Startup Cerebras Has Built the World’s Largest AI Chip
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![Screen Shot 2019-08-25 at 9.56.24 AM](https://research.ark-invest.com/hs-fs/hubfs/Screen%20Shot%202019-08-25%20at%209.56.24%20AM.png?width=1000&upscale=true&name=Screen%20Shot%202019-08-25%20at%209.56.24%20AM.png)
Silicon Valley startup Cerebras has built the world’s largest computer chip. About the size of an iPad, the single chip contains 1.2 trillion transistors and is 57x more complex than Nvidia’s flagship V100 GPU.
The size and complexity of today’s microprocessors are constrained by the semiconductor manufacturing process. Because large computer chips have higher defect rates, the largest chips made today are about the size of a stamp, constraining AI applications. To train large neural networks, researchers often have to build supercomputers with hundreds of chips costing tens of millions of dollars.
Cerebras—working in concert with TMSC—has created a process to build a computer chip the size of a silicon wafer. With 400,000 processor cores and 18 GB of memory, the “Wafer Scale Engine (WSE)” has enough computing horsepower to replace an entire rack of conventional GPU servers.
Cerebras’ technology is so exotic that it’s difficult to know how well it will work in practice and how it will impact Nvidia’s $3 billion data center business. The company says it has a handful of customers in trials and promises to unveil performance benchmarks in November.
For a deeper discussion, see James’ tweetstorm.
Square Crypto Hires Bitcoin Developer Matt Corallo
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In March, Square launched Square Crypto, the first open source initiative focused on supporting the Bitcoin network. To express gratitude and support the open source community, CEO Jack Dorsey announced that Square would hire three to four crypto engineers and one designer to work full-time on open source contributions to the Bitcoin ecosystem.
This week, Square Crypto announced its first full-time Bitcoin developer hire, Matt Corallo. A longtime Bitcoin Core contributor and co-founder of Blockstream, Corallo announced that he was leaving Bitcoin research and development firm Chaincode Labs to work full time on open source Bitcoin projects at Square.
Corallo’s past contributions to Bitcoin have been notable, including Bitcoin Improvement Proposal BetterHash, a mining pool protocol designed to increase decentralization, and a rust-Lightning implementation, a full-featured and flexible second layer Bitcoin solution that allows users to build and experiment with the Lightning Network. Access to his Github repository can be found here.
Square’s support for the open source community is aligned with CEO Jack Dorsey’s decision to prioritize open source software and forego short-term profits. Attracting Matt Corallo appears to be validation of Square’s strategy.
Square recognizes that over the long-term Bitcoin’s success should accrue to its benefit. A strong distributed well-funded developer community will be essential to Bitcoin’s long-term success.
Bank Branches Are on The Decline
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Roughly 70% of bankers believe that their financial institutions could not survive without branches, according to the 2019 World Branch Report. They might be surprised, therefore, to learn that bank branches are on the decline in most western countries and are stagnant in developing countries, as shown in the chart below. In sub-Saharan Africa, mobile money accounts seem to be offsetting the slow growth of bank branches.
![Screen Shot 2019-08-25 at 10.42.20 AM](https://research.ark-invest.com/hs-fs/hubfs/Screen%20Shot%202019-08-25%20at%2010.42.20%20AM.png?width=1000&upscale=true&name=Screen%20Shot%202019-08-25%20at%2010.42.20%20AM.png)
In the US, bank branch closures do not seem to making headlines, especially given JP Morgan Chase’s decision to open 400 new branches and a new flagship in New York City. According to JP Morgan’s quarterly filings, however, in the last year the number of Chase branches has dropped from 5,091 to 4,970.
While some customers might enjoy a coffee now and then at a chic bank branch in New York City or elsewhere, Gen Z customers do not seem to be among them. According to a recent PWC study, only 25% of Gen Z survey participants said that nearby branches or ATMs are important in their choice of a bank compared to 70% of Baby Boomers. To attract the younger customer, financial institutions seem to be turning to digital channels.
That said, JP Morgan Chase’s decision to shut down its digital-only bank, Finn, earlier this year and its mobile payments application, Chase Pay, earlier this week seems to suggest that it is struggling to address those young customers.
Apple Card Launched This Week: While the Reviews Have Been Underwhelming, We Are More Optimistic
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One of the most successful credit card launches of all time was JP Morgan Chase’s Sapphire Reserve in 2016. Upon approval, users received points worth up to $1,000-$1,500 in travel credits and an annual $300 travel credit fee. After the successful launch, CEO Jamie Dimon announced that the card would reduce JP Morgan’s profit by $200 - $300 million in the fourth quarter of 2016, suggesting that it had acquired 166,000 new customers for $1,800 per customer.
With the launch of the Apple Card this past week, Google trends data suggests that search interest for the Apple Card has surpassed by far that for the Chase Sapphire Reserve card in 2016. At the end of 2018, Apple had roughly 100 million iPhone users in the US, each of which is eligible to apply for the Apple Card after opening the Wallet app and can be approved in fewer than three minutes. If approved, users can transact immediately. Never have customers been able to apply for a credit card AND use it in fewer than three minutes.
Apple’s acquisition costs per customer are effectively zero because it is not offering any signup incentives or bonuses. Instead, the card incentivizes customers to use the card by offering 2% cash-back on most transactions and 3% back on purchases of Apple products and Uber services.
Apple has entered the credit card industry with a unique offering and compelling acquisition costs.