We’ve been there before, in the crash of the dot-com bubble of 2000, when we believed that downloading pop music and porn would drive the economy of the future. We’ve done it again: We made another tech bubble on the premise that Americans would write the apps and Asians would make the hardware, and the miracle of connectivity would bring the world together in Mark Zuckerberg’s utopian vision. Internet community and Artificial Intelligence were the two blasts of hot air that inflated the bubble. Social media as a substitute for actual human interaction and computation as a substitute for human thought were going to waft us into the future.
Yesterday’s double crash of these delusions was the sort of irony that makes one intimate the hand of God in human history.
The crown jewel of Artificial Intelligence shattered when Uber’s autonomous SUV ran over Ms. Elaine Herzberg at the corner of Curry and Mill Street in Tempe, Arizona. And the concept of Internet community vaporized when news reports alleged that Cambridge Analytica improperly retained Facebook profiles of 50 million users. Facebook promptly lost 7% of its stock market value in yesterday’s trading, and other big tech names fell by 3% to 4%.
All the hype in the world can’t stand up to the ugly fact of a dead human body on the road. A few skeptics, including the distinguished physicist and venture capitalist Dr. Henry Kressel, have warned that AI in general and self-driving cars, in particular, are mainly hype. As Kressel wrote last year in Asia Times:
In a well-controlled environment (like driving on a track), the computer can be expected to respond to situations consistent with programmed information. The problematic situations are the accidental ones when something happens on the track that requires a quick response different from the programmed actions. This is where the awareness and quick response of a human driver come into play and where the response of a computer making the decisions is quite another matter. And this is the skill that differentiates race-car drivers from the rest of us – and computers from all of us.
A glance at the intersection where Uber’s vehicle killed Ms. Herzberg tells the whole story. It is one of those massive, amorphous, ill-designed and opaque suburban crossings that human drivers traverse in fear of their lives. One makes eye contact with other drivers and pedestrians, taps the breaks, and proceeds with extreme caution. To ask a computer to navigate through this sort of mess is foolish. We do not know the precise circumstances of Ms. Herzberg’s death; we only are surprised that it did not happen before. If that seems complex, try fighting the yellow cabs in Manhattan with a self-driving car.
Self-driving vehicle tests are now suspended, which will collapse valuations across a range of Silicon Valley enterprises. But that is minor compared to the blow to the public’s perception of the future of AI technology.
The Information, a consulting organization that showcases industry specialists, recently held a conference call on self-driving where one expert warned: “You have to remember that self-driving does not work, at least in… a highly functional, driverless robotaxi sense. It does not work. And there are many folks clamoring for architectures to get there. Again, think back to flight. Do you ever watch those YouTube videos where the guy pumping the umbrella and the dude with a big corkscrew and the person with the bird wings? I would think of it more that way. It is left to be seen which one of those architectures gets you to a useful outcome.”
America simply doesn’t have the infrastructure to support autonomous vehicles, the expert added. China is another matter, he added:
If you’ve been to China… over the last couple of years and watched it grow, they are literally building new cities all of the time and then they move populations into them. And these cities frequently have infrastructure that is unheard of in the US. Just as an example, fences that keep people off the roads. Someone who jumped the fence and runs out into the road and gets hit by a car – that’s the pedestrian’s fault. Simple things like that make the self-driving problem several orders of magnitude easier [emphasis added]. So even without looking at their “technology pool,” just their ability to do simple things like that I think really makes China a very, very attractive target for developing autonomy. I think it would be foolish to count them out in any way, shape or form. The China market may end up being something that is very big and profitable for the companies that are there.
The last tech bubble was based on entertainment, as I wrote in my maiden column for this website’s predecessor, Asia Times Online, in January 2000:
What if [the Internet stock boom] isn’t a bubble? What if consumers want to double or quadruple their spending on whatever it is the Internet has to offer every year for the next 20 years? What if they will pay a premium to watch their favorite episode of Pee-Wee Herman or the Lone Ranger rather than the latest sit-com? What if they will spend heavily to explore the cutting edge of anatomical possibility on the porn sites?
Americans woke up one day in early 2000 and realized that salacious entertainment could not support equity market valuations indefinitely. Now Americans have discovered that cars won’t drive themselves like magic and that the Facebook fishbowl is not a substitute for ordinary human interaction, but rather a vast commercial experiment in profiling their behavior. Only a handful of Facebook users will delete their accounts and cancel their broadband connections, to be sure, but the bloom is off the lily: The Internet giant no longer can sell the concept of community, and it is not clear what it will sell except the sort of connectivity that is provided by any number of competitors.
