The arms race to build the metaverse

Presented by Connected Commerce Council: How the next wave of technology is upending the global economy and its power structures

May 04, 2022 View in browser   By Derek Robertson Presented by Connected Commerce Council A Chinese microchip is seen through a microscope. | AP Photo/Ng Han Guan, File If the most optimistic predictions about the metaverse come true, it will be the result of a lot of good old-fashioned computing power. Consider the sheer scale of the technological demands that a metaverse would make: A theoretically limitless number of users, interacting with each other in real-time in a constantly evolving virtual space. Matthew Ball, a venture capitalist who started an fund of metaverse-related stocks, asserted in a widely-read blog post last year that it will require "the greatest ongoing computational requirements in human history." Intel VP Raja Koduri wrote in a December essay that it would need a "a 1,000-times increase in computational efficiency." That has real-world consequences. Even a modest version of the metaverse would entail a huge spike in demand for chips, for networking power and for advances in device manufacturing. It means the race to build a virtual world could be a major question of national competitiveness in the physical one. "The metaverse has a lot of economies of scale waiting to happen," said Pedro Domingos, professor emeritus of computer science and engineering at the University of Washington. "And every one of the big tech companies comes to it with different motivations and different DNA." Take the chip shortage , a previously distant-seeming concept that during the pandemic directly hit Americans' pocketbooks. Today's tech companies know that short of a mass conversion to Luddism, relying on Taiwanese manufacturers isn't going to cut it anymore when it comes to ginning up those "economies of scale." And building the metaverse is going to require a lot of concrete hardware: Meta has already built a massive AI supercomputer meant to process data at mind-boggling scale. Chip manufacturers Nvidia and AMD are in an arms race. (Networking is a hardware issue, too: The Wall Street Journal reported this week on Apple's plans to develop its own modem chips with an eye toward always-on augmented reality tech.) That heightened competition comes as chip manufacturing has become an issue of geopolitical import. Intel CEO Patrick Gelsinger has launched a crusade to reduce America's dependence on Taiwanese-manufactured chips against staggering odds, and companies like Samsung and Texas Instruments have also recently built up their U.S. manufacturing capacity. This is fully on Washington's radar: A bipartisan bill aimed at boosting America's tech competitiveness, nearing the end of its long journey to President Joe Biden's desk, contains $52 billion for U.S. semiconductor manufacturing. But even the most powerful hypothetical semiconductors might still not be enough to match the tech industry's wildest ambitions — meaning the metaverse could end up powering innovations that go beyond the limits of today's hardware wars. "Moore's law is not going to go on forever," Domingos told me. "The limits are not enough to realize something like a full-blown metaverse." He cited breakthroughs in optical computing, or quantum computing, as potential engines for metaverse development, or the building of new integrated circuits customized for the technology. There's an aspirational, 1960s-like quality to the idea that tomorrow's powerful supercomputers could transform our technological landscape, which makes it somewhat amusing that said technology is being developed with an eye toward what's essentially a global chat room. But consumer products tend to drive powerful, and sometimes unexpected, innovations: Think about the thirst for speedy, ubiquitous internet access that drove the 5G transition. Even the graphical engines that would create the metaverse are largely the product of the past few decades' heated race for supremacy among developers of video game hardware. The U.S. isn't just racing itself to the future, of course. Chinese tech companies like Tencent and ByteDance are racing to acquire the kinds of technologies that will power the metaverse, making the desire to surpass them one of the few things about which Republicans and Democrats agree (hence the House and Senate competitiveness bills). The metaverse might not be issue 1A in Washington, but it's exactly the kind of ambitious goal that powers the global competition for tech supremacy. A message from Connected Commerce Council: Small Biz gets a big boost from Tech. With digital tools - from online marketplaces to backend analytics - small businesses are able to find new customers and compete with big brands and national chains. Digitally-savvy small businesses are 20x better at acquiring new customers than their digitally skeptical counterparts. Find out how Tech empowers small businesses everywhere.  