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ARK Disrupt Issue 124: 3D Printing, Tesla, Google Duplex, Fintech, & CRISPR

Please enjoy ARK Disrupt Issue 124. 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. 3D Printing and AI Join Forces to Transform Manufacturing

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Last week GMGM announced a partnership with AutodeskADSK to design new 3D printed parts generatively. Given the parts required, Autodesk’s generative design software uses artificial intelligence (AI) to create a portfolio of designs from which engineering teams can choose. One of the first parts GM and Autodesk created is a 3D printed seat bracket that is 20% stronger and 40% lighter than the part it is replacing, and requires only one component instead of 8, as shown below:

ARK Disrupt Issue 124

Source: Autodesk

Once in service, parts with sensors will transmit performance-based data, iteratively triggering improvements in the design software and enabling continuous improvement. Thanks to their ability to ingest huge data sets and solve for optimal designs, machine learning based programs will be able to incorporate nuances and complexities that human engineers would find difficult if not impossible to solve.

In time, 3D printing should be able to leverage AI to design and build not just auto parts but the automobiles themselves, literally from the ground up, transforming manufacturing completely.

2. Tailwinds Emerge for Tesla’s Other Businesses

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Last year, TeslaTSLA made headlines when Elon Musk procured a 100 megawatt battery deal by way of TwitterTWTR. Now the Powerpack is operational and making headlines. At the Australian Energy Week Conference last week, a McKinsey partner presented some compelling data: while accounting for only 2% of grid capacity in South Australia, Tesla’s Powerpack makes up 55% of frequency control and ancillary services (FCAS) revenues because it is faster and cheaper, 90% cheaper, than the gas generators and steam turbines that typically compensate for power losses. Many people were skeptical of energy storage as an antidote to power outages, but the Powerpack’s success is stirring up demand. On its first quarter earnings call, for example, Musk noted that Tesla is in negotiations for a gigawatt energy storage project.

In other news this week, the California Energy Commission (CEC) voted unanimously on regulations that not only will require solar for all new homes starting in 2020 but also will offer a credit for onsite energy storage. Tesla could be a big beneficiary of these regulations for a number of reasons: its solar roof is more aesthetically pleasing than solar panels, its solar roof sales efficiency should increase as it targets homebuilders instead of consumers, and the energy storage units accompanying a solar roof could add to the allure of electric vehicles (EVs) and EV chargers.

Interesting to note, the regulation states that “in the event a building isn’t suitable for a rooftop array, the standards require that homes have access to community solar or offset energy usage through additional efficiency gains.” According to ARK’s research, utility solar is more economic than rooftop solar, suggesting that homebuilders will resort more to community solar and that microgrids will evolve. Owning and operating these microgrids, utilities could bolster their mainline grids as homeowners have less incentive to go off the grid.

While ARK believes that economics, as opposed to regulation, should drive technology adoption, we will monitor the decisions of homebuilders and utilities as they navigate this new landscape.

3. Google Duplex is the First Human-Like Voice Assistant

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Artificial intelligence (AI) assistants have disappointed expectations for the most part, as Siri and Alexa routinely misinterpret commands in hilarious ways. Even when addressed in text, machines have a hard time understanding the countless permutations of human language.

Google Duplex is the first demonstration of an AI assistant that seems to be able to handle human dialogue. Last week, at Google’s I/O developer conference, CEO Sundar Pichai showed Google Duplex scheduling a haircut and a restaurant reservation over the phone with no human intervention. The voice assistant was able to navigate complicated scheduling instructions, unexpected questions, and heavily accented english.

GoogleGOOG has attained some modicum of success in the voice assistant arena because it trained Duplex task by specific task. Unlike Siri, Google Duplex does not pretend to be a general assistant capable of free-form conversation. Google Duplex’s first priority in the consumer market is to enhance the performance of the Google Assistant smart speaker while, in the enterprise, it is focused on the performance of automated customer support.

Google Duplex is not artificial general intelligence, but it’s an important step forward.

4. Apple is Partnering with Goldman Sachs to Offer a Credit Card

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In a push for customer acquisition, Apple and Goldman Sachs announced plans to launch Apple Pay Credit Card as they aim to strengthen both Apple Services and Goldman’s consumer-facing business, Marcus.

As of the end of the first quarter, Apple Pay had scaled its customer base to 127 million, with fast-paced adoption in emerging markets like China and Russia. Apple Pay is focused on its role as a “wallet” in the transaction funnel but, in partnership with Goldman SachsGS, also hopes to offer in-store loans and interest free financing to bolster sales of iPhones and other AppleAAPL products.

In a move away from investment banking, Goldman is supporting Marcus to blanket the consumer business, offering savings accounts, loans, and now Apple credit cards. Apple should help Goldman lower customer acquisition costs, lessening its reliance on personal finance management apps like Intuit, Credit Karma and Clarity Money.

5. A CRISPR Breakthrough Increases its Productivity

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This week, a study published in Nature Biotechnology describes a new platform that increases CRISPR’s utility and efficiency dramatically. The Joint Initiative for Metrology in Biology (JIMB) and Stanford University re-engineered the CRISPR-Cas9 system to enhance its genome-editing capability while increasing the addressable regions of the genome. Most important, it increased the number of cells that survived editing by 7-fold, to upwards of 90%.

Historically, the CRISPR-Cas9 system required the identification of a specific sequence of DNA known as the protospacer adjacent motif (PAM) before an edit could take place. The new system eliminates the need for PAM sequences, expanding the number of areas in the human genome that can be edited. Increasing cell survival and viability after editing, the new protocol dramatically increases productivity, especially when editing cells for therapeutic purposes such as CAR-T immunotherapy targeting cancer.


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