next few years. Yoshua Bengio, an AI professor at the University of Montreal who is known as one of the fathers of modern AI science, said the United States should push for international cooperation to control the development of AI, outlining a regime similar to international rules on nuclear technology, according to a Washington Post article. Dario Amodei, the chief executive of AI start-up Anthropic, said he fears cutting edge AI could be used to create dangerous virus and other bioweapons in as little as two years. And Stuart Russell, a computer science professor at the University of California at Berkeley, said the way AI works means it is harder to fully understand and control than other powerful technologies.Russell said a new regulatory agency specifically focused on AI will be necessary. He predicts the tech will eventually overhaul the economy and contribute a massive amount of growth to GDP, and therefore will need robust and focused oversight.

A gap in thinking about what type of policing is needed for tech companies was evident in an announcement made this week by AI players. Four of the preeminent AI companies are coming together to form a new industry body designed to ensure “safe and responsible development” of so-called “frontier AI” models. In response to growing calls for regulatory oversight, ChatGPT developer OpenAI, Microsoft, Google and Anthropic announced the Frontier Model Forum, a coalition that draws on the expertise of member companies to develop technical evaluations and benchmarks, and promote best practices and standards.

While the Frontier Model Forum is designed to demonstrate that the AI industry is taking safety concerns seriously, it also highlights Big Tech’s desires to stave off incoming regulation through voluntary initiatives and, as Techcrunch noted “ perhaps go some way toward writing its own rules.”

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FOOD AND BEVERAGE

Israel’s Steakholder Foods Enters 3D Printed Fish Pilot With Gulf State

Steakholder Foods, an Israeli deep tech food company, has struck a deal to launch a pilot plant for 3D-printed “hybrid-fish products” with an unnamed member of the Gulf Cooperation Council, an economic union between Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.“The collaboration between the partners will leverage Steakholder Foods’ expertise in providing mature Ready-to-Cook 3D printer technologies and customized bio-inks, tailored to produce a wide range of species-specific cultivated fish and meat products, as well as vegetable-based products. The partners seek to utilize Steakholder Foods’ advanced technology to overcome the limitations of traditional fish and meat production, ensuring consistent, nutritious, and safe food products that closely mimic the taste, texture, and appearance of conventional meat, fish and vegetable-based products,” according to a Steakholder Foods press release.“The agreement foresees a material initial down payment to Steakholder Foods for the procurement of its 3D-printer technologies, followed by a milestone-based sales and procurement plan for industrial-scale output,” the company said.

Aleph Farms Applies To Sell Its Cultivated Beef In Switzerland

Israeli startup Aleph Farms has applied to Swiss food safety regulators for approval to sell its cultivated beef steaks in its first European market: Switzerland. A spokesperson told AgFunderNews that Aleph had had lengthy conversations with the Swiss Federal Food Safety and Veterinary Office (FSVO) to understand what was required under the country’s novel foods rules before submitting a safety dossier.Aleph and Swiss supermarket chain Migros, an early investor in the company, have “conducted extensive consumer research in Switzerland and navigated the intricacies of the country’s regulatory landscape for novel foods,” said the spokesperson.

CYBERSECURITY

U.S. Adopts New Cyber Rules

The Securities and Exchange Commission (SEC), Wall Street’s top regulator, adopted new rules on July 26 requiring publicly traded companies to disclose hacking incidents, a measure officials said was to help the investing public contend with the mounting cost and frequency of cyber attacks. The new cybersecurity rule will require companies to disclose a cyber breach within four days after determining it is serious enough to be material to investors. The rule would allow delays if the Justice Department deems them necessary to protect national security or police investigations, the SEC said. Companies will also have to periodically describe their efforts to identify and manage threats in cyberspace. The rule, first proposed in March 2022, forms part of a broader SEC effort to harden the financial system against data theft, systems failure and cyber-intrusions.

HEALTH

Could Worms Revived After 26,000 Years Hold The Secret To Helping People Survive Being Frozen or Hurtled Into Outer Space?



Scientists said they have revived worms buried in Siberian permafrost for 46,000 years. The half-dozen creatures, a type of nematode or roundworm, survived for millennia in permafrost by entering a state of suspended animation, according to a paper published Thursday in the journal PLOS Genetics. Genetic testing suggests the worms are a new and possibly extinct species, researchers said. “This paper could make people consider this third condition between life and death,” Teymuras Kurzchalia, co-author of the study and a biologist at the Max Planck Institute of Molecular Cell Biology and Genetics in Germany told The Wall Street Journal. Could the secrets of cryptobiosis help people survive being frozen or hurtled into outer space? That remains in the realm of science fiction, scientists told the Journal, but further study could reveal mechanisms such as the workings of genes or proteins that help cryptobiotic creatures survive in extreme conditions. Such insight could one day be harnessed to make people more resilient, researchers said.

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The Race To Net Zero Is Slowing: How Do We Ramp Up The Speed?

Transmutex, a 2023 World Economic Forum Technology Pioneer, is capitalizing on research validated at the European Organization for Nuclear Research to conceive an entirely new approach to nuclear energy, using particle accelerators to induce nuclear waste transmutation and produce carbon-free nuclear energy, in the hopes of speeding up the race to Net Zero.

“We have the ambition to accelerate the fight against climate change and reach industrial-scale within 10 years,” says Transmutex CEO Franklin Servan-Schreiber, a speaker at the Forum’s Annual Meeting Of The New Champions in Tianjin, China June 27-29. He says Transmutex’s solution is safer than traditional nuclear power plants because its approach does away with the danger of explosions; is cleaner because it uses thorium as fuel, which produces negligible amounts of long-lived waste; and it does away with the risk of proliferation since the technology can not be used to make nuclear bomb material.

Transmutex, along with other new players such as newcleo, Radiant, Terrestrial Energy, X-Energy and NANO Nuclear Energy, use small modular reactors (SMRs) which can be built more quickly and cheaply than traditional nuclear power plants. While SMRs are increasingly being seen as a viable near-term addition to the energy mix, innovative clean energy approaches alone will not help the world get to Net Zero and ensure affordable energy for everyone.

After a decade of progress, the global energy transition has plateaued amid the global energy crisis and geopolitical volatility, according to a new World Economic Forum report called Fostering Effective Energy Transition 2023. Countries have shifted their focus to maintaining secure and stable energy supply at the expense of universal affordability.

“The recent turbulence in energy markets has exposed how interconnected energy prices are with macroeconomic and social stability. This can, and has, put developing countries at risk of losing their momentum gained before the energy crisis on access to affordable, sustainable energy,” Roberto Bocca, the Forum’s Head of Energy, Materials and Infrastructure,said in a statement.“It further demonstrates the importance of balancing improvements in energy security, sustainability and equity – at the same time – to enable an effective energy transition.”

Scaling new technologies and ensuring energy equity will require huge amounts of capital as well as new types of collaborations and actions by governments, financial institutions, and large corporates in traditional businesses, says Maciej Kolaczkowski, who oversees the Forum’s new Advanced Energy Solutions community.

The International Energy Agency (IEA) estimates that around $2.8 trillion will be invested in energy in 2023. More than $1.7 trillion is going to clean energy, including renewable power, nuclear, grids, storage, low-emission fuels, efficiency improvements and end-use renewables and electrification. The good news is that for every $1 spent on fossil fuels, $1.7 is now spent on clean energy.

