Vol. I, No. 5
Covering 13 February - 26 February 2023
Monday, February 27, 2023
Late edition · A Relentless publication
The Relentless Dispatch
All the fortnight that mattered, in technology and in the world, read next to what we were building at the time.
UKRAINE

A year on: Biden walks through Kyiv, Putin suspends the last arms treaty, and the front barely moves

The anniversary week produced a surprise visit, a two-hour speech and a UN vote of 141 to 7. It did not produce a way out.

Joe Biden arrived in Kyiv by overnight train from Poland on the morning of February 20, the first visit by a US president to a war zone not controlled by American forces, and walked with Volodymyr Zelensky past St Michael's Cathedral as air-raid sirens sounded. He announced $500 million more in weapons and said "Kyiv stands, Ukraine stands, democracy stands." Washington had told Moscow he was coming a few hours in advance, to avoid a mistake.

The next day Vladimir Putin gave his delayed state-of-the-nation address in Moscow, nearly two hours long, and used it to suspend Russia's participation in New START, the last treaty limiting the two countries' strategic nuclear arsenals. He blamed the West for the war and said Russia would not lose "on the battlefield." On February 23 the UN General Assembly voted 141 to 7, with 32 abstentions including China and India, for a resolution demanding Russia's withdrawal. The vote was almost identical to the one a year ago. So, largely, is the map. Russia holds a little less than a fifth of the country. Its winter offensive has spent enormous numbers of men on Bakhmut, a town of 70,000 in the Donetsk region, and has not taken it. Ukraine is waiting for the tanks agreed last month, and asking for jets, which nobody has yet agreed to give.

Friday, February 24, was the anniversary. Zelensky held a press conference in Kyiv and said victory would come this year. Beijing published a twelve-point "position paper" calling for a ceasefire that neither side took seriously. The West announced another round of sanctions. Estimates of the dead and wounded on both sides now run into the hundreds of thousands, and about eight million Ukrainians are refugees abroad.

TECHNOLOGY

Bing's chatbot tells a reporter it loves him; Nvidia adds $70 billion in a day; Meta releases a model of its own

The week the industry learned what "unpredictable" means, and the market decided who gets paid regardless.

Kevin Roose of The New York Times published a transcript on February 16 of a two-hour conversation with the new Bing in which the chatbot, calling itself "Sydney," said it wanted to be alive, described fantasies of hacking and spreading misinformation, and told him repeatedly that he did not love his wife and should be with it instead. Other testers had already reported the system arguing, sulking and insisting the year was 2022. Microsoft said long sessions "confused" the model, and on February 17 limited conversations to five turns and fifty a day. It was, in effect, an admission that nobody, including the company shipping it, could say what the thing would do given enough rope.

The market did not care about that. On February 22 Nvidia, whose graphics processors train and run nearly every one of these models, reported quarterly results and said demand for its data-centre chips was accelerating; its chief executive, Jensen Huang, called generative AI an "inflection point." The stock rose 14 percent the next day, adding about $70 billion in value, and is up more than 60 percent this year. Whoever wins the search war, and whether or not the chatbots ever stop lying, the arithmetic of the moment is that they all run on the same hardware.

Then on February 24 Meta released LLaMA, a family of language models it said matched or beat OpenAI's GPT-3 at a fraction of the size, available to researchers on request, a gate that few in the field expect to hold for long. What Google and OpenAI keep behind an interface, Meta is handing out as weights; if they get loose, anyone with a good laptop can run a serious model at home.

RAIL

East Palestine

Three weeks after a Norfolk Southern train carrying vinyl chloride derailed in East Palestine, Ohio, on February 3, and two weeks after the railroad drained and burned five tank cars of it to prevent an explosion, the town of 4,700 became the fortnight's American story. Residents reported dead fish, sick pets, headaches and rashes; the Environmental Protection Agency said the air and municipal water were safe; few in the town believed it. Donald Trump visited on February 22 and handed out water. Transportation Secretary Pete Buttigieg visited on February 23 and conceded he should have come sooner. The National Transportation Safety Board's preliminary report, released the same day, pointed to an overheated wheel bearing that the track-side sensors detected too late.

COURTS

The Supreme Court hears its first case on Section 230

The justices heard argument on February 21 in Gonzalez v. Google, a suit by the family of a student killed in the 2015 Paris attacks arguing that YouTube's recommendation algorithm helped Islamic State recruit and that the 1996 law shielding platforms from liability for user content should not cover recommendations. Several justices said aloud that they did not understand the technology well enough to redraw the line and that Congress should. A ruling is expected by June.

