Tech Brew Ride Home - Wed. 08/26 – Palantir’s S-1 Takes A Swipe At Silicon Valley

Episode Date: August 26, 2020

Palantir’s S-1 filing gives us our first look under the hood of their business. Apple is bringing AR content to Apple TV+. A big name in 3D printing is going public… and guess how? A new digital networking speed record. And Elon Musk is going to demo his brain/computer interface technology on Friday. Sponsors: Masterworks.io, select PODCAST, then enter: RIDE TinyCapital.com Links: Palantir files to go public, lost about $580 million last year (CNBC) Apple Plans Augmented Reality Content to Boost TV+ Video Service (Bloomberg) Facebook changes name of its annual VR event and its overall AR/VR organization (TechCrunch) White House announces creation of AI and quantum research institutes (VentureBeat) Desktop Metal going public in SPAC-led deal that could value 3D printer company at $2.5B (TechCrunch) Researchers at University College London Set a New World Record for Fastest Internet (Gizmodo) Elon Musk promises demo of a working Neuralink device on Friday (The Verge) Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the tech meme right home for Wednesday, August 26th, 2020. I'm Brian McCullough. Today, Palantir's S-1 filing gives us our first look under the hood of that secretive business.

A big name in 3D printing is going public and guess how. A new digital networking speed record is set and Elon Musk is going to demo his brain computer interface technology on Friday. Here's what you missed today in the world of tech. Palantir has filed its S-1 for its public market list. listing. These sorts of things are always interesting to dive into because oftentimes S-1s are where we get our first peek at what sort of a business a company actually has. But all the more so in this case with a company as secretive as Palantir. Here's the headline. In 2019,

Palantir had a net loss of $580 million on $742.6 million in revenue. Also, the company derives more than 20% of its total revenues from just two unnamed customers. one of which you would think has to be the CIA, right? So, is this a good business, question mark? Quoting CNBC. Revenue grew almost 25% from the year earlier, while the loss stayed about the same. In the first half of 2020, it lost $165 million or $175 million on a pro forma basis. The company aims to trade on the New York Stock Exchange under the symbol PLTR. Rather than sell shares through an initial public offering, the company intends to debut with a direct listing, the same unconventional route taken by Slack in 2019 and Spotify in 2018. Palantir has two classes of stock, Class A and Class B, and while each share of

a stock receives the rights to one vote, each Class B share gets 10 votes. The structure is similar to Facebook's. Peter Thiel is the largest holder of Class B shares, owning about 30% of them. Palantir plans to introduce Class F shares as well, and those will have a variable number of votes. Class F shares are meant to give founders Teal, Stephen Cohen, and CEO Alex Karp, just below 50% of total voting power for the stock, essentially giving the founder's control over major decisions. This echoes steps taken by other tech giants through the years, including Snap, which sold non-voting shares to investors, as well as Facebook and Google, now called Alphabet, which have introduced multiple classes of shares to maintain founder control, end quote.

So that's notable. Basically, the founding team can never be outvoted, even if every single other shareholder in the company is on the other side of whatever the issue is. And let's just say that the letter that CEO Alex Karp included in the filing was interesting. Karp said the engineering elite of Silicon Valley do not know, quote, how society should be organized or what justice requires. Quoting Karp directly. Our company was founded in Silicon Valley, but we seem to share fewer and fewer of the technology sector's values and commitments, Karp said. Pallantir has, quote, repeatedly turn down opportunities to sell, collect, or mine data. Contrasting it with other consumer companies, quote, built on advertising dollars. Software projects with our nation's

defense and intelligence agencies, whose missions are to keep us safe, have become controversial while companies built on advertising dollars are commonplace. For many consumer internet companies, our thoughts and inclinations, behaviors, and browsing habits are the product for sale. The slogans and marketing of many of the Valley's largest technology firms attempt to obscure this simple fact, end quote. So, pitting themselves specifically against Silicon Valley, which, as we mentioned recently, Palantir seems to be planning to leave. And Carp, as I mentioned, has spoken out before against what he described as Silicon Valley Groupthink. Also, there's this timely position taken in the letter, quote, our leadership believes that working with the Chinese Communist Party is

inconsistent with our culture and mission, the filing says. We do not consider any sales opportunities with the Chinese Communist Party, do not host our platforms in China, and impose limitations on access to our platforms in China in order to protect our intellectual property, to promote respect for and defend privacy and civil liberties protections, and to promote data security, end quote. Sources are telling Mark Gurman that Apple plans to add AR content to Apple TV Plus next year, sort of as a form of bonus content akin to director commentaries, I guess, which, quoting German. In the new feature, elements of a TV show like characters or objects would be displayed on a viewer's phone or tablet and integrated into the surrounding environment, according to people familiar with the project. For example, someone watching a moonwalking scene in the Apple show for all mankind might be able to see a virtual lunar rover on their devices display, seemingly perched atop their living room coffee table. The option would serve as bonus content akin to the director commentary or trailer that accompany a movie download and would be accessed