Deploying SMRs and other new solutions – such as peer-to-peer energy generation, green hydrogen, innovations in fusion, electric car charging, energy storage and carbon management technologies – at scale will require significant additional investment. The IEA notes that $0.9 trillion needs to be invested by 2030 to modernize electricity networks and build public electric vehicle charging stations, hydrogen refueling stations, direct air capture and CO2 pipelines, storage facilities, and import and export terminals. Another $1.7 trillion needs to be invested annually in low-carbon technologies in end-use sectors, according to the Forum’s report. Most of this investment will need to come from the private sector, supported by public policies that create incentives and set appropriate regulatory frameworks.

Like wind and solar, the giga scale and industrialization of advanced solutions have the potential to drive down costs so there is a need to exponentially accelerate the speed and scale of their deployment, says the report. For example, to be on the path to Net Zero by 2050, the energy system needs to see battery storage capacity grow 15 X and carbon capture, usage and storage grow 40 X by 2030. Similarly, the clean hydrogen market is expected to grow from $0.5 billion to $120 billion and advanced biofuels from $3 billion to $180 billion.

Challenges include the fact that the risk appetite of financial institutions is not always tailored to support these advanced solutions and that only a small fraction of these investments go to emerging markets and developing economies, says the report. In addition, sovereign and currency risks, the lack of standards and regulations, and slow permitting processes remain significant barriers to clean energy investments in these economies.

The new Forum community, which is comprised of technology companies, project developers, financial institutions, investors, and the large corporates who will buy the green solutions, aims to help speed up deployment of advanced energy solutions from decades to years , says Kolaczkowski.

Action is urgent. The to-do list includes streamlining permitting, incentivizing the purchase of clean energy sources and accelerating commitments from large corporates to purchase green energy from new entrants. “Countries must move at a faster pace than they are now to transform their energy systems; moreover, the window for such effort is closing,” says the report.

Key Takeaways

The 13th edition of the Forum’s report, published in collaboration with Accenture, draws on insights from the Energy Transition Index (ETI). This year, the ETI used an updated framework reflecting emerging shifts in the global energy landscape to benchmark 120 countries in two areas: the performance of their energy systems in the dimensions of equity, energy security and environmental sustainability; and the readiness of the enabling environment for energy transition. This edition also evaluated countries’ “transition momentum” for the first time to highlight the urgency of consistent progress.

Here are some of the key takeaways from the report:

*Thanks to increasing volumes of clean energy investments, improving regulatory frameworks, technological innovations, and urgency to address the climate crisis, some long-term trends of global energy transition are positive. Over the past decade, 95% of countries have improved their total ETI score, with improvements more pronounced for countries that consume a large amount of energy, including China, India, Republic of Korea and Indonesia. But ETI scores declined for approximately 50% of the countries in the past year, which disproportionately impacted vulnerable consumers, small businesses and developing economies.

*Sweden (1), Denmark (2) and Norway (3) lead the ETI 2023 rankings and have been the top three countries each year for the past decade. Despite their diverse energy system structures, they share common attributes, such as high levels of political commitment and stable regulatory frameworks, investments in research and development, increased renewable energy deployment and carbon pricing schemes to incentivize investments in low-carbon solutions.

*France (7) is the only G20 country in the top 10, followed closely by Germany (11), the US (12), and the UK (13). Strong performance by the world’s largest economies, supported by the rapid development of renewable energy infrastructure and rising levels of investments in clean energy, is a signal of progress on the energy transition. Exposure to gas price volatilities is a risk factor to the inclusiveness of the energy transition, as demonstrated by the recent energy crisis and its fiscal and monetary implications, especially for European countries.

*Brazil (14) and China (17) are the major emerging economies to appear in the top 20. Due to abundant hydroelectricity capacity and leadership in biofuels, Brazil scored high on energy security and environmental sustainability, accounting for 7% of renewable energy production worldwide. China leads on renewable energy investments and capacity development, supported by mature domestic supply chains, and in the incubation of industries such as electric vehicles and energy storage.

*The long-term goals of the energy transition require sustained momentum in the wake of the current near-term volatilities. India (67) and Singapore (70) are the only major economies showing true momentum by advancing sustainability, energy security and equity in a balanced way. For example, despite continued economic growth, India has successfully reduced the energy intensity of its economy and the carbon intensity of its energy mix, while achieving universal energy access and effectively managing affordability of electricity.

*Looking at each facet of energy system performance, fuel-exporting nations – Oman (90), Canada (19), Saudi Arabia (57) and Qatar (59) – scored among the highest in equity and inclusiveness, providing affordable energy for households and industries and leveraging the energy sector to empower economic growth. Notably, the US, Sweden, and Israel (28) also score high on this dimension, largely due to cost-reflective energy prices and leadership on trade in low-carbon technology products.

*Advanced economies – the US, Australia (24) and Estonia (10) – scored highest in energy security, measuring the resilience and reliability of supply. A highly diversified energy mix, low dependence on fuel imports and limited interruptions in energy supply were contributing factors. Notably, they were closely followed by an emerging economy, Malaysia (35).

*The report revealed that many countries – amounting to over 90% of global emissions – are prioritizing sustainability, focusing on policies and programmes that promote energy conservation, renewable technologies and innovation in energy storage and grid modernization. Latin America led the way, with low levels of carbon intensity in energy supply, low per capita emissions and a high share of clean energy in final demand. Paraguay (34), Costa Rica (25) and Uruguay (23) in particular reaped the advantages of their abundant hydroelectric potential.

*When it comes to progress on energy transition, the gap between advanced economies and emerging and developing countries in Asia, Central and Eastern Europe and Sub-Saharan Africa has gradually narrowed over the past decade. As advanced economies and large emerging economies such as China and India push the boundaries of energy transition, propelled by ambitious industrial policy packages, progress in clean electrification, technology-intensive solutions for the decarbonization of heavy industries and advanced nuclear, there is a risk of that gap widening again.

The Need For Public-Private Collaboration

Virtually all technologies needed by 2030 already exist to achieve the Net Zero energy system by 2050, says Kolaczkowski. And advanced energy solutions are being deployed at accelerating rate and scale. However, this is still not fast and big enough from the energy system perspective. “The challenge is that we need to achieve in years what took wind and solar decades,” he says.“This will require systemic approaches guided by policy and innovators, large energy producers and users, and investors to form partnerships and play their part.

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Google DeepMind Unveils Next Generation Of AI Drug Discovery Model

Google DeepMind has released a new version of AlphaFold, putting the artificial intelligence software on a path to further accelerate and improve the success of drug discovery by helping understand how to approach new disease targets and developing novel ways to pursue existing ones that were previously out of reach.

In a paper published in Nature, GoogleDeepMind introduced AlphaFold 3, a model it said “can predict the structure and interactions of all life’s molecules with unprecedented accuracy.”

Given an input list of molecules, AlphaFold 3 generates their joint 3D structure, revealing how they all fit together, according to a blog posting by DeepMind spinout Isomorphic Labsh , a unit of Google parent company Alphabet created three years ago to commercialize DeepMind’s AI for drug discovery. AlphaFold 3 models large biomolecules such as proteins, DNA, and RNA, as well as small molecules, also known as ligands. What’s more, AlphaFold 3 can model chemical modifications to these molecules which control the healthy functioning of cells, that when disrupted can lead to disease.

AlphaFold 3’s predictions of molecular interactions “surpass the accuracy of all existing systems,” says the blog posting. “As a single model that computes entire molecular complexes in a holistic way, it’s uniquely able to unify scientific insights.”

The new tool is 50% more accurate than the best traditional methods on the PoseBusters benchmark, without needing the input of any structural information, making AlphaFold 3 the first AI system to surpass physics-based tools for biomolecular structure prediction, says the Isomorphic Labs blog posting.

“Using AlphaFold 3 in combination with a complementary suite of in-house AI models,” says the blog posting,“we are working on drug design for internal projects as well as with pharmaceutical partners.”

