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ARK Disrupt Issue 129: AI, Blockchain Technology, Autonomous Cars, Robots, and CRISPR

Please enjoy ARK Disrupt Issue 129. 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. ARK Presents on AI Hardware and Blockchain Technology at CogX London 2018

Follow @jwangARK on Twitter

This week ARK presented at CogX, a premier technology conference in Europe focused on artificial intelligence (AI) and blockchain technology. Sponsored by Softbank, CogX attracted more than 7,000 attendees and a wide range of speakers spanning industry (NvidiaNVDA, ARMARMH, IntelINTC), startups (OpenAI, Graphcore, Five.ai), and the VC community (a16z, Lux, Placeholder).

ARK presented on the future of AI hardware, focusing on the competitive evolution of the graphics processing unit (GPU) as more specialized chips have entered the market. In short, while GoogleGOOG, Intel, and a variety of startups have intensified the competition, Nvidia has evolved its GPU architecture rapidly, staying ahead of those promised by new entrants.

ARK alumnus and advisor, now a Partner at Placeholder, Chris Burniske, also presented at the conference. With speakers from Verisart, Pantera, and Oxcert, Chris hosted a panel on blockchain’s potential for tokenizing non-fungible assets.

You can watch James present on AI hardware here, and Chris host the panel on tokenizing assets here.

2. Amazon Is Increasing its Commitment to the Indian Fintech Sector

Follow @bhavanaARK on Twitter

India’s booming fintech market is attracting many international players like WalmartWMT, AlibabaBABA, AmazonAMZN and SoftbankSFTBY.  Amazon, in particular, is becoming serious about the market, competing aggressively to gain market share. Amazon committed $5 billion in 2017 and reupped its investment by $2 billion last week, making it one of the largest foreign investors in India’s digital economy, second only to Softbank.

Recently, Amazon invested in Acko, an Indian digital insuretech firm. Like ZhongAn in China, Acko is entirely digital, giving it a data advantage that translates into lower prices and costs. Acko’s differentiation includes data and insights about its customers, translating into unique products like mobile payments and bike insurance. Amazon’s customers can access Acko insurance with AmazonPay.

Amazon also is carving out a differentiated position in the Indian lending space with its “Seller Lending Network”. Through this intermediary, merchants can apply for loans, check their loan status, and pay by linking their sales to their loan accounts. Amazon has onboarded a number of lenders including Aditya Birla Finance, Bank of Baroda, Capital First, and Yes Bank who can access Amazon’s machine learning programs, making the loan approval process quick and efficient for Amazon.in’s 340,000 merchants.

3. Data Labeling, Not Coding, Could Be Key to Tesla’s Autonomous Car

Follow @skorusARK on Twitter

Tesla’sTSLA Director of AI and Computer Vision, Andrej Karpathy, recently gave a talk on “software 2.0” that is a must-watch for analysts and investors in the autonomous vehicle space. Describing the differences between software 1.0 and software 2.0, he emphasized that software 1.0 requires domain expertise while software 2.0 is much more automated.

In the software 1.0 ecosystem, an engineer designs the algorithm and tests its performance, repeating the process continuously to optimize the algorithm. With software 2.0, a neural net designs the algorithm and optimizes for the desired outcome, with humans responsible for labeling a massive dataset in order to train the neural net.

In the slide below, Karpathy illustrates the change in mindset and workload between software 1.0 (PhD) and software 2.0 (Tesla). The gating factor is data labeling. While software 1.0 requires highly skilled engineers to tweak the code continuously, the software 2.0 ecosystem requires data labeling as opposed to computer science or other sources of expertise. Because software 2.0 is more automated, algorithms evolve as datasets improve over time.

In other words, companies aiming to capitalize on the autonomous vehicle space with software 1.0 probably will hit a wall, improving little beyond that point. Software 2.0 looks like the winner.

ARK Disrupt Issue 129 Graph 1

4. Rolling Robots Could Cut the Cost of Delivering Home Groceries By More Than 90%

Follow @tashaARK on Twitter

Today, Americans spend roughly $50 billion1 driving their personal cars to and from grocery stores, and they lose another $30+ billion2 in productivity and leisure time.3 Rolling robots, such as Starship’s, could cut delivery cost by more than 90%, to $4.5 billion, all other things equal.4

More likely, thanks to the convenience and cost-effectiveness of robot delivery, Americans will place orders more often, particularly for fresh food. If every household in the U.S. were to order just produce daily, robot delivery revenues would scale to $20 billion, and sales of hardware, primarily rolling robots, would total roughly $8 billion.5 If Starship and other delivery robots were to achieve 80% penetration of this market, platform operators for robotic delivery could be valued at about $5 billion in market cap.6

These estimates should prove conservative. For example, rolling robots also could deliver many kinds of packages and perform repetitive tasks in hospitals and hotels.

