Severing the Link: Cutting Ties with China

“We had to destroy this town to save it.” [Gilder's Daily Prophecy] November 4, 2019 [ARCHIVES]( | [UNSUBSCRIBE]( IMPORTANT CHANGE IN OUR BUSINESS [Selfie of James Altucher](We just made [this important change to our business](… And if you’re seeing this, then [this change]( needs your immediate attention… Because YOU may be affected by this opportunity! [Click here for the full details](. Severing the Link: Cutting Ties with China [George Gilder]Dear Daily Prophecy Reader, I know my faithful readers are eager to hear my reactions to the new “national security threat” alleged from the Chinese artificial intelligence (AI) video app: TikTok. But first, I want to tell you more about the COSM — our technology summit last month outside Seattle. Among many high points, several Mount Rainier moments stand out a week later. And I’ll get to the TikTok threat soon enough. First, I recall Microsoft’s former Chief Technical Officer Craig Mundie’s report of a major AI breakthrough just a month ago in mastering the exquisite complexities of protein folding. This advance opens the way to huge biotech gains in custom-built protein molecules adjusted for particular people with particular needs or diseases. It is the most significant biotech invention since the complementary CRISPR method for editing strands of DNA. Our biotech portfolio companies from Matt Scholz will benefit, as will the entire industry. Despite many perplexities, the progress here continues to accelerate. A second COSM memory is Michael Kratsios, the White House Chief Technical Officer. A bold Trump appointee from Peter Thiels’ investment team, Kratsios is an impressive figure. But in a week when Xi Jinping in China heralded advances in blockchain, Kratsios failed even to list this crucial security tool among key technologies being promoted by the Administration. Instead, he wanted us to celebrate Google’s claimed achievement of “quantum supremacy.” What you can say about quantum computing — beyond the point that it is a way overhyped version of analog computing — is that the most interesting advance happened in China. That was the sending of quantum entangled messages between satellites by a team headed by Pan Jianwei, with the help of his mentor, Austrian physicist Anton Zeilinger. But the discussion on China and Huawei doesn’t stop there… Gilder: “This Reboot Could Make You Rich” [James Altucher with pot leaves over his eyes](A [wealth revolution]( is coming. And it could make you very… very… rich. That’s the latest forecast from the man they call “America’s #1 futurist”… “Wall Street’s most influential technology trader”… and “a true American genius.” How so? “We’re headed for a potential $16.8 trillion reboot,” he says. “Nobody will remain untouched. And a few early investors could walk away with millions.” [Click this link to find out more…]( The Hackable Internet Architecture Deeming the universe an omniscient quantum analog computer that calculates everything instantly, analog computing is a way to shift the burden of computation from processing bits to input-output. The focus becomes the framing of the questions or algorithms — essentially prayers — and reading the answers. At best, the quantum computer is a special-purpose analog device. Google’s advance is a stunt rather than a technology. Physics departments everywhere benefit from the quantum computing campaign, which gives their students a new framework for their studies. But the temptation to treat this endeavor as a national security grail or even crisis suggests why governments should not control technology. They are too gullible and subject to fashions. Kratsios should know better. But he may not. Responding to my question regarding possible cooperation with the Chinese telecom colossus Huawei, he declared that Huawei routers in future 5G networks pose a threat to “every American family.” This unlikely story reveals an imprudent extension of “weapons-of-mass-destruction” rhetoric formerly reserved for nuclear weapons and bio-war toxins to useful network gear managed by US telcos. Are these companies so feckless that they can’t control their equipment? Why can’t they make a deal with Huawei that renders its technology transparent and testable as Huawei chief Ren Zhengfei proposes? Regardless of whose routers are installed, the current internet architecture is hopelessly hackable, with some billion breaches in 2018. No one trusts it. The available new security architecture for the internet is based on blockchain, and its promise was discussed at length at COSM and by Chinese Chairman Xi 10 days ago. Perhaps the Administration should look into it, rather than suppress blockchain advances through the Securities and Exchange Commission (SEC) rulings against such promising companies as the Telegram Online Network. A start for a new internet is the COSM system proposed by telco visionary Dan Berninger, now working with Intel, and internet-legend Giuseppe Gori. This is a new generation blockchain that scales to Visa card transaction speeds while offering “super-connectivity” through advanced forms of Wi-Fi enabled by 5G. It is based on replacing the vulnerable IP address system with global public key addresses linked to private key device identities. By now you’re probably wondering — what does all of this and an unstable internet infrastructure have to do with TikTok? Let me tell you… TikTok: A Threat to National Security? Confronting at once the two great hacking threats — the hacking of the internet by saboteurs and the hacking of monies by Central Banks — new forms of blockchain will be a constant technology theme of the year 2020. Kratsios should take notice. Hey, it’s a leap, but you can call it “quantum computing” if you like. Instead, in a rare bipartisan chorus, the US government seems to be mobilizing massively against the menace of TikTok. Hypersensitive Senators, led by the estimable Marco Rubio, see a “national security threat” in this silly video app from the Chinese AI company Bytedance, a unicorn seeking an Initial Public Offering (IPO). The Senators have noticed again that the Chinese Communists don’t allow free speech about their many foibles and that TikTok collects data from its customers. According to bipartisan heavy-breathing Senators Tom Cotton and Chuck Schumer this app “may pose serious risks to millions of Americans.” Gosh. Where do you start? US Senators seem eager to break off all trade with China (with waivers perhaps for farm goods crucial to Iowa Democrats). China buys some $11 billion worth of US microchips and Taiwan (which is not a county in California), makes the most advanced seven-nanometer devices at TSMC. For example, they provide CPUs for the new iPhone 11. Thus, cutting off commerce in chips on grounds of national security would bring down much of the US high technology sector in the process. The sharp downside surprise at chip pioneer Texas Instruments (TI) is a portent of the danger to America’s technology. Silicon Valley is getting systematically dismantled by the US government. Rising bipartisan themes are “Down with Google and Facebook,” and ban Intel from China — where the Santa Clara (and Israeli) colossus makes most of its chip sales. Somehow Intel chips in Huawei gear do not compensate for Huawei compression algorithms in 5G routers. It’s a mystery. But as Silicon Valley deteriorates, we will no doubt soon be informed by the Pentagon that “we had to destroy this town to save it.” Regards, [George Gilder] George Gilder Editor, Gilder's Daily Prophecy P.S. I hope you’re enjoying my Daily Prophecies. In my newsletter The George Gilder Report I explore paradigms and the companies best poised to profit. For a small fee, you can gain complete access to all of my past, present, and future research. [Click here to learn more.]( [YOURS FREE!] Claim Your FREE Startup Investing Guide [Startup book]( All you need is a tiny stake in one explosive startup… And your life may never be the same again. Like Lyft, which exploded an unprecedented 416,566%... Pinterest, which took off an extraordinary 713,080%... Or Uber, which skyrocketed a rare 1,089,300%. But how do you find the next big startup… The one that’s set to explode into the next household name in the coming months and years? 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