The AI system has the potential to revolutionize medicine and create “enormous commercial value,” for DeepMind spinout Isomorphic Labs, Demis Hassabis, the chief executive officer of both subsidiaries, said in an interview with Bloomberg Television. “I hope to do both with Isomorphic: build a multi-hundred billion dollar business — I think it has that potential — as well as be incredibly beneficial for society and humanity.’’

DeepMind first released AlphaFold in 2018, with advances in decoding the shape of proteins, a scientific problem often compared to mapping the human genome. Now in its third iteration, AlphaFold’s ability to model a range of molecular structures, including DNA and RNA, and predict how they interact with one another open up fresh opportunities for researchers to speedily identify potential new drug molecules, Max Jaderberg, Isomorphic Labs’ chief AI officer, told the Financial Times.

Isomorphic Labs has partnerships with pharmaceutical companies Eli Lilly and Novartis. “That allows our scientists, our drug designers, to create and test hypotheses at the atomic level, and then within seconds produce highly accurate structure predictions with AlphaFold 3,” Jaderberg said. “This is compared to the months or even years it might take to do this experimentally.”

Within a few years at most it will become a norm in drug discovery to see medicines completely generated by AI, according to a CNBC article.

Exscientia , a pharmatech company positioning itself at the interface of advanced AI application and complex drug discovery, was among the first to have an AI-designed molecule enter clinical trials.“It’s not just about using generative AI to help us to precision design an exact molecule,” Exscientia’s Andrew Hopkins told Nature in a 2023 interview“but also actually helping us precision design which patients are responders and non-responders.”

At the time the 2023 Nature article was written the company had 18 AI-designed drugs in its pipeline, including drugs for COVID-19, tuberculosis, malaria, and hypophosphatasia — a rare, inherited disorder that affects bones and teeth.

While AI has helped companies more quickly identify drug targets and discover new molecules to hit them, clinical trial results for AI-generated drugs developed by other companies, such as Sumitomo Pharma and BenevolentAI, have fallen short in clinical trials.

IN OTHER NEWS THIS WEEK

ARTIFICIAL INTELLIGENCE

Four Startups Lead China’s Race To Match OpenAI’s ChatGPT

Four Chinese generative artificial intelligence start-ups have been valued at between $1.2 billion and $2.5 billion in the past three months, leading a pack of more than 260 companies vying to emulate the success of U.S. rivals such as OpenAI and Anthropic. The newly minted unicorns — Zhipu AI, Moonshot AI, MiniMax and 01.ai — have gained significant backing from a largely domestic pool of investors and are fighting to hire the best talent to develop the most popular AI products.

QUANTUM COMPUTING

Australia’s Deal With U.S. Startup Signals New Hope For Building Commercially Viable Quantum Computer



The government of Australia and the state of Queensland this week committed $620 million between them to back the construction of a full-scale quantum computer near Brisbane by U.S. start-up PsiQuantum. The deal was just the latest sign that a decades-old dream of a new form of computing that takes advantage of the unusual properties of quantum mechanics may finally be coming to fruition. The system in Australia will be “the first machine that crosses over the threshold into [being a] really useful computer — the first quantum system in the world that will be commercially useful”, claimed Pete Shadbolt, PsiQuantum’s chief scientific officer.

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How AI Can Help Companies Anticipate The Future

Foresight, a set of approaches that help explore, imagine and anticipate the future in an open but structured way, can help identify and explore challenges and opportunities emerging from multiple signals and drivers of change shaping the future. It is also critical to inform decisions and act as a trigger for developing strategic options in a context full of unknowns. Indeed, a peer reviewed academic study found that firms that practice foresight had a 33% higher profitability and a 200% higher market capitalization growth when compared with the sample average.

Yet research also shows that 75% of organizations are not prepared for the pace of change in and around their industry. Many organizations wind up asking themselves why they backed trends that were not sustainable and did not anticipate events like the COVID pandemic and the war in Ukraine.

The signals of disruption may be there but for humans to pay attention to, and connect the dots between possible interactions and repercussions across hundreds of different topic areas can be overwhelming and easily lead to neglect or denial. Conducting this kind of systemic horizon scanning is next to impossible without the filtering ability, throughput, and analytical powers of AI, says Stephan Mergenthaler, the World Economic Forum’s head of strategic intelligence and a member of the Forum’s executive committee. That’s why the Forum is now applying advanced technologies to its strategic intelligence arm, which was first established in 2017.

The aim is to help corporates, who are increasingly feeling like they are the mercy of developments outside of their influence, “to not just understand and react but also have more agency to shape emerging trends,” says Olivier Woeffray, the Forum’s Practice Lead, Strategic Intelligence.

The Forum’s Strategic Intelligence arm aggregates high-quality content on 250+ global issues from hundreds of hand-picked think tanks, universities, research institutions and independent publishers (including The Innovator.) “This gives us a tremendous data set from which we can extrapolate trends that are shaping the world around us,” says Mergenthaler.

Transformational ideas often come from the intersections between two completely different fields or domains — such as 3D printing and biology combining to print human tissue. Underpinning knowledge with a platform which understands connections between topics and the interests and expertise of people and organizations is essential to identifying opportunities for first-mover strategic advantage.

Although still not perfect the Forum’s recent advancements in harnessing machine learning and natural language-understanding technology mean that it is able to better understand these trends at depth, whether they present opportunity or risk and how disruptive they could be, says Mergenthaler.

So far, the Forum says it is at around 70% accuracy within one standard deviation of the mean on forecasts up to one month in advance. As it adds more signals into the mix, it expects to not only improve the accuracy but also the foresight time frame, says Mergenthaler. Going forward it hopes to be able to use Generative AI to create even more accessible narrative summaries for those signals, he says.

“Corporate strategy cycles are getting shorter, and organizations need to be tweaking the strategy constantly, not just once a year,” he says. “In the past we could support them through periodic gatherings and cross-industry strategic conversations. We can now offer help whenever they need additional input and any member of their company – whether they be a top executive or a functional manager – can access all these signals.”

An example of how the Forum marries its unprecedented access to top level executives across industries with the benefits of machine learning and natural language processing is the way it handled a March workshop that brought together 250 Chief Strategy Officers from more than 20 industries, says Mergenthaler. The strategy officers were asked to conduct a cross-industry horizon scan to explore, prioritize and share perspectives on emerging signals that could potentially break through as inflection points over the next three to five years.

Among the five areas that surfaced was collaborative data sharing. (click here to access the map that was generated from the workshop)



For several decades, businesses across industries have relied on proprietary data to gain a competitive edge. But strategy officers participating in the workshop argued that there is a much greater value in sharing data.

Most companies are yet to realize the potential of shared data but research shows that data and analytics leaders who share data externally generate three times more measurable economic benefits than those who do not and that companies that embrace shared data stand to benefit from increased collaboration, improved efficiency, and the ability to tap into a broader pool of expertise.

The Forum took that insight back into its massive database of expert analysis, making it available at scale. As a result of the combined findings, The Forum has also elevated the topic of collaborative data in its industry and cross industry agendas, says Mergenthaler.

“We are using the Forum’s network – which is unique in terms of its breath and global perspective – to deliver strategic intelligence at a much greater scale,” he says. “Our aim is to connect that with structured methodology – such as combining the views of strategy officers in a workshop – with expert analysis in our database in real time to solidify both the conclusions and opportunities. We want to not just give a glimpse of the future but understanding of how industry systems and tech systems connect and how changes may translate into the strategic environment of industries.”

