• Bill Gates has a plan to tackle COVID-19
  • The world’s data centers are about to get a lot faster…
  • Forget a driver’s license. Very soon, your face will be the only identification you’ll need

Dear Reader,

Well, I won’t sugarcoat it. It is pretty crazy out there right now.

In the last 24 hours, all flights from Europe to the U.S. have been canceled for a 30-day period. The NBA (National Basketball Association) has postponed all games. And the National Guard is setting up a one-mile quarantine area in New Rochelle, New York (north of New York City).

I’ve been in Washington, D.C., this week, and it is remarkable how quiet the town is compared to its usual hustle and bustle. No trouble with traffic at all…

Needless to say, the hospitality and travel industries are being devastated by the current situation. Companies that have too much debt or leverage in this sector are in for very tough times. Those without it are going to thrive on recovery. I remember that travel and work didn’t return to normal for a good six months after the SARS breakout when I was living and working in Asia.

But that doesn’t mean that the economy is shutting down. In fact, some sectors are booming right now. Costco can’t keep products on the shelves. Companies that make hand sanitizer, antibacterial soap, masks, and even toilet paper are experiencing a boom in business.

And Amazon’s business is better than ever. After all, what do we do if we don’t want to go to the store? We order online. We should expect incredible results from Amazon on future earnings calls.

And there are sectors that we wouldn’t naturally think would do well in a situation like this. Last night, I was reviewing some of the data out of Asia with regard to electronics manufacturing.

Demand is actually stronger for semiconductors and electronic components used for 5G wireless infrastructure. This is a clear indication that the 5G wireless network infrastructure build-out is “full speed ahead”.

And the demand for the high-performance computer processors, logic integrated circuits, and memory used for computer servers has not slowed down at all. In fact, it appears to be increasing. Why? Because people are spending more time at home, online, working and entertaining themselves while the world gets COVID-19 under control – and it most certainly will.

And those who have been infected in China are recovering rapidly. The number of new cases in China is slowing to a crawl. That means factories are starting to return to normal.

And while smartphone shipments in 2020 are expected to drop to 1.3 billion units down from 1.4 billion units, we should keep this kind of number in context. That’s less than an 8% drop in annual product and is not far off last year’s number at all.

Of course, all that being said, I understand the markets are very volatile right now and readers are understandably concerned. The S&P 500 closed down 4.92% yesterday, and as of writing, the S&P is down another 7%. But rest assured that I’m monitoring this situation. And I will be in regular contact with my subscribers as we weather this volatility.

But for now, let’s turn to today’s insights…

The coronavirus accelerator is set to launch…

We’ve been covering the COVID-19 extensively in these pages. As of yesterday, the WHO estimates there are 118,322 confirmed cases worldwide. But there’s a new reason to be optimistic about the fight against COVID-19.

The Bill and Melinda Gates Foundation has teamed up with the Wellcome Trust and MasterCard to launch the COVID-19 Therapeutics Accelerator. This will be a biotechnology incubator for speeding up the development of treatments for COVID-19.

The three parties are contributing $125 million to the effort. Both the Gates Foundation and the Wellcome Trust are kicking in $50 million. And MasterCard is contributing $25 million.

The Gates Foundation is taking a play out of Silicon Valley’s playbook with this move. The idea is to put $125 million to work on the best treatment candidates quickly.

It’s all about moving fast. These programs are common in Silicon Valley for getting early stage companies off the ground.

To start with, the group will test antiviral drugs that have gone through clinical development already. There is a universe of 20,000–30,000 potential medicines for COVID-19 that already exist. They may just need some optimization. The accelerator will analyze them and select the most promising candidates for immediate testing.

Still, the group acknowledged that it will likely be 12–18 months before any treatments could be made widely available. And COVID-19 will likely have run its course by then.

