Vol. II, No. 27
Covering 18 December - 31 December 2023
Monday, January 1, 2024
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.
THE YEAR

2023: the year the machine learned to talk, three banks fell, and two wars redrew the map

A year ago a chatbot was a novelty. It ends the year as an industry, a labour dispute and a law. Around it, the world got harder to read and easier to burn.

The year that closes tonight will be remembered, above all, as the year artificial intelligence stopped being a curiosity and became the central fact of the technology world and a growing part of everyone else's. It opened with ChatGPT a month old and a million users deep; it closes with GPT-4 and its rivals in hundreds of millions of hands, a $10 billion Microsoft investment, the near-destruction and rescue of the leading lab over a single weekend, Hollywood on strike partly over the technology, and the first real laws, from Brussels to Washington, written to govern it. The gap between a technology arriving and the world responding to it, usually measured in decades, was measured this year in months.

It was also a year of hard news that kept the technology in perspective. Three American banks failed in the spring, Silicon Valley Bank in a day, and the run happened not in a queue but in a group chat. Two wars dominated the world's attention and conscience: Russia's grinding on into a second year, and a catastrophe in the Middle East that began with the deadliest day in Israel's history on October 7 and became, by year's end, one of the worst civilian tolls of the century in Gaza. The planet recorded its hottest year in the history of measurement. Earthquakes in Turkey, Syria and Morocco, and a flood in Libya, killed tens of thousands, and each, this paper kept finding, had been foretold in a document nobody funded in time. And India landed a craft on the Moon, hosted the world, and lost a cricket final at home, the arc of a rising country compressed into a single year.

If there is a thread through all of it, and this paper has spent a year arguing there is, it is the distance between the warning and the action: the report filed and unread, the safeguard untested until it failed, the alarm that fired into a room where no one was configured to listen. The machine learned to talk this year. Whether we learn to listen, to the warnings we are already writing about the next crises, is the story of the years to come.

AMERICA

Two states throw Trump off the ballot, and hand the Supreme Court the election

The 2024 election year opens with an extraordinary legal question heading for the Supreme Court: whether Donald Trump can even appear on the ballot. Colorado's Supreme Court ruled on December 19 that Trump is disqualified under the 14th Amendment's ban on insurrectionists holding office, over his role in January 6, and Maine's secretary of state reached the same conclusion on December 28. Both decisions are paused pending appeal, and the US Supreme Court will now almost certainly have to decide, quickly, a question it has never faced: whether the man leading the race for the presidency is constitutionally barred from it. However the court rules, its legitimacy, already strained, will be tested as never before, in the most consequential election year in living memory.

IN BRIEF

Markets soar; the war widens; Ukraine under fire

Wall Street closed 2023 near record highs, the S&P 500 up about 24 percent, as the year's great fear, that taming inflation would require a recession, gave way to the hope of a soft landing and rate cuts to come; the "higher for longer" gloom of the autumn dissolved into New Year optimism. Israel's war in Gaza ground into the new year with the civilian toll past 20,000 by Gaza's count and no ceasefire in sight, as the conflict threatened to widen through the region. And Russia launched its largest aerial assault of the war on Ukraine on December 29, a barrage of nearly 160 missiles and drones across the country, a grim signal of the winter to come as Western aid stalled in a paralysed American Congress.

The Column

What a year of writing this down taught us

The Dispatch began a year ago with a simple idea: put each fortnight's biggest news next to the work of building the systems underneath it. Twelve months on, here is what the exercise revealed.

By The Dispatch

A year ago this paper started with a wager: that if you set the headline news of each fortnight beside the unglamorous work of building and running the systems that a modern economy depends on, patterns would emerge that neither the news nor the trade press sees on its own. Twelve months and twenty-seven issues later, we want to close the volume by naming what the wager turned up, because the patterns proved more consistent, and more useful, than we expected.