ARK expects that drones and autonomous vehicles will evolve into many form factors, reshaping the logistics ecosystem in place today completely.

5. Could CRISPR Cause Cancer?

Follow @msamyARK on Twitter

This week, two publications in Nature Medicine hit CRISPR stocks, as some claimed that the study implicated CRISPR-edits as potential causes for cancer. ARK does not believe that these results are a showstopper for CRISPR-based therapeutics.

Sponsored by Karlinska Institute and Novartis NVS, the studies focused on the role of the p53 protein in CRISPR editing. P53 is a protein well-recognized for keeping cells cancer-free. Among other functions, the p53 protein either repairs DNA damage or kills cells before they can replicate.

CRISPR creates a double-stranded break in our genomes, typically activating the p53 protein. A healthy cell with a functional p53 protein will not allow CRISPR-edits. Cells that are edited using CRISPR may have a dysfunctional p53 protein, which may heighten a patient’s risk for cancer.

That said, CRISPR’s primary applications are gene disruption and gene insertion. Important to note, gene disruption requires healthy p53, as CRISPR simply slices the DNA and relies on an active p53 to repair the damage. Intellia TherapeuticsNTLA, Editas MedicineEDIT, and CRISPR TherapeuticsCRSP still are using this form of CRISPR-editing for pipeline programs that are entering human trials, a strong indication that this form of CRISPR is unlikely to cause cancer.

  1.  Sources: ARK Investment Management LLC, AAA “Your Driving Costs”
  2.  Sources: ARK Investment Management LLC, https://www.census.gov/data/datasets/2017/demo/popest/nation-detail.html, https://tradingeconomics.com/united-states/wages
  3. The average household makes 1.5 trips to the grocery store per week. Source: https://www.fmi.org/docs/default-source/document-share/fmitrends15-exec-summ-06-02-15.pdf. Productivity loss is calculated using only drive time, not shopping time.
  4.  Source: ARK Investment Management LLC
  5.  Source: ARK Investment Management LLC
  6.  Source: ARK Investment Management LLC


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.

ark-disrupt-banner

ARK Disrupt Issue 129: AI, Blockchain Technology, Autonomous Cars, Robots, and CRISPR COPY

Please enjoy ARK Disrupt Issue 129. 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. ARK Presents on AI Hardware and Blockchain Technology at CogX London 2018

Follow @jwangARK on Twitter

This week ARK presented at CogX, a premier technology conference in Europe focused on artificial intelligence (AI) and blockchain technology. Sponsored by Softbank, CogX attracted more than 7,000 attendees and a wide range of speakers spanning industry (NvidiaNVDA, ARMARMH, IntelINTC), startups (OpenAI, Graphcore, Five.ai), and the VC community (a16z, Lux, Placeholder).

ARK presented on the future of AI hardware, focusing on the competitive evolution of the graphics processing unit (GPU) as more specialized chips have entered the market. In short, while GoogleGOOG, Intel, and a variety of startups have intensified the competition, Nvidia has evolved its GPU architecture rapidly, staying ahead of those promised by new entrants.

ARK alumnus and advisor, now a Partner at Placeholder, Chris Burniske, also presented at the conference. With speakers from Verisart, Pantera, and Oxcert, Chris hosted a panel on blockchain’s potential for tokenizing non-fungible assets.

You can watch James present on AI hardware here, and Chris host the panel on tokenizing assets here.

2. Amazon Is Increasing its Commitment to the Indian Fintech Sector

Follow @bhavanaARK on Twitter

India’s booming fintech market is attracting many international players like WalmartWMT, AlibabaBABA, AmazonAMZN and SoftbankSFTBY.  Amazon, in particular, is becoming serious about the market, competing aggressively to gain market share. Amazon committed $5 billion in 2017 and reupped its investment by $2 billion last week, making it one of the largest foreign investors in India’s digital economy, second only to Softbank.

Recently, Amazon invested in Acko, an Indian digital insuretech firm. Like ZhongAn in China, Acko is entirely digital, giving it a data advantage that translates into lower prices and costs. Acko’s differentiation includes data and insights about its customers, translating into unique products like mobile payments and bike insurance. Amazon’s customers can access Acko insurance with AmazonPay.