The Forum’s Strategic Intelligence has a million registered users. The content is publicly accessible. Forum Members can additionally access analytical features, such as trend summaries and briefings.

“Governments and companies are looking for new ways of practicing foresight,” says Mergenthaler. “What we want to do with this is to democratize access to best-in-class insights and thinking to anyone in any organization out there, which is in line with the Forum’s ambition to have a positive impact on the world.”

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The Dawn Of Solar Fuel

On June 20, as a way of marking the summer solstice, deep tech scale-up Synhelion, a spin-out of the Swiss Federal Institute of Technology (ETH Zurich), inaugurated what is being billed as the world’s first industrial solar fuel plant.

The plant, which is based in Jülich, Germany and is called Dawn, demonstrates how the entire technology chain, from concentrated sunlight to synthetic liquid fuel, can work on an industrial scale. It features a 20-meter-high solar tower and a mirror field (see the photo). The solar tower contains a solar receiver, a thermochemical reactor, and a thermal energy storage that the company says enables cost-efficient solar fuel production around the clock.

“The inauguration of Dawn marks the beginning of the era of solar fuels – a turning point for sustainable transportation,” Dr. Philipp Furler, CEO and Co-Founder, said in a statement. Solar fuels can directly replace fossil fuels and are fully compatible with the global existing fuel infrastructure – from storage and transportation to internal combustion engines and aircraft engines.

E-fuels, which are also known as Power-to-X fuels and are made using renewable or decarbonized electricity, could be a viable pathway to Net Zero and scale up rapidly by 2030, underpinned by a massive expansion of cheaper renewable electricity and anticipated cost reductions of electrolyzers, according to an International Energy Agency (IEA) report on the role of e-fuels in decarbonizing the transport sector.

Swiss International Airlines in an investor in Synhelion. The ETH spin-out has a network of international partners, which include Lufthansa Group, Zurich Airport, and Pilatus Aircraft.

Synhelion will begin building its first commercial plant in Spain in 2025. The plant will produce a total of around 1000 tons of fuel per year. Planned future plants will significantly exceed the size of the first two plants and thus offer a much higher production capacity. Synhelion aims to achieve an annual production volume of around one million tons of solar fuel within ten years.

The inauguration comes just a week after two other European deep tech companies, Germany’s Ineratec and France’s Soler Group announced that they are planning to build a production plant in southern France that can produce biocarbon and e-fuel from renewable raw materials. Their aim is to optimize the conversion of forestry residues (and other biomass materials) into high-quality biocarbon and syngas and then use that to make high-value e-fuels.

Interatec is also partnering with Synhelion. At the core of Synhelion’s technology is a proprietary process that converts solar heat into syngas. At plant Dawn, this syngas is then liquefied via the Fischer-Tropsch process by a unit Synhelion bought from Ineratec. This way, Synhelion says it can produce clean solar fuels that offer an economically viable, efficient, and scalable substitute for fossil fuels that is fully compatible with existing global fuel infrastructure.

The Dawn plant expects to produce several thousand liters of fuel per year. On-site, the plant will produce synthetic crude oil, known as syncrude. This intermediate product, which is particularly suitable to be transported, is then processed into certified fuels in a conventional oil refinery. This allows Synhelion to produce not only solar kerosene for aviation, but also solar gasoline and solar diesel for road transportation and shipping applications.

The ability to produce fuels from solar heat was first demonstrated in 2019 in a mini refinery on the roof of ETH Zurich. Since then, Synhelion’s growing team has worked to scale up Sun-to-Liquid technology and to apply it on an industrial scale.

The construction of DAWN was funded by Synhelion’s investors and the Energy Research Program of the German Federal Ministry of Economic Affairs and Climate Protection.

In transport, low-emission e-fuels provide a complementary solution to sustainable biofuels. Particularly in aviation, e-fuels benefit from their ability to use existing transport, storage, distribution infrastructure and end-use equipment.

E-fuels, also known as synthetic fuels, are liquid fuels produced from renewable energy. These fuels have similar chemical properties to fossil fuels and can be used in conventional combustion engines without the need for modifications. However, the production of e-fuels requires a lot of energy, which must be generated from renewable sources to have a positive environmental impact.

Low-emission e-fuels are currently expensive to produce, but their cost gap with fossil fuels could be significantly reduced by 2030, according to the IEA report.

IN OTHER NEWS THIS WEEK

CYBERSECURITY

Biden Bans U.S. Sales Of Kaspersky Software Over Russia Ties

The Biden administration on June 20 announced plans to bar the sale of antivirus software made by Russia’s Kaspersky Lab in the United States, with Commerce Secretary Gina Raimondo saying that Russia’s influence over the company poses a significant security risk.The company’s close ties to the Russian government were found to pose a critical risk, the person said, adding that the software’s privileged access to a computer’s systems could allow it to steal sensitive information from American computers, install malware or withhold critical updates.

ARTIFICIAL INTELLIGENCE


OpenAI Founder Announces Rival Startup

OpenAI’s co-founder Ilya Sutskever is starting a rival AI start-up focused on “building safe superintelligence”, just a month after he quit the AI company following an unsuccessful coup attempt against its chief executive Sam Altman. On Wednesday, Sutskever, one of the world’s most respected AI researchers, launched Safe Superintelligence (SSI) Inc, which is billing itself as “the world’s first straight-shot SSI lab, with one goal and one product: a safe superintelligence”, according to a statement published on X. Sutskever has co-founded the breakaway start-up in the US with former OpenAI employee Daniel Levy and AI investor and entrepreneur Daniel Gross, who worked as a partner at Y Combinator, the Silicon Valley start-up incubator that Altman used to run.

HEALTH

OpenAI Expands HealthCare Push



OpenAI is working with startup Color Health to expand the use of artificial intelligence in healthcare by applying its AI models to cancer screening and treatment.Color Health, which was founded as a genetic testing company in 2013, has developed an AI assistant or “copilot” using OpenAI’s GPT-4o model. The copilot helps doctors create cancer screening plans, as well as pretreatment plans for people who have been diagnosed with cancer.

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This Week In AI: A Tale of Power, Profit, Politics And Purpose

This week’s news in AI, which revolved around the fate of OpenAI and its chief executive, is a tale of power, profit, politics and purpose.

Open AI began as a nonprofit research lab because its founders didn’t think artificial intelligence should be pioneered by commercial firms. It needed to be developed by an organization, as Open AI’s charter puts it, “acting in the best interests of humanity.” It experimented with having a not-for-profit board, responsible for ensuring the safe development of AI, overseeing a for-profit commercial business. This uneasy relationship blew up over the last week when the board fired chief executive and co-founder Sam Altman.

Microsoft, which has invested $13 billion in OpenAI, called for the governance structure to change and offered Altman and OpenAI President Greg Brockman the chance to start a new AI-research group there. The majority of OpenAI’s staff threatened to resign. Altman returned to OpenAI. The organization’s board of directors is being overhauled: academics and researchers are being replaced by new directors who have extensive backgrounds in business and tech.

The full story behind the drama has yet to be unveiled but begs the question: “Can one organization, or one person, maintain the brain of a scientist, the drive of a capitalist and the cautious heart of a regulatory agency?” as New York Times columnist David Brooks succinctly put it in a column entitled “The Fight For The Soul of AI.” Or, as journalist Charlie Warzel wrote in The Atlantic, will the money always win out?

OpenAI’s internal struggle is not just about ensuring AI safety although that, too, is a concern. It is about purpose. Will AI be harnessed to solve some of the world’s biggest problems, such as combating climate change and eradicating disease? Or will the world allow a handful of monopolists to cause harms to society while building the equivalent of a new global pharma industry that controls access to breakthroughs and puts profits first?