from Apple's TV app on the iPhone or iPad. The AR feature is expected to debut next year ahead of an Apple headset in 2022 that will be built around augmented and virtual reality, said the people who asked not to be identified because they weren't authorized to discuss the plan publicly. A release of the TV Plus feature had previously been set for later this year, but the effects of the coronavirus pandemic on software development and film production impeded that goal. Apple could ultimately decide to scrap the plan, the people said, and an Apple spokesman declined to comment, end quote. Speaking of AR and VR, Facebook announced yesterday that it will unify its AR and VR teams

into a new group called Facebook Reality Labs. Not only that, its annual Oculus Connect event, which is scheduled to be held on September 16th, is now being renamed Facebook Connect. Something Something, Zuckerberg's weird obsession with subsuming everything under the big blue icon, right? But as TechCrunch notes, quote, Oculus has held a very different example. inside Facebook than other high-profile acquisitions like Instagram or WhatsApp. The org has been folded deeper into the core of the company, both in terms of leadership and

organizational structure. The entire ARVR org is run by Andrew Bosworth, a longtime executive at the company who is a close confid of CEO Mark Zuckerberg. In some sense, the name change is just an indication that the product ambitions of Facebook in the ARVR world have grown larger since its 2014 Oculus acquisition. Facebook is now no longer just building. Facebook is now no longer just building headsets. They're also building augmented reality glasses. They're adding AR software integrations into their core app and Instagram through Spark AR. And yes, they're still doing some stuff with Facebook portal. In another sense, adding the term labs to the end of a division that's several years old with several products you've spent billions of dollars to realize seems to be Facebook

doubling down on the idea that everything contained therein is, one, pretty experimental, and two, not contributing all that much to the Facebook bottom line. This seems like the likely home for future Facebook moonshots, end quote. So it's not hard to see Facebook telegraphing with this move, the eventual sunsetting of the Oculus brand, sooner than anyone would have thought, I guess. But also, that just heaps more heartburn on Oculus users and developers already angry about that requirement that you needed a Facebook account before you could even dare to pick up an Oculus device going forward. Andrew Bosworth even tweeted a new logo for the Facebook Reality Labs saying, quote, Even when we created the ARVR org in 2017, the name never quite captured the depth and breadth

of work and research our teams have been doing to build the next computing platform centered around people. Today, we're unifying under the name Facebook Reality Labs, end quote. To which Ben Lang snarked, quote, pretty sure you used to have a strong brand around that. What was it called again? Oh yeah, Oculus, end quote. The White House today announced a more than one billion dollar investment to create 12 research institutions to focus on U.S. development of AI and quantum computing. Quoting Venture Beat. Agencies including the National Science Foundation, U.S. Department of Homeland Security, and U.S. Department of Energy have committed to investing tens of millions of dollars in centers intended to

serve as nodes for AI and quantum computing study. According to the Trump administration, over the next five years, the NSF will partner with the U.S. Department of Agriculture's National Institute of Food and Agriculture, the U.S. Department of Homeland Security Science and Technology Directorate and the U.S. Department of Transportation's Federal Highway Administration to invest $100 million across five AI institutes. Separately, the USDA will support two of its own institutes with $40 million in grants. The Trump administration claims the institutes bring together more than 100 entities, including companies like John Deere, which will seek to further develop and apply the research. Beyond the NSF's investments, the DOE will award $625 million to create five quantum

information science research centers. Of the total, the Trump administration says 300,000. million will come from industry and academic institutions with the remainder drawn from $1.2 billion earmarked in a 2018 law, the National Quantum Initiative Act for quantum research. The Trump administration says a coalition of 69 national labs, universities, and companies was selected in a two-step vetting process to collaborate within centers across 22 U.S. states, Italy, and Canada. Among the participants are the University of Chicago, Harvard, Cornell, IBM, Intel, Lockheed Martin, and Microsoft, end quote. Before I forget, one more big going public announcement to share with you.

Desktop Metal has been one of the big names in the 3D printer space for a while now. Desktop Metal has raised $430 million in investment to date, and it was one of the fastest U.S. companies to achieve unicorn status back when that really meant something. Well, Desktop Metal is also going to be one of the, cavalcade of companies joining the public markets in the near future, hoping to go out at a $2.5 billion valuation. So that would be noteworthy all on its own, because, again, big name in a big space, 3D printing, but also there's this. It's going public via a SPAC. I swear everybody, SPACs just recently got on my radar and suddenly they're everywhere, quoting TechCrunch.