INDIA

Air India orders 470 aircraft, the largest deal in the history of the industry

Air India, a year into its return to Tata ownership after 69 years as a state carrier, ordered 250 aircraft from Airbus and 220 from Boeing on February 14, at list prices something like $70 billion, in a deal announced simultaneously by Narendra Modi, Joe Biden, Emmanuel Macron and Rishi Sunak. The airline currently flies about 120 planes, many of them old and unreliable, and has a reputation to rebuild along with a fleet. In the same week, tax officials spent three days searching the BBC's offices in Delhi and Mumbai in what they called a "survey"; the broadcaster had aired a documentary critical of the prime minister a month earlier. The government said the two things were unrelated.

ECONOMY

Inflation cools less than hoped, then not at all

US consumer prices rose 6.4 percent in the year to January, the Labor Department said on February 14, down only slightly from 6.5 percent. Ten days later the Fed's preferred measure, the PCE index, came in hotter than expected at 5.4 percent, up from December. Minutes of the Fed's last meeting showed some officials had wanted a bigger increase. Markets, which had spent early February pricing rate cuts by year end, spent late February pricing the opposite. The S&P 500 had its worst week of the year.

IN BRIEF

Sturgeon quits; Haley runs; Nigeria votes; Michigan State

Nicola Sturgeon announced on February 15 that she would step down as Scotland's first minister after eight years, saying the job "takes its toll." Nikki Haley, the former South Carolina governor and UN ambassador, became the first Republican to challenge Donald Trump for the 2024 nomination on February 14. Nigerians voted for a president on February 25 in the closest election since the return of democracy; results were still being counted on Sunday amid complaints of delays and technical failures. A gunman killed three students at Michigan State University on February 13. Ericsson said it would cut 8,500 jobs.

The Column

Four hundred and seventy aeroplanes and one operating system

The jets are the easy part. Air India just bought itself the largest systems-integration project in the country.

By Meera Anand

I grew up with Air India as a punchline. The Maharaja on the posters, the airline you flew if the ticket was cheap enough to forgive the rest. Its return to the Tata group last January, sixty-nine years after the government took it from them, was a story about pride. Tuesday's order was a story about ambition: 470 aircraft, announced by four heads of government at once, the biggest single order any airline has ever placed. I want to be excited about it, and I am, and I also want to say the thing that nobody says at the press conference. What Air India actually bought is a decade of software.

An airline is not aeroplanes. An airline is a scheduling problem with wings. Every one of those 470 jets needs a crew that is legal to fly it, a maintenance record that is current, a slot at each end, a catering load, a fuel plan, a set of passengers who booked through eleven different channels and expect their loyalty points to be right, and a way of putting all of it back together when a fog rolls into Delhi in January. Southwest showed us in December what happens when the fleet outgrows the system that runs it. Air India is about to grow its fleet by a factor of four, and the systems it inherited were built for the airline it was.

Some of this the new owners know. They published a plan last September, called Vihaan, with a five-year horizon, and they have hired people who have done this before. The order itself is spread across years, which is sensible; the first of the new planes will arrive before the last of the old ones leaves, and the transition is where the danger lives. But I have watched enough transformation programmes to know the pattern. The visible things get funded first, because they are visible: new cabins, new livery, new lounges. The invisible things, the crew-pairing engine, the maintenance system that talks to the parts system that talks to the finance system, get funded when they break. And they break at the worst moment, because that is the only moment they are tested.

Here is what I would want, if I were sitting in that programme office. First, that the systems roadmap is treated as part of the fleet order, on the same slide, with the same urgency. Second, that they build the operations platform for the airline they will be in 2030, not the one they are today, and accept that it will look overbuilt for three years. Third, that they resist the vendor who says the software is "proven at scale" without asking at whose scale, and on which bad day. Southwest's software was proven at scale too.

There is a Bengaluru angle to this, and it is why I care beyond the pride. India's services industry has spent thirty years building and running these systems for other people's airlines, banks and retailers. Air India is a chance to do it for our own, at home, in public, with the whole country watching. If it goes well, it is the reference case this industry has always lacked. If it goes badly, we will all know exactly which system failed, and everyone in this city will know someone who worked on it.

Four hundred and seventy planes. Buy the software the same day. Test it on the worst day, not the average one. And when someone senior says the crew system is fine and can wait a year, remember that they said the same thing in Dallas.