Lost in the headlines about Sam Altman’s firing and rehiring was the November release of a chilling report from Open Markets Institute that focuses on the dangers of allowing AI to be controlled by monopolies. The report, “AI in the Public Interest: Confronting the Monopoly Threat is not focused on the threat of artificial general intelligence (AGI) or killer drones. It outlines how just a handful of Big Tech companies – by exploiting existing monopoly power and aggressively co-opting other actors – have already positioned themselves to control the future of artificial intelligence and magnify many of the worst problems of the digital age. These problems include the spread of misinformation and distortion of political debate, the decline of news and journalism, the undermining of compensation for creative work, exploitation of workers and consumers, monopolistic abuse of smaller businesses and challengers, amplified surveillance advertising and online addiction, and the threat to resilience and security from extreme concentration.

The report details how tech giants broadly control the direction, speed, and nature of innovation in many, if not most, of the key technologies in the Internet tech stack. In addition to cloud capacity, computing technologies, and data, this includes chokeholds over computer and mobile phone operating systems, the standards and governance of the World Wide Web, and increasingly even the design and commercialization of semiconductors. These existing concentrations of power, in combination with their emerging dominance in AI, give this same handful of corporations the ability to determine when, how, and in whose interests AI is developed and rolled out. “Their control over AI’s ‘upstream’ infrastructure means they can easily identify any serious potential rival in its earliest stages and then move swiftly to crush, sidetrack, co-opt, or simply acquire the upstart,” says the report. “In short, these corporations are already shaping the entire ‘downstream’ ecosystem to serve their own short-term private interests in ways that will in many instances prevent other companies and individuals from using AI to solve urgent challenges and improve people’s lives.”

Indeed, Fortune magazine writer Jeremy Kahn observed on X (formerly known as Twitter) that “what OpenAI, Anthropic and DeepMind have all tried to do is raise billions and tap vast GPU resources of tech giants without having the resulting tech de facto controlled by them. I’m arguing the OpenAI fracas shows that might be impossible.”

The present efforts by gatekeepers such as Microsoft, Amazon, Google and Meta to dominate AI are made possible by the enormous financial and political advantages they have built up by exploiting their monopoly power, says the Open Markets Institute report. Not only do they already dominate almost all key links in the AI services and technology supply chains, they also are shaping the policy debate on whether and how to regulate AI in ways that protect and promote their existing interests. “This is largely thanks to their vast lobbying and influence systems, as well as to a carefully curated public narrative that their technical expertise is free from conflicts of interest,” says the report.

The report urges the use of existing laws – including anti-trust and competition- to help curb the power of the tech giants. There is little agreement amongst governments or industry observers about the best way forward. On Oct. 30, the Biden administration released a major executive order “On the Safe, Secure and Trustworthy Development and Use of Artificial Intelligence.” Britain announced that it would not regulate A.I. at all in the short term, preferring instead to maintain a “pro-innovation approach.” The European Union’s proposed AI Act may stall on concerns from France, Germany and Italy, all of whom worry that the scrutiny of more powerful systems will simply mean those systems are developed elsewhere.

But regulation alone will not ensure that AI is used for the benefit of humanity.

To alleviate the risks of over reliance on private / corporate open source deep innovation in AI, “governments must invest, in coordination with each other, in AI research to a compound output level that’s on par with deep innovation and research production of private actors taken as a whole and commit to open sourcing this output,” says serial AI startup founder Benoit Bergeret, Executive Director, ESSEC Metalab for Data, Technology and Society, Co-founder of Hub France AI and a member of the OECD Working Group on AI Futures.

“Private funding is good, but it needs to play in a world where there is significant competition from publicly funded teams,” Bergeret said in an interview with The Innovator. But, he cautioned, “research from publicly funded teams should also be actionable, which will be a true revolution in a world where traditionally, publicly funded research never gave a damn about transferring to the economy at scale.”

The role of government is crucial because in an open source innovation dominated AI world, “work disruption will occur quickly and will be hard to anticipate, potentially destabilizing workers, all the way to possibly impacting our democracies,” says Bergeret. “Governments must actively monitor and quantify these workforce impacts to inform and incentivize corporations, and make jobs that are immune to AI disruption more appealing economically and socially, to provide an acceptable professional new path to those impacted.”

Public money should be “invested ASAP in open research, as I said in my public address at OECD last week, to an extent that matches the research output levels achieved collectively by private AI research (OpenAI, Meta, Anthropic and everybody else),” says Bergeret. “The rationale for this in is the steering of research towards a for-profit agenda that I think should be countered. It would be a pity to see AI become the next Big Pharma. Public funding of AI research should not just be commensurate to private funding (at least in research productivity), it should also be open sourced and synchronized across borders. No single nation outside of China can do it alone.”

Accelerating science could be the most economically and socially valuable use for artificial intelligence, Alistair Nolan, a senior policy analyst at the OECD wrote in a blog post this week. It could lead to benefits that private AI research isn’t interested in other than in a siloed fashion, possibly facilitating large scale funding of AI research, says Bergeret.

Publicly funding a larger research project. would be a good thing, but funding smaller, agile, precise teams, passionate about cracking certain angles, should also be encouraged, Bergeret argues. “If today’s methods require vast amounts to train (and scale), I want to think that current foundation models are just a branch of AI technology, and that alternatives leading to much more efficient learning can be developed,” he says. “We already see such advances from small groups, with edge learning making significant strides.”

There is no doubt that publicly funded purpose driven projects that purport to be a counterweight to the tech giants’ monopolies could attract some of the world’s best and brightest AI talent. The question is whether government projects that are likely to be driven by technocrats and burdened by red tape will be able to keep them.

IN OTHER NEWS THIS WEEK

Artificial Intelligence

Businesses, Tech Groups, Warn EU On Over-Regulating AI Foundational Models

Businesses and tech groups on November 23 warned the European Union against over-regulating artificial intelligence systems known as foundation models in upcoming AI rules as this could kill nascent start-ups or drive them out of the region.The plea came as EU countries and EU lawmakers head into the final stretch of negotiations on rules that could set the benchmark for other countries.One of the biggest bones of contention is foundation models, such as OpenAI’s ChatGPT, which are AI systems that are trained on large sets of data, with the ability to learn from new data to perform a variety of tasks. “For Europe to become a global digital powerhouse, we need companies that can lead on AI innovation also using foundation models and GPAI [General Purpose Artificial Intelligence],” DigitalEurope, whose members include Airbus, Apple, Ericsson, Google, LSE and SAP, said in a letter. Thirty-two European digital associations also signed the letter. The signatories, who said just 3% of the world’s AI unicorns come from the European Union, backed a joint proposal by France, Germany and Italy to limit the scope of AI rules for foundation models to transparency requirements.

OpenAI, Microsoft Hit With New Author Copyright Lawsuit

OpenAI and Microsoft were sued November 21 over claims that they misused the work of nonfiction authors to train the artificial intelligence models that underlie services like OpenAI’s chatbot ChatGPT.OpenAI copied tens of thousands of nonfiction books without permission to teach its large language models to respond to human text prompts, said author and Hollywood Reporter editor Julian Sancton, who is leading the proposed class action filed in Manhattan federal court. The lawsuit is one of several that have been brought by groups of copyright owners, including authors John Grisham, George R.R. Martin and Jonathan Franzen, against OpenAI and other tech companies over the alleged misuse of their work to train AI systems. The companies have denied the allegations. Sancton’s complaint is the first author lawsuit against OpenAI to also name Microsoft as a defendant. The company has invested billions of dollars in the artificial intelligence startup and integrated OpenAI’s systems into its products.

