Congress boosts the metaverse... kind of

How the next wave of technology is upending the global economy and its power structures

Aug 01, 2022 View in browser   By Derek Robertson President Biden listens as Communications Workers of America President Christopher Shelton speaks during a virtual meeting on the CHIPS bill. | Anna Moneymaker/Getty Images Congress passed the CHIPS and Science Act on Thursday, thrilling scientists and wonks in cutting-edge areas like quantum computing, AI and robotics, which could see billions of dollars in new research funding. One of the bill's more unexpected inclusions is a directive for the National Science Foundation to research "immersive technology" — the catchall term for the kind of virtual and augmented reality that is expected to underlie the metaverse. Its inclusion is a win for the XR Associatio n, a trade group for virtual and augmented reality tech companies founded by giants like Google, Microsoft, and Oculus among others, which lobbied heavily for Congress to add it. Exactly what this particular bill actually does to encourage such things is, at the moment, still undefined. "Immersive technology" is one of 10 items listed as "key technology focus areas" in the bill, into which the NSF will invest some of its chunk of the $200 billion the bill authorizes (once, of course, it's appropriated). To see where that money might flow into the VR research ecosystem, it's useful to look at past government investments and experiments with the technology. In 2018 Deloitte published a memo describing how perpetually cash-strapped government agencies might benefit from virtual reality tech, including training first responders for dangerous situations, infrastructure maintenance and analysis and the introduction of VR into public classrooms. (The Defense Department has gotten in on the action as well, with the Army awarding Microsoft a nearly $22 billion contract for the use of its HoloLens AR headsets.) As exciting as all of those applications might sound, there are a not-insignificant number of hurdles to their widespread adoption — first among them being that the actual technology in question is still quite nascent, and there isn't yet the kind of data about the user experience that would normally justify such a massive investment. Even giants like Meta, with seemingly unlimited money to pump into their VR headsets, still struggle with issues around motion sickness and ease-of-use; the military has pushed back the deployment of Microsoft's HoloLens and in April the DoD's Inspector General released a report saying it's not yet clear whether there's enough individual buy-in among soldiers to justify the investment. The NSF's research boost might be able to help with that , said Nick Maynard , co-founder and CEO of the public-private tech organization US Ignite and a former program director at the NSF. In recent years the foundation has made a major push toward applied research, intended to turn VR from a pipe dream into a widely useful tool. "They're going to be more focused on how now that we've got this technology, how can we use them to solve the challenges the country is facing?," Maynard said. "It's less about the technology for its own sake, but thinking through how to create a pathway to implementing it." Though VR and XR are currently all the rage because of the lavish promises of metaverse entrepreneurs, the CHIPS act doesn't actually mention the metaverse by name. And Joan O'Hara , the XRA's vice president of public policy, was careful to distance her organization's funding arguments from the consumer promises of companies like Meta. "If it's something that's going to be primarily used for virtually hanging out with your friends or doing some shopping, that's not where the U.S. needs to be spending its dollars," she said. "You want to think of the future of technology as a whole, and we believe that immersive technology is an important part of that ecosystem."   INTRODUCING POWER SWITCH: The energy landscape is profoundly transforming. Power Switch is a daily newsletter that unlocks the most important stories driving the energy sector and the political forces shaping critical decisions about your energy future, from production to storage, distribution to consumption. Don't miss out on Power Switch, your guide to the politics of energy transformation in America and around the world. SUBSCRIBE TODAY .     the best-laid plans David Baddders/POLITICO The passage of the CHIPS and Science Act might be a rare, bipartisan, warm-and-fuzzy win on the Hill, but do government interventions in industry actually work? Well, maybe. Sometimes. In POLITICO Magazine today, the well-sourced business journalism veteran Bob Davis takes a hard look at some of the U.S. government's previous interventions , which include notable failures like "decades-long efforts to create 'clean coal,' nuclear reactors that use recycled plutonium, nuclear fusion, synthetic fuels and supersonic commercial jets." When it comes to chips, however, Davis is a little bit more sanguine. There's existing capacity and momentum from previous efforts started during the Trump administration, Davis points out. And Biden administration officials hark back to a public-private partnership launched under George H.W. Bush called SEMATECH , which "paid substantial dividends" in making the U.S. competitive on chips earlier in the PC era. afternoon snack Pornography has powered technological advances for decades, even centuries , and now a company is betting it can do the same for Web3 — "AdultDAO," a token-governed "adult production company" which promises, in addition to old-fashioned 2D porn, to at some point provide "full immersion Metaverse AR/VR based content." Like most other DAOs, or decentralized autonomous organizations, one earns a stake in AdultDAO by purchasing its "$ADULT" cryptocurrency, which earns them both its value and a say in how the company operates. (Yes, you can read their white paper here .) The benefits the company touts for conducting its particular business on the blockchain are reminiscent of the early days of Bitcoin, when it was primarily used for transactions that, regardless of their legal status, people preferred to keep off the official books: increased anonymity and independence from the Visa/Mastercard system with all its pesky regulations, among other things. There are still plenty of U.S. laws and regulations surrounding adult content, of course. And when someone "on chain" almost inevitably runs afoul of them, it'll be another milestone in the ongoing stress test between Web3's alternative institutions and the ones that still govern the world the rest of us live in. the future in 5 links As transistors continue to shrink, the chips inside our devices are actually getting bigger . Monthly job postings with "metaverse" in their title have decreased by more than 80 percent during the tech slowdown. NASA is crowd-sourcing some of its most cutting-edge, and off-planet , research. Trial robotaxis are becoming increasingly common on tricky-to-navigate Chinese streets . Some gaming-industry veterans are trying to steer blockchain gaming away from the play-to-earn model. Stay in touch with the whole team: Ben Schreckinger ( bschreckinger@politico.com ); Derek Robertson ( drobertson@politico.com ); Konstantin Kakaes ( kkakaes@politico.com );  and Heidi Vogt ( hvogt@politico.com ). Follow us on Twitter @DigitalFuture . If you've had this newsletter forwarded to you, you can sign up here . And read our mission statement here .   Follow us on Twitter Ben Schreckinger @SchreckReports Derek Robertson @afternoondelete Konstantin Kakaes @kkakaes Heidi Vogt @HeidiVogt   Follow us

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