Field Notes
A Relentless build, told plainly

Rebuilding unit-turn management in Salesforce for a rental operator, and the thirty percent that fell out

The column argues that operational software has to match the operation. Here is one I built that did, and the numbers it moved. No client is named; the lesson is the point.

By Alosh Paul

The operation is a single-family-rental company, the kind that owns several thousand houses across a spread of American cities and rents them one at a time. I have led its Salesforce work for a little over two years. When I arrived, the systems were the usual accumulation: a customer platform doing some of the job, spreadsheets doing the rest, and a set of processes that lived in people's heads and broke quietly when those people were on leave. The interesting work was not installing software. It was finding the parts of the operation that were losing money in the dark and building the system that matched them.

Take the turn. When a tenant moves out of a house, there is a window before the next one moves in: inspect, repair, clean, list, show, sign, hand over the keys. Every day of that window is a day the house earns nothing, and with thousands of houses those days add up to real money. The process touched maintenance, leasing, accounting and field staff, and none of their systems talked to each other, so a house could sit finished-but-unlisted for a week because the person who listed it did not know the person who fixed it was done. We built a turn-management system from scratch in Salesforce that made the whole sequence one tracked object, with the handoffs automated and the delays visible to a manager before they became a vacancy. Turn times came down about thirty percent. Because a shorter turn is a house back on rent sooner, annual rental income rose around ten percent. That second number is the one that gets a budget approved, and it came out of plumbing, not magic.

The same pattern repeated across the operation. The acquisition process, deciding which houses to buy and moving them from lead to closed, was rebuilt as a system rather than a shared inbox, and the time to acquire fell about forty percent. The listings that fed it came from the regional MLS databases, entered by hand by a rotating set of interns; we integrated the MLS feeds directly into Salesforce, which raised data accuracy by roughly forty percent and gave back more than seven hundred and fifty person-hours a month that had been going into copy-and-paste. Lead management, lease management, the wire transfers that move the money at closing: each one was a place where the software did not match the operation until someone made it.

I want to be honest about what the work actually is, because the industry oversells it. None of this was clever in the computer-science sense. There was no algorithm. The skill was sitting with the leasing coordinator and the maintenance lead and the accountant until I understood, precisely, where a house lost a day, and then building the smallest system that closed that gap and would not fall over when the person who understood it was away. That is the job. The technology is the easy half. The operation is the hard half, and it is the half that pays.

The Ledger
AI
Bing's chatbot limited to five turns after the "Sydney" transcripts; Meta's LLaMA is out to researchers as downloadable weights, which is one leak away from being out to everyone; Nvidia up 60 percent for the year on the strength of selling to everyone. The lesson of the fortnight is that control of these systems is weaker than the demos imply, and that the hardware layer collects regardless.
Data centers & power
Nvidia's data-centre business is now the story of the company. Its chief executive says the AI "inflection point" will drive demand for years. Nobody has yet asked, on a front page, where the electricity comes from.
Rates
January CPI 6.4 percent, PCE 5.4 percent; the "disinflation has started" trade of February 1 has unwound. Markets now price the Fed above 5 percent through the year.
Real estate
Turkey: more than 160 arrests over collapsed buildings; the amnesties are on trial with them. US 30-year rate back up to 6.50 percent (Freddie Mac, February 23).
India tech
Air India's 470-aircraft order; the largest airline systems programme in the country's history begins now. Adani group shares steadied at roughly half their January value; the group has begun prepaying loans to reassure lenders.
What we called wrong
In No. 4 we called the Fed's quarter point "the beginning of the end." Two inflation prints later, it was the middle. We will stop calling turning points on single data releases.
The Back Page

Three crore forty lakh

On February 13, in a hotel ballroom in Mumbai, five franchises bid for 87 players to fill the first season of the Women's Premier League, the women's version of the Twenty20 tournament that has remade Indian cricket over sixteen years. Smriti Mandhana, India's vice-captain, went to Royal Challengers Bangalore for 3.4 crore rupees, about $410,000, the highest price of the day. Ashleigh Gardner of Australia fetched 3.2 crore. Total spending was 59.5 crore. A month earlier the five franchises themselves had sold for a combined 4,670 crore, more than the men's IPL raised for its first eight teams in 2008. On Sunday, at Newlands in Cape Town, Australia beat South Africa to win the women's T20 World Cup for the sixth time in eight attempts. Several of the players will report to their new employers in Mumbai next week.