AI ‘hit squad’ Set Up To Cut Size of UK Civil Service and Boost Productivity

An artificial intelligence “hit squad” unit will be set up at the heart of Whitehall with a remit to shrink the size of the UK civil service and bolster public sector productivity, reports The Financial Times. Deputy Prime Minister Oliver Dowden plans to form a task force of 30 “high-end, technically capable” experts in AI and data engineering with an annual budget of about £5 million, to begin the process of transforming public services.

CYBERSECURITY

EU Mulls Wider Scope For Cybersecurity Certification Scheme



Reuters reported that The European Union is considering broadening the scope of proposed cybersecurity labelling rules that would affect not just Amazon, Alphabet’s Google and Microsoft but also banks and airlines, according to the latest draft of the rules.The EU move to set up such a system comes as Big Tech looks to the government cloud market to drive growth in the coming years while a potential boom in artificial intelligence after the viral success of OpenAI’s ChatGPT could also boost demand for cloud services. The latest proposal from EU cybersecurity agency ENISA concerns an EU certification scheme which vouches for the cybersecurity of cloud services and determines how governments and companies in the bloc select a vendor for their business.The document retains key provisions contained in earlier drafts such as a requirement that U.S. tech giants set up a joint venture with an EU-based company to qualify for the EU cybersecurity label.

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Mining The Past To Create A Future With Data And AI

Dorfner, a family-owned Bavarian business that mines and refines industrial minerals, is using data and AI to tie its past to its future and transform its business model.

The company, which was founded in 1895 and owns one of the most significant kaolin and silica sand deposits in Germany (see the photo), makes functional fillers for paints, composite materials and construction materials. Today the family-owned holding company has subsidiaries in Poland and in the U.S. and a joint venture in India.

Like many of Europe’s SMEs, Dorfner found it itself facing several challenges, including succession issues and the fact that there is very little room for growth in its core businesses. Mirko Mondan, a serial entrepreneur, was recruited from the outside by the family two years ago as acting CEO with a mission to strengthen the core while finding new sources of business, paving the way for the next generation of the family to eventually take over.

As part of a new corporate strategy, the company has started using cutting-edge tech to transform itself from a company offering a sole product and raw material to one that additionally offers services tied to its core business that help its clients solve supply chain shortages and become greener. As a first step it is applying AI to the fillers in paint to create alternative formulations and make them more sustainable.

Dorfner’s journey offers valuable insights into how Europe’s traditional businesses can build effective innovation strategies, leapfrog into the digital age, and make climate-friendly products.

Forging An Innovation Strategy

The first item on Mondan’s agenda was to forge an innovation strategy. The strategy he settled on is based on two pillars, sustaining innovations at the core and introducing radical innovations outside of current markets. While the ideation process is important it is not sufficient. Access to a network and to talent is crucial to innovating outside the core business, says Mondan. “When you are from an old economy business you can’t just transform the whole organization and hire the right tech people,” he says. You need to tap into a network.”

During a ride in a dump truck at Dorfner’s mining facility, one of Mondan’s friends, who runs a family-owned business, shared his experience working with UnternehmerTUM, the Technical University of Munich’s Center for Innovation and Business Creation, which was set up 20-years-ago as a not-for-profit limited company with a focus on building a bridge between startups and established companies. UnternehmerTUM’s Business Creators program ticked all the right boxes, says Mondan, as it is specifically geared to helping SMES widen their traditional business models and help them use open innovation to think outside the box and move from the why to the how.

Dorfner did not just sign up a few key executives. It chose people from across its business. “I picked different functions and areas, people I thought would become good change agents of the transformation, and then instructed each one of them to go out and tell five people in the company what they learned along the journey,” says Mondan. “That is how we cascaded it down.”

In order to meet the planned growth path of the company, new sources of value had to be developed to extend the existing business and/or tap totally new sources of revenues. “We were thinking too narrowly,” says Mondan. “We needed to unlearn things and open our minds.” The company’s definition of innovation was rebuilt. Rather than just focusing on new products the company started building entirely new business models or process innovations.

During the joint project Dorfner employees were guided to think beyond their traditional business fields, with the help of a structured process workshops at UnternehmerTUM. Dorfner employees separated into groups and focused on the company’s strengths to understand the past and then tried to make a link to new fields and focus on “how we, a mid-sized German company in a traditional field, could make use of our data to get ahead of our competitors and create new services,” says Mondan.

While Dorfner was engaged in this process its big customers started approaching the company because hundreds of the raw chemicals they need to make their products were not available due to supply chain issues. Customers wanted to know if Dorfner could create alternative formulations.

It was an “aha” moment for Dorfner. Like many traditional companies much of its industry knowledge was stored either in the heads of their long-term employees or in spread sheets. During the workshop the idea that surfaced that its data about chemical formulations could be gathered and organized in a database and AI applied to that data to help with reformulations that would serve as alternatives or be more sustainable.

The company thought it would have to build its own AI software platform, but it found a Silicon Valley company that had already built an AI platform for the materials and chemicals industry.

It took about six months for the company to get the right data sets in place.“ The crucial lever is identifying which value you want to deliver,” says Mondan. “Then you know which data you need.”

“When our data was in Excel spreadsheets no one was using it,” he says. “Now we make use of our treasure. We took data from the last 25 years and made it digital. Over the next five years 30% of our people will retire so this is a way of ensuring we don’t lose the solid base from our past.”

In coatings alone Dorfner has 30,000 data points on materials. “When a request for a filler formulation is received Dorfner will use the AI to run a simulation. By bringing it into a platform and applying AI we can now offer a new formulation service to all our clients around the globe,” says Mondan. If a client uses a small fraction of a material in its formulations and that material is no longer available Dorfner can run a simulation, come up with the five best hits, test them in its lab and propose a solution within a matter of days, he says. “We are experts in functional fillers. AI helps speed up our R &D and promises to give us category leadership 5-10 years from now.”

The new strategy is also expected to allow Dorfner and its clients’ products to become greener. “We are currently shipping materials all over the globe,” says Mondan. “My dream is to tell customers that we can sell them a new formula for the functional filler field and point out the three local materials they can use. This way we stay in the game by offering the best formula, with the best quality, at the lowest cost, with the lowest environmental footprint.”

Dorfner, which uses the minerals it mines to produce a critical component in paints, is starting by offering its clients AI-based recipes for functional fillers in paints that are cheaper and more sustainable. It is only one of nine innovative business or service models that Dorfner identified during its nine-month program with UTUM.

Thanks to the workshops and outside tech help supplied by UnternehmerTUM and the Silicon Valley tech company “we now have the tools to turn one promising project into action,” says Mondan. “It is a relief for the organization to know that we can think big and create a future for Dorfner that has its origin in our core business. “

BELIEVING IN THE OUTCOME

Dorfner’s journey is an example of how traditional family-owned businesses can successfully use digital technologies to remain relevant and competitive, says Tim Lüken, Senior Manager of UnternehmerTUM’s Business Creator.

“Often the problem for SMES is they have a bias about where to go,” says Lüken. The goal of UnternehmerTUM’s program is to enable SMEs to think about the future in a structured manner, come up with new ideas and believe in the outcomes, he says. To make it work top management needs to do what Mondan did: “become a spokesperson for the outcome even before the project begins, by mobilizing every employee from the beginning, and inviting everyone interested to join,” he says.

Mondan says he was surprised by how motivated employees are. “Once they understand what we are trying to do their reaction is ‘I’m in. I want to learn how to do this,” he says. “They have understood this platform will be crucial for us.”



As a next step Dorfner and UnternehmerTUM say they will continue their journey and jointly create a new business model focused on sustainability.


