SMART CITY

Two Sides of the Toronto Sidewalk

Yesterday, Toronto gave Sidewalk Labs the nod to move forward with its proposed waterfront development. It's a pyrrhic victory for Alphabet's tech-driven urban developer, which made concessions to Toronto and whittled down its wishlist.  

The first ask

In June, Sidewalk Labs released a 1,524-page master plan for the "Idea District," its very online neighborhood. The proposed ultraintelligent district would feature always-on sensors scooping up data, autonomous robots completing deliveries underground, and smart garbage cans. 

Sidewalk Labs argues this tech would revolutionize urban housing, mobility, social services, sustainability, and shared public spaces. 

The compromise

Waterfront Toronto, the public agency overseeing the city's waterfront revitalization, is only taking a sip of the Kool-Aid for now. In the renegotiated agreement announced yesterday...

• Sidewalk Labs can develop 12 acres, which is only ~6% of the area it initially proposed. It also won't be the zone's lead developer. 
• Waterfront Toronto gets fair market value for the land, currently appraised at approximately $448 million. 
• Personal data will be stored in Canada. Waterfront Toronto has requested more info on the district's digital governance and data collection practices. 
• The deadline to approve the revised project is March 31.

Sidewalk cracks

Privacy advocates and some Toronto citizens have vocally opposed the project, worried the city is waltzing down the path to panopticon. In China, "smart city" tech is becoming shorthand for surveillance. Cities are deploying AI systems and cameras that can improve public administration and security...but also feed facial recognition and a fledgling social credit system. 

Zoom out: With missions "to organize the world's information" and construct the "city of the future," Alphabet subsidiaries have galaxy brain goals. Sidewalk Labs still has a chance to show it could transform urban living, but it has to start on a watered-down slice of Toronto's waterfront. Still beats the last time Silicon Valley and Toronto went head-to-head (Raptors in 6).

DRONES

You Shall Not Fly

The U.S. Interior Department is grounding its entire drone fleet, the WSJ reported Wednesday. Because all 800+ of its drones were manufactured in China or contain Chinese-made parts, the agency is concerned its fleet might be a national security risk. 

Interior uses the drones to fight forest fires, monitor wildlife, take geological/geophysical surveys, and track volcanic activity. It will make exemptions to the no-fly policy for emergencies, natural disasters, or potential life-or-death situations on federal lands.

This could clip the wings of Chinese dronemaker DJI. The company told the WSJ that DJI owners can opt out of connecting to the internet or sending data to DJI servers. It also said the Chinese government has never requested company data and that it would work with U.S. officials on their review.

Zoom out: Whether it's barring Huawei's 5G networking gear or grounding a fleet of drones, U.S. agencies are firewalling themselves from Chinese hardware. They're spooked it could be a conduit for Beijing-directed espionage or cyberattacks.

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INTERVIEWS

Two for One

Think about the following: 1) The costs of space travel could drop to the point that you or I could try it in our lifetime and 2) Formula 1 cars could race through Times Square. Both sound like science fiction, but a NASA leader and F1 team boss floated the possibilities in separate interviews with me on Wednesday at Nasdaq. 

NASA Chief Flight Director Holly Ridings

Ridings leads the group in Houston directing spaceflight missions, including International Space Station resupplies and commercial partner launches. 

As a decadeslong employee and NASA's first female chief flight director, Ridings has an inside view on all that's changed since humans last went to the moon. We discussed this, as well as what it will take to go back within the next five years. 

Watch the full interview here. 

Mercedes F1 CEO and Team Principal Toto Wolff

Wolff leads the hugely successful Mercedes Formula 1 team. We talked about the role of data and AI in F1 racing, electrification, the sport's contribution to the auto sector, and why autonomous cars can't beat the best human racers. 

We also chatted about F1 expansion plans in the U.S. This weekend, Mercedes drivers Lewis Hamilton and Valtteri Bottas are racing at the Circuit of the Americas in Austin, TX. 

Watch the full interview here. 

BITS & BYTES

Stat: The market for global cloud services grew 37% year-over-year in Q3 to $27.5 billion, per Canalys. AWS is still the top dog by a longshot, but Microsoft Azure's growth outstripped it 59% to 35%.

Quote: "Internet political ads present entirely new challenges to civic discourse: machine learning-based optimization of messaging and micro-targeting, unchecked misleading information, and deep fakes. All at increasing velocity, sophistication, and overwhelming scale"—Twitter CEO Jack Dorsey, announcing his company's ban on political ads.

Read: As AI gobbles up computational power, its carbon footprint is growing. The AI Now Institute looked into the connection and possible policy fixes. 

WHAT ELSE IS BREWING

• China Mobile, China Unicom, and China Telecom—the three state telecoms of...I think you can guess—are switching on the country's first 5G mobile networks today.
• Fitbit announced today that it has agreed to a $2.1 billion acquisition offer from Alphabet. The deal is expected to close next year. 
• DeepMind's video-game-playing AI agent is better than 99.8% of human Starcraft II players.
• NSO Group, an Israeli hacking-for-hire outfit, is being sued by Facebook for allegedly selling WhatsApp vulnerabilities. Yesterday, Reuters reported that NSO client(s) used this spyware to target "high-profile government and military officials" in at least 20 countries.
• Gartner forecasts global wearables spending will jump 27% next year, from about $40.6 billion to over $51.5 billion.

GOING PHISHING

On Fridays, you know the deal: Four of these stories are real, one was lovingly deepfaked. Can you spot the odd one out?

1. Wowzer, a dating app for dog lovers, launched yesterday.
2. Eagles with tracking tags rack up massive data roaming charges. 
3. You can use a new Nvidia AI tool to copy+paste your doge's face on another animal's body. 
4. WeWork is working on an esports division. 
5. SoftBank CEO Masayoshi Son spoke at the Saudi investment summit to "a room at two times capacity." 

THE TECHLARATION

There's nothing like a good newsletter for your ears, which is also known by the less sophisticated nomenclature of "podcast." Here at the Brew, we're avid podcast consumers but, more importantly, we make one called Business Casual.

This week's episode features trenchant trade war commentary from Josh Brown, chairman of the Twitter Federal Reserve and CEO of Ritholtz Wealth Management. You won't want to miss his takes. Listen now on Apple // Spotify // Stitcher.

Have a great weekend, see you Monday—Ryan.

GOING PHISHING ANSWER

Masayoshi Son spoke to an "almost empty room," Bloomberg reported.