The first is the one we have returned to more than any other: the distance between the warning and the action. It began in our very first issue, with an airline whose crew-scheduling software everyone inside knew would fail under strain, and which was allowed to fail exactly as predicted. It ran through the year with a terrible consistency. The banks that fell had risks visible in their own filings. The dams that burst above a Libyan city had been described, by name, in a paper published a year before. The buildings that collapsed in Turkey had failed a code that amnesties had waved through. The safeguard at the world's leading AI lab was held up for years as the reason to trust it, and melted in a hundred hours the first time it was used. Again and again, the catastrophe was not unforeseen. It was foreseen, written down, and unfunded, because the work of preventing it was invisible, boring and expensive, and the cost of skipping it landed later, on someone else's watch. If this paper has one finding, it is that one. The warning is almost never missing. The reading of it is.

The second is that the technology story of the year was not really about chatbots. It was about power, in both senses. The models became a commodity, cheap by the token and, in the open versions, free by the download; the value moved to whoever controls the scarce things around them, the compute, the distribution, the data, the trust. The most important company in AI was nearly destroyed and then saved by exactly that question of who holds the leverage, and the answer, every time, was whoever owned the infrastructure. Which points at the story we spent the year moving from the margins to the front page, and will spend next year on the front page: that all of this runs on electricity, drawn from grids that were not built for it, and that the physical constraint under the digital boom is the one almost no one is pricing.

The third is more personal to the enterprise this paper comes out of. We spent the year putting real, unglamorous engineering, the kind that hides real customer data before it reaches a test system, that catches a wire fraud before the money moves, that answers a raised hand before the interest cools, next to the grand news, and the juxtaposition kept teaching the same lesson from the other direction. The value is in the boring middle. The follow-up nobody does, the review nobody schedules, the maintenance nobody funds. The same neglect that fells a bank or a dam is the neglect that loses a customer or leaks a database, only smaller, and the discipline that prevents both is the same: make the invisible visible, and do the dull, necessary thing before it becomes the emergency.

We do not know what 2024 holds, though the ballot fight, the two wars and the election year suggest it will not be quiet. We know only that we will keep doing this, fortnight by fortnight: the headline, and the work underneath it, side by side, on the wager that the pattern is worth seeing. Thank you for reading the first year of it. The warnings for next year are already being written. We intend to keep reading them out loud.

The Ledger
AI
The year's arc in one line: novelty in January, industry by summer, law by December. The models are a commodity; the power lies in compute, distribution and trust. 2024's question is whether the first real rules bite.
Data centers & power
Promoted from a margin note to a standing front-page subject over the year. The collision between the AI build-out's electricity hunger and a decarbonising grid is 2024's under-covered story, as it was 2023's.
Rates
The year ends with the market convinced the Fed will cut in 2024 and the soft landing achieved. Stocks near records, yields down sharply. The great fear of a recession-to-tame-inflation did not, in 2023, come true.
Real estate
US 30-year mortgage 6.61 percent to close the year, well off October's 8 percent, as rate-cut hopes thaw the edges of a frozen market. Whether the thaw is real depends on cuts that are priced but not delivered.
India tech
A landmark year: the Moon, the G20, a cricket final lost at home, a general election ahead in 2024. The rising-power story and the harder questions underneath it, both intact into the new year.
What we called wrong
The volume's honest ledger: we were too cynical in No. 8 about how fast governments would regulate AI, too quick in No. 4 to write off Google, and slow, across the spring's bank failures, to foresee that the cure for a crisis of concentration would be a bigger bank still. We logged each when it turned. That is the point of keeping score.
The Back Page

The warnings for next year are already written

It is New Year's Day, and the temptation is to look forward, so let us look forward honestly. Somewhere right now there is a report on a bridge that needs repair, a filing on a bank that is taking too much risk, a paper on a dam or a levee or a fault line, a risk register with a red line on it that everyone has learned to scroll past. Somewhere there is an engineer who has done the boring, thankless work of seeing the next crisis clearly and writing it down, and whose document is sitting, right now, in an inbox or a journal or a drawer, unfunded, because the thing it asks for is expensive and invisible and the cost of ignoring it will not arrive until later, on someone else's watch. This paper spent a year learning that these documents almost always exist before the disaster, and almost never get read in time. So here is our one resolution, offered to anyone who runs anything: this year, find the warning that is already written about your own operation, the one you have been scrolling past, and read it, and do the dull expensive thing it asks. It is cheaper than the emergency. It is always cheaper than the emergency. Happy new year, from all of us at the Dispatch. May you sound your sirens before the fire, and not, as too many did this year, during it.