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Large Corporates Embrace Generative AI

The ability of generative AI to imitate music artists like Drake and Grimes grabbed headlines this week as did news that large corporates like PricewaterhouseCoopers (PwC) and Walmart are putting the technology to use for more pragmatic purposes – tax preparation and haggling with suppliers – an indication of how quickly the technology is being embraced by big business.

Indeed, PwC said it plans to invest $1 billion in generative artificial intelligence technology in its U.S. operations over the next three years, working with Microsoft. and ChatGPT-maker OpenAI to automate aspects of its tax, audit and consulting services, according to The Wall Street Journal.

The company will pay to access OpenAI’s GPT-4 language model, the underlying software that drives ChatGPT, to build and run apps in Microsoft’s Azure cloud. While ChatGPT is a free online tool, OpenAI charges developers to access its language model and create their own software tools.

Once its models are fully trained and tested, PwC said the technology will be used to take on co-pilot functions, such as quickly writing reports and preparing compliance documents, analyze and evaluate business strategies, identify inefficiencies in operations or create marketing materials and sales campaigns, among many other applications.

“This is about using generative AI to run the company in a more efficient way,” Mohamed Kande, PwC’s vice chair and co-leader of U.S. consulting solutions and global advisory leader, told the Wall Street Journal. “Embracing this technology is critical.”

Kande said that for PwC, the goal isn’t only to develop and embed generative AI into its own technology stack and client-services platforms, but also to advise other companies on how best to use generative AI.

Other large accounting firms, including KPMG and Ernst & Young, are also investing in generative AI and TurboTax owner Intuit is building its own generative AI language model for financial management, trained on years of interactions with its business customers, the company said.

Accounting, tax preparation, auditing and other financial services are ripe areas for generative AI, as are procurement and legal services. (see The Innovator’s latest Startup Of The Week article about Zero Systems, one of many young companies cropping up to provide the picks and shovels for the ChatGPT gold rush.)

Bloomberg reported this week on how Walmart has partnered with Microsoft, OpenAI and Pactum AI to introduce conversational AI tools across its business units, including procurement. When a vendor says it wants to charge more for an item, Pactum’s system compares the request with historical trends, what competitors are estimated to pay and even fluctuations in key commodities that go into making the item, among other factors. It then tells Walmart the highest price it thinks its buyers should accept, a figure that a human procurement officer can modify if needed.

Meanwhile, law firms are lining up to use the technology, according to Reuters.

DLA Piper is one of several large firms that has said it will use a new AI tool from legal research company Casetext, one of a growing number of established legal technology companies that have rushed to roll out generative AI-powered tools.

“This is an arms race, and you don’t want to be the last law firm with these tools,” Daniel Tobey, chair of DLA Piper’s AI practice, told Reuters. “It’s very easy to become a dinosaur these days.”

Casetext in March released its AI legal assistant product, CoCounsel, which uses GPT-4 to speed up tasks like legal research, contract analysis and document review.

Law firms Orrick, Herrington & Sutcliffe, which has about 1,150 lawyers, and Fisher Phillips, with more than 500 lawyers, are also using CoCounsel.

Some firms are developing capabilities in-house. Holland & Knight is creating an AI tool that it hopes will help lawyers review and modify credit agreements, according to Reuters, while Baker McKenzie has been baking large language models into existing services on a client-by-client “pilot” basis.

Large corporates are also increasingly using chatbots powered by generative AI for customer service, with encouraging results, according to an academic paper entitled Generative AI At Work, published on April 25 by Stanford University’s Eric Brynjolfsson and MIT’s Danielle Li and Lindsey Raymond. The paper studied the staggered introduction of a generative AI-based conversational assistant using data from 5,179 customer support agents and found that access to the tool increases productivity, as measured by issues resolved per hour, by 14 % on average, with the greatest impact on novice and low-skilled workers. The paper provides suggestive evidence that the AI model disseminates the potentially tacit knowledge of more able workers and helps newer workers and says AI assistance improves customer sentiment, reduces requests for managerial intervention, and improves employee retention.

Despite ethical and other concerns businesses appear eager to take advantage of generative AI’s potential. In a survey of about 500 corporate IT decision makers conducted by market research firm Enterprise Technology Research, 53% said they planned to evaluate, use or allocate further resources to OpenAI’s ChatGPT technology—a record for any single technology provider, ETR’s Chief Strategist Erik Bradley told the Journal. Consulting and business-services firms, along with educational institutions, were the leading sectors in plans to evaluate and use generative AI and large language models, according to the survey.

Eric Boyd, corporate vice president of Microsoft’s AI platform, told the Journal that more than 1,000 organizations—including startups and multinational corporations—are now using OpenAI tools in Microsoft’s cloud in areas like customer support, conversational AI, summarization, writing assistance and customization by “gaining insights from data using search, data extraction and classification,” he said.

Projected spending across all sectors in the global generative AI market by the end of this year, growing at a compound annual rate of 32% to $98.1 billion by 2026, according to Pitchbook Data, a market analytics firm.

IN OTHER NEWS THIS WEEK:

ARTIFICIAL INTELLIGENCE

Elon Musk Plans AI Startup To Rival OpenAi

Elon Musk is developing plans to launch a new artificial intelligence start-up to compete with ChatGPT-maker OpenAI, as the billionaire seeks to join Silicon Valley’s race to build generative AI systems. The Tesla and Twitter chief is assembling a team of artificial intelligence researchers and engineers, said people familiar with the tech entrepreneur’s plans.

The Rapid Rise Of AI Threatens To Overturn U.S. Patent system

When members of the US supreme court refused this week to hear a groundbreaking case that sought to have an artificial intelligence system named as the inventor on a patent, it appeared to lay to rest a controversial idea that could have transformed the intellectual property field. The justices’ decision, in the case of Thaler vs Vidal, leaves in place two lower court rulings that only “natural persons” can be awarded patents. The decision dealt a blow to claims that intelligent machines are already matching human creativity in important areas of the economy and deserve similar protections for their ideas. But the Financial Times reports that while the court’s decision blocked a potentially radical extension of patent rights, it has done nothing to calm growing worries that AI is threatening to upend other aspects of intellectual property law. The US Patent and Trademark Office opened hearings on the issue this week, drawing warnings that AI-fuelled inventions might stretch existing understandings of how the patent system works and lead to a barrage of litigation.

Europe To ChatGPT: Disclose Your Sources

Makers of artificial-intelligence tools such as ChatGPT would be required to disclose copyright material used in building their systems, according to a new draft of European Union legislation slated to be the West’s first comprehensive set of rules governing the rollout of AI, reports the Wall Street Journal. Such an obligation would give publishers and content creators a new weapon to seek a share of profits when their works are used as source material for AI-generated content by tools like ChatGPT. The issue has been one of the thorniest commercial questions to emerge amid a frenzy of AI-powered tools being launched or tested by Microsoft and Google.

U.S. Department Of Homeland Security To Study How AI Might Be Used to Protect The Country

CNBC reported this week that the U.S. Department of Homeland Security will establish a new task force to examine how artificial intelligence technology can be used to protect the country in a variety of ways. DHS Secretary Alejandro Mayorkas said the technology could potentially be used to better screen for imports of goods produced by forced labor as well as for shipments of fentanyl.