Amazon also is carving out a differentiated position in the Indian lending space with its “Seller Lending Network”. Through this intermediary, merchants can apply for loans, check their loan status, and pay by linking their sales to their loan accounts. Amazon has onboarded a number of lenders including Aditya Birla Finance, Bank of Baroda, Capital First, and Yes Bank who can access Amazon’s machine learning programs, making the loan approval process quick and efficient for Amazon.in’s 340,000 merchants.

3. Data Labeling, Not Coding, Could Be Key to Tesla’s Autonomous Car

Follow @skorusARK on Twitter

Tesla’sTSLA Director of AI and Computer Vision, Andrej Karpathy, recently gave a talk on “software 2.0” that is a must-watch for analysts and investors in the autonomous vehicle space. Describing the differences between software 1.0 and software 2.0, he emphasized that software 1.0 requires domain expertise while software 2.0 is much more automated.

In the software 1.0 ecosystem, an engineer designs the algorithm and tests its performance, repeating the process continuously to optimize the algorithm. With software 2.0, a neural net designs the algorithm and optimizes for the desired outcome, with humans responsible for labeling a massive dataset in order to train the neural net.

In the slide below, Karpathy illustrates the change in mindset and workload between software 1.0 (PhD) and software 2.0 (Tesla). The gating factor is data labeling. While software 1.0 requires highly skilled engineers to tweak the code continuously, the software 2.0 ecosystem requires data labeling as opposed to computer science or other sources of expertise. Because software 2.0 is more automated, algorithms evolve as datasets improve over time.

In other words, companies aiming to capitalize on the autonomous vehicle space with software 1.0 probably will hit a wall, improving little beyond that point. Software 2.0 looks like the winner.

ARK Disrupt Issue 129 Graph 1

4. Rolling Robots Could Cut the Cost of Delivering Home Groceries By More Than 90%

Follow @tashaARK on Twitter

Today, Americans spend roughly $50 billion1 driving their personal cars to and from grocery stores, and they lose another $30+ billion2 in productivity and leisure time.3 Rolling robots, such as Starship’s, could cut delivery cost by more than 90%, to $4.5 billion, all other things equal.4

More likely, thanks to the convenience and cost-effectiveness of robot delivery, Americans will place orders more often, particularly for fresh food. If every household in the U.S. were to order just produce daily, robot delivery revenues would scale to $20 billion, and sales of hardware, primarily rolling robots, would total roughly $8 billion.5 If Starship and other delivery robots were to achieve 80% penetration of this market, platform operators for robotic delivery could be valued at about $5 billion in market cap.6

These estimates should prove conservative. For example, rolling robots also could deliver many kinds of packages and perform repetitive tasks in hospitals and hotels.

ARK expects that drones and autonomous vehicles will evolve into many form factors, reshaping the logistics ecosystem in place today completely.

5. Could CRISPR Cause Cancer?

Follow @msamyARK on Twitter

This week, two publications in Nature Medicine hit CRISPR stocks, as some claimed that the study implicated CRISPR-edits as potential causes for cancer. ARK does not believe that these results are a showstopper for CRISPR-based therapeutics.

Sponsored by Karlinska Institute and Novartis NVS, the studies focused on the role of the p53 protein in CRISPR editing. P53 is a protein well-recognized for keeping cells cancer-free. Among other functions, the p53 protein either repairs DNA damage or kills cells before they can replicate.

CRISPR creates a double-stranded break in our genomes, typically activating the p53 protein. A healthy cell with a functional p53 protein will not allow CRISPR-edits. Cells that are edited using CRISPR may have a dysfunctional p53 protein, which may heighten a patient’s risk for cancer.

That said, CRISPR’s primary applications are gene disruption and gene insertion. Important to note, gene disruption requires healthy p53, as CRISPR simply slices the DNA and relies on an active p53 to repair the damage. Intellia TherapeuticsNTLA, Editas MedicineEDIT, and CRISPR TherapeuticsCRSP still are using this form of CRISPR-editing for pipeline programs that are entering human trials, a strong indication that this form of CRISPR is unlikely to cause cancer.

  1.  Sources: ARK Investment Management LLC, AAA “Your Driving Costs”
  2.  Sources: ARK Investment Management LLC, https://www.census.gov/data/datasets/2017/demo/popest/nation-detail.html, https://tradingeconomics.com/united-states/wages
  3. The average household makes 1.5 trips to the grocery store per week. Source: https://www.fmi.org/docs/default-source/document-share/fmitrends15-exec-summ-06-02-15.pdf. Productivity loss is calculated using only drive time, not shopping time.
  4.  Source: ARK Investment Management LLC
  5.  Source: ARK Investment Management LLC
  6.  Source: ARK Investment Management LLC


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.