The idea that Americans would be the designers and Asians would be the manufacturing worker-bees had an obvious and fatal flaw. At some point, the advancement of the technology requires real physical infrastructure, and research and development will come to grief without a working partnership with the factory floor. Without the sort of physical infrastructure that China is building into its new cities, computation can’t solve all the problems that arise in intersections like the corner of Mill Avenue and Curry St. in Tempe, Arizona.
Infrastructure, R&D budgets, and technological innovation by themselves don’t explain major economic transformations, however. More important than all of these put together, Prof. Edmund Phelps argued in his 2013 book Mass Flourishing (which I reviewed for Standpoint magazine). The people of China have leapt from traditional life into the modern world, and their entire life experience is a sequence of innovations. They are far more eager than Americans or Europeans to adopt new technologies because they never made a habit of old ones. For example, E-commerce now accounts for 30% of retail sales in China, but less than 10% of retail sales in the United States.
China’s alternative to Facebook behind the Great Firewall is Wechat, Tencent’s premier product. Unlike Facebook users, who feel violated when they learn that their personal data was appropriated by big data firms, Chinese social media users have no expectation of privacy. The issue simply doesn’t arise: Everything that one does in China is subject to examination by the state.
America’s tech stocks won’t blow up in the fashion of early 2000 when the tech sector traded at 60 times forward earnings vs. about 16 times today. Unlike the era of maximized burn rates, they are monopolies with stable profits. But the tarnished tech sector won’t drive stock market valuations the way it did during the past five years. It isn’t clear what will.
Nice informative article. As for me I regret that I was born in 1941 instead of 1990. There are cataclismic changes afoot in the world and I would have liked to live long enough to see them take place. China is the country where it is all happening. The West has shot it`s bolt and is in a downward spiral aboard the doomed ship of Hyper Capitalism.
Interesting point of view. You can see it on other major transformations occurring like the electrification of transportation. The US is still tied to it’s 20th century Interstate roads and ICE car’s. It drives the entire style of suburban development. As electric cars are not a plug and play replacement to the ICE, you need a different infrastructure, with high speed electric rail (or at least drive on drive off rail) to travel beyond the urban areas. While this is something China is implementing, large sections of the US seem incapable of making the changes. The need to protect outdated business models.
Facebook collects "likes". New Scientist reports in its March 10 issue that 225 "likes" allow those with access to predict your personality as well as your spouse.
https://www.newscientist.com/article/mg23731680-500-i-exposed-how-online-profiling-leaves-us-open-to-mass-persuasion/
Facebook is a completely unregulated monopoly. There is no practical alternative for most people; all their friends are on Facebook. It owns your data. It is a private organization which gives everyone a personality test, not sharing the results with them, and using them for its own purposes and selling them to the highest bidder. And of course, the NSA has first dibs. Instant color revolution. Wonder why China doesn’t allow Facebook?
What should be done? Facebook needs to be removed from the corporate sector and given the status as a worldwide public utility. Its board of directors should be chosen at random from among subscribers. No government or corporate influence should be allowed. Finance could come from voluntary contributions from subscribers. No ads. No sale of your data.
"This is where the awareness and quick response of a human driver come into play and where the response of a computer making the decisions is quite another matter."
Dear Dr Kressel:
In 2015 and 2016 over 40,100 Americans died in vehicular roadway accidents; over 4.6 M seriously injured at a cost of $414 BILLION !! And the record is getting worse by the year, not better.
Imagine what the global mortality rates look like.
So please explain why it is absolutely impossible for computer driven vehicles to outperform such a dismal record of humans behind the steering whee…
https://www.insurancejournal.com/news/national/2018/02/16/480956.htm
Maybe you were born in 1941, but you have a 21st century mind.
In the thinking of the Marxist-Leninists who run China, social systems become obsolete when they become obstacles to new improved modes of production. They present good arguments.
Galen Linder Marxism makes clear that new productive forces developed within the old system become incompatible with each other, and the old system ends up replaced.
Data here and data there, but at the end of the day when you are hungry data can’t be eaten.
Why to panic, it is inevitable that at the beginning of this new systen of car technology there will be some fatal accidents, but what about in 10 years time, 20 years time, and 30 years time ?
The Middle Kingdom continues to march forward!!
the users of facebook et al, will continue to use it.nothing will change.addiction is hard to break.
