ARK Disrupt Issue 107: Deep Learning, Ripple, CRISPR, and CES

Please enjoy ARK Disrupt Issue 107. This blog series is based on ARK Brainstorming, a weekly discussion between our CEO, Director of Research, thematic analysts, ARK’s theme developers, thought leaders, and investors. It is designed to present you with the most recent innovation takeaways and to keep you engaged in an ongoing discussion on investing in disruptive innovation. To read the previous issue, click here.

1. Deep Learning Turns Mockups into Code

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Within three years, deep learning could automate much of front-end web development. Last week, deep learning researcher, Emil Wallner, published a study showing that trained neural networks can convert webpage mockups into HTML code. Trained with many iterations of webpage screenshots and corresponding HTML codes, the neural network learns the relationship and can generate HTML code to describe webpage elements like paragraphs and images. A fully trained network can convert mockups to code, minimizing the tedious work associated with building webpages.

This example illustrates how artificial intelligence will automate menial mental labor. Automating the generation of code gives web developers the opportunity to focus on design and user experience instead of plumbing. Automation should make the web development role more accessible, productive, and valuable.

2. Ripple Continues to Make Waves with MoneyGram Partnership

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MoneyGramMGI and Ripple are partnering to test XRP in the money transfer space. Ripple is creating a network “for banks and financial institutions that [will] allow for faster and cheaper interbank trading and settlement.” MoneyGram hopes to become competitive with digital upstarts now that U.S. regulators have nixed its deal with Alibaba’sBABA Ant Financial. Thanks in part to MoneyGram’s announcement, XRP has soared roughly 700% during the last month, making Chris Larsen, co-founder of Ripple, one of the wealthiest individuals in the world.

That said, XRP’s use case has yet to be proven. Having been “criticized for obfuscating the nature of its partnerships with financial institutions,” one of Ripple’s challenges is garnering trust. Its centralized ecosystem is anathema to the blockchain community which has been built on open source software. Despite this controversy, the MoneyGram partnership does seem like some sort of progress for Ripple’s xRapid.

3. Microsoft Is Advancing CRISPR With Artificial Intelligence

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CRISPR genome-editing technology has emerged as the discovery of the decade, if not the century, for treating and potentially curing disease. Getting from here to there, however, will require further optimization and characterization. Microsoft is addressing the need to increase CRISPR’s safety and efficacy with artificial intelligence (AI).

With CRISPR, a guide RNA (gRNA) directs a nuclease like Cas9 to a dysfunctional stretch of DNA in order to cut and correct any mutation. While many gRNAs can locate mutations in the genome, they also can cause off-target effects in unintended areas of the genome.

With machine learning, Microsoft ElevationMSFT is an open source platform that predicts the probability of off-target effects. Researchers simply enter the gene of interest, and Elevation will list a number of guide RNAs and the probability of off-target effects associated with each one.

Thanks to AI, predictive technology is accelerating the pace of innovation in the health care space. Because AI protocols are open source, the pace of their adoption should accelerate, in our view changing the course of health care decision-making profoundly.

4. What Happens in Vegas (at CES)…Makes It Into Our Sunday Newsletter

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Last week, the International Consumer Electronics Show (CES) was abuzz with autonomous vehicle news, as automakers now use it to announce technology breakthroughs. While nothing stole the show this year, the ARK team focused on the strides that GM is making.

Among traditional automakers, GMGM seems to be the most progressive in beginning the transformation of its business model to electric and autonomous. While not a huge hit, Chevy Bolt’s U.S. sales have increased steadily to roughly 3,000 a month as of December. Furthermore, by giving Cruise Automation autonomy after acquiring it, GM now has test vehicles with an impressive technological edge.

At CES, GM announced that it would mass produce autonomous cars without steering wheels or pedals by 2019, confirming CEO Mary Barra’s comments on GM’s last earnings call that it planned to remove safety drivers within quarters rather than years. GM may have been motivated by the launch of Waymo’sGOOG driverless vehicle tests in Phoenix. Adding to evidence that it is accelerating its timeline for autonomous electric vehicles, GM plans to ask for an exemption from Federal Motor Vehicle Standards which otherwise would cap them at 2,500 autonomous vehicles.

Important to note, GM became the second auto manufacturer after Waymo to submit a safety report to the US Department of Transportation (DOT) voluntarily. The DOT has asked firms working on autonomous cars to submit reports to assist regulators in setting safety standards. Tesla already had contributed data and information to the DOT in the aftermath of its fatal accident in 2016. In response, the National Highway and Transportation Safety Authority concluded that the risk of death was 40% lower in cars equipped with AutoPilot than otherwise would be the case.

Autonomous vehicles are getting ready for prime time. Stayed tuned to our research for the next big breakthrough!

ARK's statements are not an endorsement of any company or a recommendation to buy, sell or hold any security. For a list of all purchases and sales made by ARK for client accounts during the past year that could be considered by the SEC as recommendations, click here. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of the securities in this list. For full disclosures, click here.