www.exponentialview.co Exponential Convergence Azeem Azhar,
@azeem impact & discussions

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www.exponentialview.co 0 125 250 375
500 2007 0 225 450 675 900 1125 2017 Source: Bloomberg, Form 10-K, 2017 The age of technology

www.exponentialview.co 2027? Source: Bloomberg, Form
10-K, 2017 The age of technology 0 225 450 675 900 1125 2017 What does the world look like in a decade and beyond?

www.exponentialview.co The Cycle of Tech
Revolutions 1770 1820 1870 1920 1970 2020 INNOVATION CANAL MANIA GREAT BRITISH LEAP The Industrial Revolution RAILWAY MANIA VICTORIAN BOOM Age of steam and railways GLOBAL INFRA. BUILD BELLE EPOQUE PROG. ERA Age of steel and heavy engineering THE ROARING 20s POST-WAR GLOBAL AGE Age of oil, autos and heavy production DOTCOM & INTERNET MANIA THE KNOWLEDGE AGE The ICT revolution

www.exponentialview.co The economy will continue
to switch to intangibles with broad implications Sunk cost investments Highly scalable, winner-take-all plays Spillovers (which includes copying) Synergies (partnership approaches, internal culture) Source: Haskel, Westlake, author analysis Suggests a “venture capital”, startup building model

www.exponentialview.co Exponential change in technology
inputs 59% 50-60% 37% 29% A technology which improves at 10%+ every year at a fixed cost Moore's Law Kryder's Law Keck's Law Hendy's Law LiIon battery 19-20%

www.exponentialview.co Positive feedback drove the
PC dividend CPU OS quality Increased capability Software Reduced performanc e Greater sales • Major winners (Intel, Microsoft) • New industries (PC, peripherals, networking, software, video games) • Impact on other industries (computerisation)

www.exponentialview.co
2007
2017

www.exponentialview.co YouTube Facebook Netflix (US)
US online retail Internet advertising Smartphone installed base Amazon Echo Blockchains Data created annually 200 MAU 1.5bn MAU 7x 69m users MAU 2bn MAU 30x 0 175m minutes/month ∞ $140bn $400bn 2.9x $21bn $73bn 3.5x 250m 3bn 12x 0 10m US households ∞ $0 $150bn ∞ 0.1 ZB 20 ZB 200x A decade of exponential change 2007 2017

www.exponentialview.co Apple Watch >> Cray
2 ROOM 1.9Gflops/2.5t $35M 1985 POCKET 1.7Gflops/420g $434 2010 2015 WRIST >3Gflops/125g $349

www.exponentialview.co Moore's Law and beyond
Source: Nvidia Investor Day Presentation, 2017 CUDA introduced

www.exponentialview.co Beyond GPUs to dedicated
ML silicon Source: Nvidia Investor Day Presentation, 2017 Dedicated ML (Google, Graphcore) (10-1000x improvement on current GPUs for deep learning promised) Driven by massive computer demand for artificial intelligence which is the software glue binding services together

www.exponentialview.co There is a convergence
of exponential tech 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 $100M $10M $1M $100K $1K COST PER GENOME Source: National Human Genome Research Institute, 2017

www.exponentialview.co There is a convergence
of exponential tech MARKET VALUE AND SHIPMENTS OF CMOS SENSORS 0 4 8 12 16 0 1.5 3 4.5 6 7.5 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 MarketValue($B) WorldwideUnitShipment(B) Source: IC Insights 15% CAGR

0 5000 10000 15000 20000
25000 Sept '15 Oct '15 Nov '15 Dec '15 Jan '16 Feb '16 Mar '16 Apr '16 May '16 Jun '16 Jul '16 Aug '16 Sep '16 Oct '16 Nov '16 Dec '16 Jan '17 Sep '17 14 130 950 2000 5191 7053 Voice: a new computing category EST 8M UNITS SOLD IN 1ST 2 YEARS (100% CAGR) NUMBER OF ALEXA SKILLS Untitled 1 Source: Voicebot.ai, 2017 20K www.exponentialview.co