Infraistructure aka the engineering that is provisional to allow robot cars, alongside the displacement of entire populations to newly constructed cities where the machinery can thrive is ludicrous if not dystopian. Provioding encapsulated vehicles guided by electronics, instead of functional mass transportation, walkways, dedicated bicycle paths, liviable neighborhoods and the like is hardly utopian. It is the construct of entities that either see it as profitable or envision a very peculiar way of life that is not only unsupportable and dysfunctional but quite mad. I’d rather live in Japan, than China. As for any fabulist dream that considers FB other than what it is, the sooner it disappears, the better.
Good to see that Spengler’s still got some life in him! One niggle: the statement, "Chinese social media users have no expectation of privacy. The issue simply doesn’t arise: Everything that one does in China is subject to examination by the state" is misleading.
First, everyting one does in the USA and the UK is subject to examination by the state–as we well know from the work of Snowden, Assange and copious CCTV footage of everything.
Second, the Chinese people trust their state, as this this chart demonstrates, and have no problem letting them do what the US Government and Her Majesty’s government do but lie about doing.
great
Please please please have a massive bust of the tech bubble. Silicon Valley is one of the centers of Hebrew power.
I don’t suppose a human driver has ever hit a pedestrian, or the age of automobiles would never have happened.
The late adopter leapfrogs technology. Nothing new. I remember the construction of a huge automated film manufacturing facility by Kodak 20 years ago. Someone questioned the investment since digital cameras were starting to become popular. Kodak answered that film would rule for decades, but even if digital started catching up, Kodak could still sell lots of film in China. Idiot. The Chinese who didn’t have cameras eventually bought digital ones like everyone else. They leapfrogged film. Same with Cuba, where 40% now have cell phones. They skipped landlines, and they skipped cameras and walkmans. They use their phones to take pictures and listen to music, and call and text and surf the internet.
I feel sorry for the newly appointed CEO of Uber Mr. Khosrowshahi. Knowing that he has Iranian roots and the victim is Mrs. “Herzberg”.. (how ironic).. he will pay over billions to settle this lawsuit including providing another billions to every victim of Holocaust and every terrorist bombing for the last 30 years. I just hope we don’t see their clown in chief displaying cartoonish image of Uber car depicted as Bomb.
Al Shalom Bangler
There was a safety driver behind the wheel of that Uber car, but she was looking down at the moment of the accident. So what can we really say about this accident. Both the automated and the human driver failed to prevent it.
The US response should be, with all the land here, is to build new cities from scratch. Why does this have to unheard of in the US ?? As stated above: If you’ve been to China… over the last couple of years and watched it grow, they are literally building new cities all of the time and then they move populations into them. And these cities frequently have infrastructure that is unheard of in the US.
This site is a complete joke! What kind of idiots write these articles when they cannot even spell the most basic English words. Oh and China the great innovator? They only innovated if stealing intellectual capital is some kind of innovation. What kind of economy builds complete cities that are unpopulated with half complete buildings? You actually have to produce usable goods to be a functional economy not empty cities. But China is pretty good at killing its own citizens with poisonous products! If you want to kill your dog buy Chinese dog food. Too many kids, feed them Chinese "milk" products. If China is so great why do they have to block the entire free internet? Sorry Chinese people they cannot trust you with the truth. Oh and forget about elections Xi has done away with those since he is emperor for life! Welcome to the Xi dynasty!
Are you stupid enough to think Cubans have free access to the Internet or satellite TV? They do until they are caught and imprisoned!
Does the Facebook revelation and subsequent damage have something to do with Mark Z’s potentials to be a US president?
Personnally, I’ve seen the video and I’m sure that I could not brake and stop the car before hit the lady but normally with thermal vision and automatic brakes, it’s possible. But one point that I approve, a computer can be very quick, find some interesting features but can be stupid sometimes and can be very "limited" face to "extra-situation".
After Facebook now Namo App user data is not safe — Big privacy Concern
After the viral exposure of loopholes in the Aadhaar security system in January’17 now it’s all about the Namo app it is being claimed that the application shares private information of its users with third party companies without their consent.
Read it : https://www.ica.in/newsroom/namo-app-sharing-user-data
After Facebook now Namo App user data is not safe — Big privacy Concern
After the viral exposure of loopholes in the Aadhaar security system in January’17 now it’s all about the Namo app it is being claimed that the application shares private information of its users with third party companies without their consent.
Read it : https://www.ica.in/newsroom/namo-app-sharing-user-data