But that doesn’t mean this accelerator is all for naught. This is a great approach that will inform better vaccine development in the future. As the Gates Foundation’s CEO Mark Suzman said, “Viruses like COVID-19 spread rapidly, but the development of vaccines and treatments to stop them move slowly.”

So even if a treatment for COVID-19 doesn’t come in time, the accelerator may help develop a generic coronavirus shot that could help us fight similar outbreaks in the future.

One thing I deeply respect about the Gates Foundation is its willingness to try radical approaches to urgent health problems. It is willing to invest in projects that likely have a high percentage of failure… But if they succeed, they could be transformational.

And the Gates Foundation places a heavy emphasis on solutions that will be effective in developing markets, not just those that would only work in affluent countries with well-established health care systems. Their efforts around COVID-19 are no exception.

A breakthrough in magnetics technology…

Fascinating research just came out of the University of Edinburgh.

Scientists created a new magnetic compound made mostly of manganese. And they found that this compound can be controlled by hitting it with ultrafast laser pulses. These laser pulses are incredibly short and quick, lasting only one-millionth of a billionth of a second.

I know this may sound odd on the surface, but it turns out this breakthrough could upend the data storage industry…

In testing, the researchers found that this compound enabled computer hard drives to process data up to 100 times faster than existing technology. This happens because of how quickly the compound reacts to the ultrafast laser pulses.

Any time I see such a drastic jump like this, my ears perk up.

When we are looking for exponential growth, we aren’t interested in 10%, 20%, or even 50% improvements. We are looking for improvements of 10x… 100x… sometimes even 1,000x.

That’s why this caught my eye. If this new compound can be commercialized, it will rapidly take over the industry. It could especially be useful in hyperscale data centers.

These data centers are essentially the backbone of the internet. They are where most data are processed and stored. Everything from our Facebook feeds to the data on our iPhones is backed up to a data center. And it’s estimated that global data centers will process more than 17 exabytes of data this year alone.

For context, one exabyte is equivalent to 100,000 times all the printed material in the Library of Congress. That’s a lot of data to process. And if we could process that data 100 times faster, it could be a game changer.

And there is another added benefit to this new approach… It is remarkably energy efficient. Hard drives today suck up a lot of energy, generating a lot of heat. That’s why the global data center industry consumes 2–3% of the world’s power and produces carbon emissions on par with the aviation industry on an annual basis.

This new compound requires less energy to run. And it produces very little heat. That means it could not only make the world’s data centers faster but also reduce carbon-based energy consumption as well.

Singapore is going all in on biometric identification…

Singapore is getting aggressive with its national ID system. The country is getting rid of physical photo ID cards and replacing them with facial recognition and fingerprints. It’s going all in on biometrics.

Now, Singapore has been building a biometric database of its citizens for the last six years. And for the most part, the biometric data was not gained using covert means. Instead, the country launched a smartphone app for citizens to register their biometric profile.

Singapore plans to launch its new biometric ID system this summer. Small kiosks will be installed at government agencies to identify citizens. And the goal is to move to 100% biometric IDs by 2022 – less than two years from now. Physical photo IDs will become a thing of the past.

Interestingly, Singapore is building this system to be compatible with retail stores also. Participating stores will be able to confirm identity via facial recognition, and then shoppers can simply take what they want, confirm the purchase on their smartphone, and walk out. Their linked account will be charged automatically.

Now, I know this is an uncomfortable topic. There’s certainly potential for problems, abuse, and even data breaches with a biometric system like this. But whether we like it or not, this is the future. I expect many countries will adopt this system in the coming years.

And Singapore is the perfect place to start because it’s a small, self-contained island. Its total population is just 5.7 million. That’s about the population of Maryland in a much smaller geographic area.

Do you have a driver’s license? A passport? Student ID?

In the near future, it’s unlikely that we’ll need them at all. Our face and fingerprints will likely be the only identification we’ll ever need.

Regards,

Jeff Brown
Editor, The Bleeding Edge

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