FINANCIAL SERVICES

Russia’s VTB To Launch Digital Bank On Social Network

Russian state-owned bank VTB will launch a digital bank within the mobile messaging app of leading social network VKontakte, Russia’s answer to Facebook, as Moscow seeks technological solutions to disrupted banking transfers.Western providers Google Pay and Apple Pay restricted access to their services after Russia sent tens of thousands of troops into Ukraine in February 2022. That made operations with banks abroad particularly challenging as many bank cards stopped working overseas and Russia was disconnected from global payment systems.Meanwhile, the Bank of Russia has developed an alternative to SWIFT, the System for Transfer of Financial Messages (SPFS), and simplified the way banks can use its Faster Payments System (FPS) with foreign counterparts for cross-border transfers. On March 1, state communications regulator Roskomnadzor published a list of foreign messenger services, such as Telegram, WhatsApp, Discord and Microsoft Teams, that were banned for the provision of financial services.

FOOD AND BEVERAGE

Steakholder Foods 3D Bio-Prints The World’s First Cultivated Fish Fillet:

Israel’s Steakholder Foods said it has successfully 3D printed the world’s first whole cultivated fish fillet. The fillets were created via a partnership with Singaporean-based Umami Meats, which provided the grouper cells. Steakholder Foods customized the cells into bio-inks for 3D printing, using newly developed patent-pending technology that mimics the flaky texture of cooked fish. Once printed, the fillets are ready to be cooked and eaten. Steakiholder Foods and Umami Meats are developing additional seafood species including Japanese Eel, Yellowfin Tuna and Red Snapper.

ENERGY TRANSITION

EU Agrees To Decarbonize Air Travel With World’s Largest Green Fuels Mandate For Aviation

European Union negotiators secured a deal to decarbonize the air travel sector, seeking to slash heat-trapping emissions by stimulating the region’s green aviation fuel market.The agreement on the so-called ReFuelEU Aviation proposal followed late night talks on April 25 and was reached by the European Parliament and the Council. It must now be approved by EU countries to become law, which is typically a formality. The new rules are set to require aviation fuel suppliers to supply a minimum share of sustainable aviation fuels — or SAF — at EU airports, starting at 2% of overall fuel supplied by 2025. This will rise to 6% by the end of the decade, before climbing to 70% by 2050.

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The State Of XR

To understand the current state of Extended Reality (XR), an umbrella term to referring to augmented reality (AR), virtual reality (VR), and mixed reality (MR), look no further than your neighborhood Walmart.

The global retailer was a pioneer in introducing AR experiences in Roblox, a virtual world, but is now testing the tech on a more mainstream audience, because, it says, retail today goes beyond just online and in-store shopping, or even a combination of both.

In October Walmart revealed proprietary artificial intelligence, Generative AI, Augmented Reality (AR) and Immersive Commerce platforms it is leveraging to create hyper-personalized, convenient and engaging shopping experiences across its stores, Sam’s Clubs, apps and other virtual environments.

Its AR platform called Retina leverages AI, GenAI and automation to create tens of thousands of 3D assets, along with Immersive Commerce APIs. These technologies enable the company to bring the Walmart shopping experience into new virtual social environments like Roblox, unlock new revenue streams and be at the forefront of Adaptive Retail.

But, in a sign of the times, Retina also powers 10 AR experiences across Walmart U.S. and Sam’s Club that have seen a 10x increase in customer/member adoption, reducing rates of return and improved conversion rates. Looking ahead, Walmart says it plans to bring View in Your Home to Canada, Mexico and Chile via Retina and create more interactive experiences, like “hotspots,” an extension that enables customers/members to easily access production information while they are viewing an item in 3D. The company is also actively working on headset-based experiences to enable customers/members to visualize furniture in an inspirational setting.

Walmart’s announcement illustrates how XR is starting to become a part of consumers’ retail experience, says Andreea Danielescu, a technologist with 10 patents who until recently was the Director of the Future Technologies R&D group at Accenture Lab, which focuses on new emerging technologies that blend the physical and digital.

Walmart is not alone in experimenting with all types of immersive experiences.

Sephora and L’Oréal report that AR-enabled virtual try-ons result in 50% fewer returns, according to an article in Business Insider. And, according to other press reports, IKEA is experiencing a 2.3x higher conversion with an AR room visualizer, Amazon an 85% user confidence boost with virtual shoe try-ons, Shopify a 29% rise in customer satisfaction with personalized AR and h&m a 42% boost in add-to-cart rates with its virtual showroom.

These experiences are being enabled by the development of easy-to-use XR interfaces that help agencies develop campaigns for big brands, says Pedro Jardim. His company anitya offers just that: a low-code platform for building and sharing immersive 3D experiences.

Beyond retail and entertainment, applications for XR include corporate training and education, says Jardim.

There are convincing arguments for using the technology to train employees. Studies show that people retain less than 20% of knowledge after one week, using traditional methods, but immersive technology helps people to retain up to 80% of knowledge even after one year, says Jardim.

There is little wonder, then, that the education sector is evaluating the technology. One of anitya’s clients is servicing thousands of students and has over 1,000 lessons in biology, math and language subjects. It is currently transitioning this content to the anitya platform, Jardim says.

Why Now Could be the Time For XR’s Exponential Growth

Jardim, who gave a presentation at Web Summit in Lisbon on the state of XR with Diego Borgo, a Metaverse and Web3 advisor who helps Fortune 500 brands in the Metaverse and Web3 space, argues that the combination of XR with blockchain and AI is creating the right conditions for the technology to take off.

The hardware is coming. In September, Snap announced the fifth generation of its Spectacles product which can overlay digital graphics onto the physical world. The technology is only available to developers willing to pay $99 a month for a full year to build AR apps that can be used on the device.

Later in the month, Mark Zuckerberg, CEO of Meta, unveiled new lightweight AR glasses at the company’s annual conference. The prototype, dubbed Orion, is also capable of overlaying 2D and 3D content on the real world and can use AI to analyze use to provide wearers with proactive suggestions. Meta also announced its next generation of smart glasses, available in Ray-Ban frames with built-in camera, open-ear audio and social sharing. (These don’t use AR but are an example of what is to come).

Current VR and AR platforms that are used to power AR glasses have limitations, including their heavy nature, high battery consumption, processing challenges and high cost of production. Jardim says anitya’s platform has proven to be up to 333% more efficient than competitors like Unity’s when used with Lenovo’s virtual reality ThinkReality VRX headset and reduces battery usage by up to 50. Lenovo and anitya are collaborating to increase the number of applications in the Lenovo ThinkReality VRX glasses and onboard more agencies and creators to create content, he says.

Jardim believes that the introduction of anitya’s platform, combined with hardware and software advances over the past 12 months, could be the tipping point for XR.

Danielescu is more circumspect. Luxottica, the company behind Meta’s next generation of smart glasses, has been working on the technology for about ten years, she says. Other big tech companies, including Intel and Apple, have been working on XR hardware for many years. Despite best efforts and huge investments, there is still a long way to go before these devices go mainstream and become an integral part of people’s everyday lives, says Danielescu.

The widespread adoption of AR displays has been limited due to the bulky projection optics of their light engines and their inability to accurately portray three-dimensional depth cues for virtual content, among other factors. A May article in Nature indicates that researchers are making headway in solving some of these issues.

But there is no need for retailers to wait for expensive headsets to become less geeky, cheaper and more accurate, to start giving customers an AR experience, Danielescu says. “We can do this with what we have out there already.”

We will see more and more companies adding interactive elements into products, she predicts. An example of this would be a smart label on a wine bottle that uses near-field communication (NFC) on mobile phones to access a website about that wine, giving consumers much more information without adding packaging. An edible RFID sensor can be added to chocolate that allows consumers to scan it with their phone to enter a sweepstakes and win a ticket to an event.

Immersive experiences are destined to become more mainstream, she says, but it will happen gradually and at least for the short-term, more likely to be powered by phones than smart glasses or headsets.

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