Hello, and welcome to this week’s installment of the Future in Five Questions. This week I spoke with Matthew Ball, venture capitalist and author of “The Metaverse,” a 2022 book on the business, technological and social ramifications of what he calls “spatial computing” that will be published in a new edition next week. Ball talked about why he thinks tech watchers underestimate the impact of “digital twins,” the relationship between generative AI and global supply chains and why he thinks government should focus on regulating APIs rather than technology itself. The following has been edited and condensed for clarity: What’s one underrated big idea? Digital twins, 3D models of real-world buildings, spaces, environments, etc., became overhyped during 2021 and 2022 as countless companies rushed to have some semblance of a “metaverse strategy.” However, there was no real plan for these costly models, let alone the appropriate supporting technology and training to use them. Most ended up like a virtual version of a corporate campus miniature: fun to look at for a bit, but of limited operational value. In 2024, these models are now underrated because while the stigma partly endures, the technology itself has matured. Nearly all twins of the past few years are what we call “Level 1” twins — they just capture an environment at a single, fixed point in time. Level 2 are “real-time twins” that are updated live to reflect environmental changes. Level 3 are “predictive twins” that use AI to help human operators better understand a physical environment. Level 4 are “prescriptive twins” where AI systems recommend actions in real time. Level 5 are autonomous twins where AI can make “prescriptions” and do so at a velocity and level of accuracy a human never can. Tesla is currently building a full-scale, live Unreal Engine-based simulation of San Francisco to support their autonomous vehicle services. This model is expected to be generated in part through the camera feeds of participating vehicles. What’s a technology you think is overhyped? I think it’s easy to overlook the achievements of crypto over the last two years — not just its financial recovery, but also the growing adoption of stablecoins, increased legal clarity, growing regulatory and governmental support…. I’m also optimistic about many prospective applications. At the same time, I think it’s difficult to argue that blockchains have (or are foreseeably likely) to produce the value required to justify a $2.5-2.7 trillion valuation. What book most shaped your conception of the future? “The Travels Of A T-Shirt In The Global Economy: An Economist Examines The Markets, Power, And Politics Of World Trade” by Pietra Rivoli. This is a remarkable and prescient examination of how economies, individuals and policymakers are affected by new supply chain technologies and goods. The average gram of cotton travels through countless countries, and is often assembled, re-assembled, repurposed, recycled, reconstituted and so on. The story is a lot richer and more complex than just who harvests, weaves, and buys. Though counterintuitive, I think there are a number of lessons here that relate to Generative AI. On the one hand, we typically lack the imagination required to understand how much growth will come from a new technology and in which forms. On the other hand, those who talk about the “Labor Lump Fallacy” tend to ignore that, even if total employment grows and many workers retrain over the long run, generations can still end up irrevocably displaced and forgotten through no fault of their own and despite a desire to adapt. What could government be doing regarding technology that it isn’t? I think there is still too much focus on regulating products like applications or services, rather than APIs. Where, when or how an entrepreneur can compete is based in part on the former, but possible through and crucially, defined by the latter. What surprised you most in the past year? The Silicon Valley response to the EU’s Digital Markets Act and Digital Services Act. These are unquestionably imperfect, but many seem to miss the forest through the trees. Yes, the rules are sometimes inconsistent, can seem arbitrarily defined and often deliberately target a product or category, but designing laws to achieve a policy objective, rather than enforcing policies that meet, frankly, antediluvian laws, is a feature, not a bug. In the United States, there’s woefully little antitrust precedent or even a conception of a software platform, and little ability to define one. That sucks, but that’s primarily our problem. I admire the EU’s hit-and-miss effort to design policy that understands an iPhone isn’t a truck, or even a railway. I think Silicon Valley is sincerely outraged, but largely because they’re surprised foreign politics and policies don’t work as ours do.
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The Biden administration is scrambling to address a massive global IT outage that grounded flights, ripped through hospitals, and snarled IT networks at federal agencies and Fortune 500 companies, as our colleagues John Sakellariadis, Maggie Miller, and Joseph Gedeon reported Friday. Anne Neuberger, top cyber official at the National Security Council, said during a panel at the Aspen Security Forum Friday that there is no indication of a hack. She said she spoke with George Kurtz, CEO of the Crowdstrike cybersecurity company that is thought to have caused the problem via a software update it shipped to Microsoft users. Lawmakers demanded details on how a cybersecurity firm could find itself at the center of the type of incident it is supposed to stop. In a letter to Jen Easterly, director of the Cybersecurity and Infrastructure Security Agency, Rep. Ritchie Torres (D-N.Y.) demanded a probe of what went wrong, writing the number of systems that broke down “raises concerns about the cyber vulnerabilities of our critical infrastructure systems grinding to a halt based on a software update.” Sen. Eric Schmitt (R-Mo.) also plans to ask the Pentagon’s Chief Information Officer for a briefing on the impact of the outage within the Defense Department. Kiersten Todt, former CISA chief of staff, told John that the incident highlights the risks of “a very strong dependence” on a small number of IT firms, like Crowdstrike and Microsoft. “I do think it really begs the question about how we are building resilience into our infrastructure,” Todt said.
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