Blockchains: a new category %
of total market cap Nov 2013 - Nov 2017 $198bn Source: CoinMarketCap.com www.exponentialview.co

The most powerful computer Hash
rate, TH/s = 1,000,000,000,000 hashes/sec Source: blockchain.info 3.5x10^22 FLOPs* May 2017Jan 2016 5,000,000TH/s *Source: https://steemit.com/cryptocurrency/@dutch/cryptocurrency-the-wasted-potential-of-the-hash **Source: https://en.wikipedia.org/wiki/Sunway_TaihuLight 9.3x10^16 FLOPs** #1 supercomputer 7x www.exponentialview.co

www.exponentialview.co 0 20 40 60
80 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Connecteddevicesinbillions There is a convergence of exponential tech NUMBER OF CONNECTED DEVICES Source: Statista, 2017 17% CAGR

www.exponentialview.co There is a convergence
of exponential tech LITHIUM-ION BATTERY PRICE FORECAST 0 200 400 600 800 1000 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 ESS lithium-ion demand EV lithium-ion demand BNEF observed values 19% learning rate Source: Bloomberg New Energy Finance, 2017 Battery prices ($/kWh)

www.exponentialview.co There is a convergence
of exponential tech LITHIUM-ION BATTERY PRICE FORECAST 0 200 400 600 800 1000 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 ESS lithium-ion demand EV lithium-ion demand BNEF observed values 19% learning rate Source: Bloomberg New Energy Finance, 2017 Battery prices ($/kWh) 26/2/2018

www.exponentialview.co There is a convergence
of exponential tech MARKET VALUE AND SHIPMENTS OF CMOS SENSORS 0 4 8 12 16 0 1.5 3 4.5 6 7.5 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 MarketValue($B) WorldwideUnitShipment(B) Source: IC Insights 15% CAGR

Convergent exponential feedback loops
www.exponentialview.co

www.exponentialview.co Value is created faster
than ever before 0 2 4 5 7 9 11 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Yearsto$1bnvaluation • Docusign • Shopify • Palantir • Facebook • Whatsapp • Spotify • Twitter • Evernote • Dropbox • Box • Tumblr • Mongo DB • Cloudera • AppNexus • Pinterest • Airbnb • Uber • Stripe • Instagram • Square • Snapchat • OculusRift • Slack NUMBER OF YEARS TO REACH $1BN VALUATION FROM THE FOUNDING DATE Source: GartnerSYM, 2016

www.exponentialview.co These feedback loops create
non- linear results that are hard to predict 1 3 6 9 14 18 25 0 7.5 15 22.5 30 2011 2012 2013 2014 2015 2016 2017 $Bn ALIBABA Singles Day SALES 77% CAGR 120 66 90

The rate of change is
increasing Deployment of new consumer propositions is happening faster than ever before Source: Horace Dediu, Personal Correspondence www.exponentialview.co

www.exponentialview.coSource: Horace Dediu, Personal Correspondence
Deployment of new consumer propositions is happening faster than ever before

www.exponentialview.co ML compute meets IOT
illustrative to 2028 17% CAGR 50% CAGR c. 60x over ten years c. 5x 300x IOT compute Value creation Apps? Systems? Infrastructure? Business models? 2nd order effects Power utilisation Network usage Data creation Security?

www.exponentialview.co Super hard to predict:
learning rates, positive feedback loops Total EVs on the road

www.exponentialview.co AI, automation and new
business models will restructure work. How will economies adapt? Which economies & workforce can adapt to the changes? European model? High trust High education levels Strong safety nets Greater institutional mechanisms for worker / firm dialogue US model? Business-centric Highly agile, lower friction Market mechanisms Automation Broad automation, leading to widespread job displacement Platformisation of work Increasing use of ‘thick platforms’ to orchestrate ‘free lance work’ vs traditional jobs 42m (3x by 2020) Americans freelancing 800m global job changes by 2030 (McKinsey) 375m workers needing to retrain (McK) of which

www.exponentialview.co What will the next
decade hold? Source: EV analysis 100x 5x 10x 10-20x 10+ x 1000x ?

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