Learn more.   Quantum Leap A quantum computing chip made by IonQ, a startup based in Maryland that started trading on the New York Stock Exchange in October 2021. | Walker Steere / IonQ Washington's micro-obsession with quantum computing intensifies: The Biden administration is pushing a handful of new initiatives to boost the technology. First is an executive order that will place the National Quantum Initiative, an office that advises quantum research and development, directly under the White House's auspices — and therefore bring it closer to actual politics, a sign of the administration's enthusiasm about boosting global tech competitiveness. Second, and more concretely, the president is signing an official memo that among other things will order NIST to establish a project studying the landscape of cryptography in a world of quantum computing. Cryptographers believe a sufficiently powerful quantum computer could crack basically any existing code, making the future tech a major national security issue. Which poses an interesting question: How do you safeguard against a technology that doesn't actually exist yet? "You don't need a quantum computer to make quantum-resistant cryptography," said a senior administration official during a Tuesday briefing for reporters on the initiatives. "You can design new classical algorithms that work on the routers and networks we have today that are resilient to a future quantum computer." The official was referring to an ongoing competition held by NIST for cryptographers to develop a demonstrably quantum-proof code, whose winners, they said, are expected to be announced "very soon." (The official required reporters to grant anonymity as a condition of the briefing.) After that, of course, comes the hard part: Actually deploying it to vulnerable systems and training users to work with it, all while security experts are still trying to plug holes in our currently existing, non-quantum digital sphere. Afternoon Snack Predictions are hard, which makes it all the more impressive when you one that's spookily accurate, with the benefit of hindsight. Take this clip from 1967 preserved and uploaded to YouTube by the British archive Kinofilm, which features — in addition to a jaunty, easy-listening flute melody and bassline — a depiction of a home of the future where a smiling family does its shopping, homework, and business meetings all through the magic of… some kind of vaguely conceived networking system that enables "traveling entirely by cable." Mind you, this was two years before the first computers were connected to ARPANET (although "The Jetsons" was on the air at this point, so maybe they were taking their cues from the animation world). It's pretty impressive — but try this one on for size, a 1993 clip from AT&T that's so accurate in its predictions that they're almost boring. There's a man filming a group of protestors with a device that looks nearly identical to an iPad. Kids are in thrall to a VR gaming device that's just a few degrees off from the Oculus Quest 2. A man makes business calls by voice from his car, with the help of an AI assistant. Paleofuture's Matt Novak interviewed a writer and producer of the video, Henry Bassman, in 2007 — closer in time to the video's actual creation than we are now to the interview. "We wanted to demonstrate that people and their basic needs would not change in our timeframe but that new technology would help them achieve those needs in a more fulfilling and less stressful way," Bassman said. They might have gotten the tech part of the equation right, but "more fulfilling and less stressful" remains, ah… unclear. The Future In 5 Links There might not be enough raw material to solve the U.S. chip shortage. Go behind the scenes of an exclusive Beverly Hills party for crypto insiders. Deloitte's AI chief is arguing that there's more to AI ethics than just traditional human biases. Dubai's crypto regulatory agency has bought itself some land in the metaverse. David Walden, one of the computer scientists who worked on the earliest incarnation of the internet, died at 79. A message from Connected Commerce Council: Tech powers small business success. Digital tools allow smaller businesses to expand their reach and scale faster with the help of global online marketplaces, two-day shipping, and marketing tools. Plus, 73% of small businesses use digital tools to drive revenue—which is why we can't afford to send Small Biz backwards. Find out how Tech empowers small businesses everywhere.     Looking for in-depth and actionable technology policy news? The Morning Tech newsletter is exclusively available to POLITICO Pro subscribers, please visit our website tolearn more about the benefits of a subscription.       Follow us on Twitter Ben Schreckinger @SchreckReports Derek Robertson @afternoondelete Konstantin Kakaes @kkakaes Heidi Vogt @HeidiVogt   Follow us

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