July 25, 2023 // Did someone forward you this newsletter? Sign up to receive your own copy here.
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Semiconductor geopolitics
Semiconductors are arguably the most important technology in the world.
Without them, the global economy would slow to a crawl, and we wouldn’t be able to drive in our cars, use our phones, or do our laundry. Because of them, new technologies like artificial intelligence are possible.
If their economic and technological importance wasn’t enough, their geopolitical influence might be even greater. The future of geopolitics will be deeply intertwined with the future of semiconductors.
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The main semiconductor in your smartphone has a circuit with 10 to 20 billion transistors.
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//What are semiconductors?
Semiconductors, or simply chips, are small pieces of silicon that have tiny circuits with transistor switches that flip off and on, enabling semiconductors to conduct and harness electricity for processing power.
Globally there are 100 billion semiconductors in use around the world, in everything from our dishwashers to our nuclear weapons.
The history of semiconductors dates back to the 19th century, but they really began to take off once the transistor was invented in 1947.
The speed of innovation in the semiconductor space is unmatched. Moore’s law observed that the number of transistors on a semiconductor doubles an average of every two years.
//Big things come in small packages
Semiconductors are everywhere.
They power our phones, computers, medical devices, planes, cars, appliances, apps, and increasingly the large language models behind artificial intelligence. Nvidia, a leading manufacturer of semiconductors used for gaming (known as GPUs, or graphics processing units), has reached a $1 trillion valuation based on surging demand for artificial intelligence computing.
Semiconductors have also made our devices dramatically smaller from the days when phones and TVs were comically large, compared to today’s sleek and small standards.
The semiconductor shortage during COVID sent global supply chain shocks around the world, driving up the price of cars (which have an average of 1,500 chips in them), creating bottlenecks, and pushing inflation higher.
OpenAI’s ChatGPT has trained on 10,000 of the most sophisticated chips available, and there is a race for specialized AI chips. Google’s Deepmind is using AI to speed up the design of new chips specifically designed for AI computing.
The supply chain of semiconductors is highly concentrated in just a few companies: A single Dutch firm, ASML, produces all of the world’s extreme ultraviolet lithography machines, which are producing the smallest and most advanced chips.
Last year, the US federal government passed the CHIPS Act, an investment of $280 billion over the next 10 years to catalyze investment in domestic fabs. In 1990, the US made 37% of the world’s semiconductors, but that number has declined ever since. Today, the US manufactures only 12% of the world’s semiconductors.
//Chip geopolitics
We’re entering an era where geopolitical relations between countries like the US and China are increasingly defined by tiny wafers of silicon. Professor Chris Miller of The Fletcher School at Tufts University wrote a book called Chip Wars, which chronicles the rise of the chip industry and the geopolitics of nations trying to outcompete each other for control over the manufacturing and supply chain of semiconductors.
Last year, the US waged an economic war with China by restricting the selling of semiconductors and chip-making equipment to China. It was an attempt to limit dramatically China’s access to critical technologies while also providing a competitive edge for America’s resurgence of domestic chip manufacturing.
China is deeply reliant on American chip technology. “The entire industry can only function with US inputs,” Miller told the New York Times. “In every facility that’s remotely close to the cutting edge, there’s U.S. tools, U.S. design software and U.S. intellectual property throughout the process.” In response, a burgeoning underground market has developed in China for Nvidia chips.
But America—and the rest of the world—is deeply reliant on Taiwan’s chip production, which some consider to be a “silicon shield” against a Chinese invasion, where global powers would have an incentive to step in to prevent any fabs from being incapacitated or controlled by the Chinese.
Underneath the geopolitics of semiconductors is a battle for technological primacy and self-sufficiency in the age of AI.
Building the next generation of the web—whether that’s interoperable social media or better data privacy or less polarized digital spaces—requires the underlying computing power to enable us to log on and participate. Semiconductors are the fundamental technology underneath it all, and the technological, economic, and political stakes are only getting higher.
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Other notable headlines
//📞 The internet offers many new ways to communicate, but nothing can beat the good old 10-digit phone number. An article in The Atlantic offered an homage to the phone.
//🪃 Luke Hogg and Lars Schönander from the Foundation for American Innovation co-authored a piece for Tech Policy Press on Meta’s interoperable reversal: "Why is a company that has historically opposed interoperability suddenly embracing open source protocols?"
//🦕 An article in Noema Magazine explored how focusing on the prospect of human extinction by AI in the distant future could prevent us from addressing AI’s disruptive dangers to society today, like deepfakes, privacy issues, and its environmental impact.
//🧵 According to an article in the Wall Street journal, data show that user engagement on Meta’s new Threads app has fallen by 70%, even while executives add new features to keep people on the platform.
//🇫🇷 An article in Politico highlighted how the 2024 Summer Olympics will feature a surveillance state which Paris has spent 200 years building. According to a French activist, “Whenever there’s a security issue, the first reflex is surveillance and repression.”
//💾 Internet users have little control over their data and are unable to transfer data between services. An article in Tech Policy Press outlined a detailed case for why the future of the internet needs to be designed to optimize data portability.
//🤖 Meta’s newest AI model is free and accessible to everyone. The company hopes that making LLaMA 2 open source might give it the edge over rivals like OpenAI, according to an article in MIT Technology Review.
//🕵 OpenAI, Google, and seven other companies have committed to watermark AI-generated content to hinder deepfakes, limit the spread of misinformation, and improve AI safety, according to an article in Ars Technica.
//🚸 Stanford’s Internet Observatory Cyber Policy Center discussed a new report that found how an increasingly decentralized social media landscape offers users more choice, but poses technical challenges for addressing child exploitation and other online abuse.
Partner news & opportunities
// Open-source investigative research tools from Bellingcat
Bellingcat compiled a list of open-source investigative research tools for journalists and researchers looking to uncover the truth. The toolkit includes satellite and mapping services, tools for verifying photos and videos, websites to archive web pages, and more. Learn more here.
// Report on the costs of social media usage for schools
Fairplay for Kids, with partner organizations Design It For Us, Parents Together Action, APA, and AFT, has released a report, Likes vs. Learning, The Real Cost of Social Media for Schools, which describes what social media platforms must do to protect kids in schools. Read the report here.
/ Project Liberty is a advancing responsible development of the internet, designed and governed for the common good. /