The Burlington, Massachusetts company plans the list on the New York Stock Exchange under the ticker symbol DM by merging with Trine Acquisition Corp. The blank check company announced its own public offering of $261 million in March of last year. Under this new deal, Trine will merge with desktop metal to create a company worth up to $2.5 billion by its own estimates. Desktop metal's most recent valuation from early last year had the company at $1.5 billion. The SPAC-led deal could therefore provide an attractive markup for desktop metal investors. The SPAC-led public debut will generate as as $575 million in gross proceeds, according to a release describing the deal. Tryan will contribute $300 million with another $275 million from, quote, committed common stock

pipe at $10 per share. The term pipe stands for private investment in public equity and allows for more money to flow into spec-led deals when required. In addition to furthering its own R&D efforts, desktop metal plans to make its own acquisitions using this money in what it refers to as a, quote, constructive consolidation of the additive manufacturing 3D printing industry. The deal would position desktop metal as a primary player and what it's deemed additive manufacturing 2.0, essentially a second wave of 3D printing innovation that could finally see the technology fulfilling its potential to truly upend manufacturing after years and decades of hype, end quote. There's been a new data transmission record set.

Imagine you could do networking at 178 million Mb. P.S. Quoting Gizmodo, imagine being able to download every single movie and TV show on Netflix in less than a second. Thousands of titles in a literal snap. Researchers at University College London have the ability to do that with a new world record they set for fastest internet, 178 terabits a second, or 178,000 GbPS. Lecturer and Royal Academy of Engineering Research Fellow, Dr. Lydia Galdino and team collaborated with XTERA and KDDI research on the project. According to UCL's announcement, that speed is, quote, double the capacity of any system currently deployed in the world.

To get that insanely fast speed, UCL researchers used a greater range of wavelengths than what's typically used in fiber optic cables and different amplifier technologies to boost the signal. Fiber optic cables tend to absorb signals, at least absorb the protons that are transmitted through the cable to make the signal, after a few miles, because of the signal. of the material the cables are typically made out of. Repeaters, which are like a Wi-Fi extender, are needed to retransmit those signals so they can travel for a longer distance. So what the researchers managed to do is not only extend the signal, but also massively

amplify it. Current infrastructure uses a limited spectrum bandwidth of 4.5 terahertz, and 9 terahertz commercial bandwidth is just starting to enter the market. 5G on the high band or a millimeter wave spectrum operates on 24 gigahertz, and above, and can transmit data up to a rate of 1-23 GbPS. But the internet speed Dr. Galdino and team achieved uses a 16.8-terohertz bandwidth to get 178,000 GbPS, makes 5G seem rather slow when you put those numbers side by side. This kind of system would be cheap to integrate with our existing internet infrastructure, too. According to UCL, upgrading amplifiers at certain intervals would be a

fraction of what it would cost to install new fiber optic cables, roughly $21,000 for every 25 to 62 miles versus 494,000 every 0.62 miles or one kilometer. This sounds like it could be a worthwhile solution to help shrink the digital divide, something that the current pandemic has further illustrated the seriousness of, end quote. Finally today, just a heads up that Elon Musk plans to demo his mysterious Neurrelink machine brain interface technology at 6 p.m. Eastern time this Friday, quoting The Verge. Musk has spoken repeatedly about his belief that brain machine interface devices are needed to help humans keep up with AI by supplementing our brain power.

But right now, his goal is much simpler to create an implantable device that lets people control phones or computers with their mind. Musk initially announced the August 28th progress update, in July, and has now offered more details on what will be shown. He says the update will include the unveiling of a second-generation robot designed to attach the company's technology to the brain and a demo of neurons firing in real-time, though it's not clear exactly what is meant by this. Even compared to Musk's other ventures like Tesla and SpaceX, NeurLink is ambitious. The company wants to connect to the brain using flexible electrodes thinner than a human hair that it calls

threads. Current BMI devices use stiff electrodes for this job, which can and cause damage. But inserting flexible electrodes is a much more delicate and challenging task, hence the company's focus on building a, quote, sewing machine-like robot to do the job. Eventually, Neurrelink hopes to make the installation process for BMI's as non-invasive as LASIC eye surgery, even removing the need to use general anesthetic. Musk has previously spoken about the need for an automated LASIC-like process for BMI's to overcome the constraints and costs involved with needing to use highly-transecting. neural surgeons. But this isn't ready to be shown off yet, according to Musk. Quote,

still far from LASIC, but could get pretty close in a few years, Musk tweeted, in response to a follow-up question about the event, end quote. I, for one, look forward to upgrading my brain to stay ahead of the robots, of course. You never know about Elon's demos. They're always wild, but sometimes they're wild in the wrong way. I don't know that. Why do I have the feeling that this one might be more than a little mind-blowing. I guess we'll see. No word yet on how we'll be able to watch this event on Friday, but I guess keep your eye on the Neurrelink YouTube channel.

Talk to you tomorrow.