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ARK Disrupt Issue 89: Autonomous Vehicles, Battery Packs, Bitcoin, Blockchain, and CRISPR

Please enjoy ARK Disrupt Issue 89. 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. 

1. Competition Heats Up In The Autonomous Vehicle Market

This week, the Atlantic published an in depth piece on GoogleGOOG Waymo’s private autonomous car simulations and real world driving tests. In 2016, Waymo simulated 2.5 billion autonomous miles and drove about 3 million miles in real world driving tests.

As the Atlantic piece points out, Google has more competitors today than when it first started its autonomous car project in 2009.  Google is testing 25,000 virtual cars, roughly the number of real world vehicles that TeslaTSLA sells in a single quarter. In comparison, with data from its customers’ cars, Tesla trains its autonomous systems on both accidents and near-accidents, creating a competitive advantage over Google and others aspiring to autonomous vehicle networks.

That said, Google’s test cars can travel 5,000 miles on average without any human help, a feat that competitors have yet to replicate. In response, Tesla’s CEO Elon Musk aims to improve its Autopilot functionality, enabling a fully autonomous journey totaling 2,800 miles from New York to LA – across regions, roads, and weather – by the end of this year.

2. Chevy Bolt’s Battery Flaw Highlights the Importance of Battery Pack System Management

Last week, GMGM notified Chevy Bolt customers about a potential flaw in its batteries, something it surfaced through its OnStar data analytics system. Interestingly, it concluded that “the remedy is to replace the entire battery pack, even if only one cell is faulty.”

Clearly, the importance of battery system management is critical if GM’s answer to a single cell failure is to replace an entire battery pack which costs 20-30% that of the vehicle.  While GM claims that less than 1% of Bolts have been impacted, we will be watching for other electrical engineering problems.

3. Bitcoin Mining Giant Bitmain Is Planning to Enter the Deep Learning Chip Market

Deep learning chips seem to be debuting every week. This week’s announcement comes from none other than Bitmain, the famed producer of bitcoin mining chips domiciled in China. ARK estimates that the deep learning chip market will be worth $5-9 billion over the next five years.

Having designed processors for mining both bitcoin and litecoin in recent years, Bitmain has solid semiconductor chips. Built on TSMC’s 16nm process, its BM1387 chip controls over 50% of the global bitcoin mining market.

That said, deep learning processors may prove to be a bigger challenge for Bitmain. Unlike bitcoin mining, deep learning is powered not by one algorithm but by a class of algorithms.  High performance requires unique insights into many deep learning applications, most of which reside with AI experts like Google, BaiduBIDU, and NVIDIANVDA.

On the hardware front, Bitmain’s 20 mm² bitcoin mining chip is only 2% the size of NVIDIA’s 815 mm² Volta deep learning chip. Bitmain’s challenge will be to design chips of far greater size, complexity, programmability, and power consumption, which we do not underestimate given the Chinese government’s determination to enter this space.

4. Will Blockchain Help Walmart Perfect Food Supply Chain Management?

Known for its innovation in inventory management, WalmartWMT took another step forward this week, announcing that it had teamed up with IBMIBM and other food manufacturers to explore blockchain technology in food supply chain management. Built on IBM’s blockchain platform, Walmart also is collaborating with Kroger, Dole, Driscoll’s, Golden State Foods, McCormick and Co., McLane Co., Nestle, Tyson Foods, and Unilever.

According to the CDC, each year approximately “1 in 6 Americans gets sick by consuming contaminated foods or beverages.” Vice President for Food Safety, Frank Yiannas, commented that Walmart envisions a “fully transparent food system” with the aim of pinpointing contaminated food almost instantaneously. The technology will enable interoperability among farmers, processors, distributors, and sellers.  As Yiannas noted, blockchain will put all the stakeholders on the same page.

5. Will CRISPR Herald Do-It-Yourself Genome-Editing?

Former NASA synthetic biologist, Josiah Zayner, founded “The Odin,” a company that encourages unregulated, decentralized bio-hacking using CRISPR do-it-yourself (DIY) kits. According to Zayner, scientific advancement should not be limited to those holding PhD degrees. With CRISPR, he believes that the average consumer can and should participate in the advancement of science.

With approximately $150, someone with little background in science can order a CRISPR lab kit and genetically modify yeast which will resist a chemical called streptomycin. Others can use the kit to brew glow-in-the-dark beer.

With DIY CRISPR, scientific breakthroughs are sure to accelerate at an unprecedented rate. Currently, DIY kits are in such high demand that The Odin is unable to satisfy all requests. That said, safety concerns should proliferate as well. Brewing CRISPR beer certainly seems harmless, but another CRISPR application could be bioterrorism!


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.

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