Digital Economy Weekly - October 20, 2024

Story of the Week

Let's Address Cybersecurity, Whether We Want to or Not

The old expression, “locks only prevent your friends from breaking and entering” applies to cybersecurity, too. Passwords, no matter how complex, can hypothetically be hacked by someone, somewhere. Increasing uses of MFA improve the situation.?

But with certain known bad actors can muster thousands upon thousands of highly proficient security specialists to do their bidding, there is a never-ending challenge facing large businesses and government organizations. We poor, small individuals face similar challenges; our challenges are less intense and not as relentless perhaps, but there is no safe place for anyone using the internet. A good example of this comes from an apparent new and diabolical attempt to phish gmail accounts.?

A report from Commvault and OM Research found that 83% of large organizations have experienced a breach at one time or another, with 50% reporting a breach within the last six months. These intrusions cost the companies as much as $12 million each day.?

The report's writers urge much of the conventional wisdom: "Regularly test and enhance your recovery plans. Frequent drills and updates ensure that your organization can respond swiftly and effectively to any cyber incident. Prioritize building cyber maturity by adopting the identified markers of cyber recovery readiness. Develop a holistic cyber recovery strategy that can be extended."

But what about potentially increasingly catastrophic events? The dawn of quantum computing is edging closer; maybe not today, maybe not tomorrow, but soon...

We've already seen severe disruptions when a cloud region goes down, or airline systems are disrupted, and problems with telcos and banks. The world is not going to become less reliant on digital infrastructure, we know that.

The global nature of cyberthreats shows up this week, in a link below about a new cyberlab being put togehter in Nigeria. This West African nation has the continent's largest population, largest economy, and harbors dreams to become a consequential global financial power. Its new leaders, who tend to be younger and more IT-savvy than previous governments, understand the time is now to get after all the issues, minor and apocalyptic, that could stop progress dead.

Cybersecurity is an issue that few people really enjoy discussing or studying. It kills visionary vibes. There's no upside. Technically, it's as sloggy as slogs get. But it, as always, is critical. Not just mission-critical, but existentially critical.?

Links of the Week

Meta Discusses 140K Rack Density at OCS

Buckle up. Previously unimaginable rack densities are coming, and in some cases already here. Meta, for example discussed its new 140K density and the other specs that go with it at its most recent Open Compute Summit, held in San Jose, CA.

The new Orv3 design is optimized for the Nvidia GB200 Grace Blackwell Superchip, according to Meta, designed to support the 140K density with liquid cooling. Noted industry analyst Rich Miller was there.?Read here .

ASML Stock Dives with Bleak Outlook for the Future

Netherlands- and US-based ASML rattled investors with the release of its Q3 earnings, which showed future bookings of half the level predicted. The disappointing $2.8 billion figure caused an immediate 16% decline in the company's stock price, the worst single-day performance in 26 years. ASML makes the machines that make the chips, with single systems running into the tens of millions of dollars. Its sudden decline was attributed to “overall industry pessimism” in a special Bloomberg report. The? pessimism is shared by South Korean chipmaker Samsung, which also reported disappointing results.? Meanwhile, as increasing pressure from the US impedes sales of ASML technology to China, it's relevant that 47% of ASML's revenue in the past quarter comes from there. Read here .

Billion-dollar Project in London To Create 80MW of New Footprint

UK company sineQN is working with investors to invest about $1 billion and deliver 80MW of new data center footprint in the East London borough of Newham. The plan is generally driven “by increased demand from the digitalization of society, including cloud migration and AI, as growth in data storage and processing continues to accelerate,” according to the company. Plans call for project completion by 2027. The company says the data center will be a potential heat source for thousands of homes in the borough, and that it will deliver performance and flexibility to customers, with a location only 500 meters from the London Internet Exchange (LIX). London is Europe's largest data center hub, with more than 2GW online, and a vacancy rate of less than 10%. Read here .

Call for More Renewable Energy in Australia

Some angry words are coming out of Australia, as the nation's largest utility is urging stepped-up efforts to create renewable energy while not pursuing it itself over the past few years. The company, Origin, says it now plans to pursue construction of 4 to 5 gigawatts of new renewable energy by 2030. Australia has the world's 13th-largest economy, and consumes about 8 gigawatts of renewable energy, equal to 27% of its total electricity grid. Read here .

World of Blockchain Extends to Paraguay and Other Less-Known Places

Open-source software is not often mentioned within the digital infrastructure industry as transformative. But a recent report from the Linux Foundation uncovers some fascinating nuggets, such as a new sovereign blockchain in Paraguay, a country with a minimal data center footprint at present, but a 100% hydropower-driven electricity grid with developed-nation level power capability. A similar project in the tiny Pacific nation of Palau is also mentioned, as are many other items about goings-on and events throughout the world. Read here .

Nvidia Branches Out to AI Engines

Nvidia is branching out from chip design to AI software design, with a new model called Llama-3.1 that is said to be a substantial improvement over current versions of ChatGPT as well as Anthropic's Claude.?

The Llama AI is said to carry an emphasis on alignment, the ability to sense what users are really seeking and therefore improve response relevance. One fairly deep analysis of the announcement says it “highlights a growing shift in the AI landscape toward models that are not only powerful but also customizable.” Read here .

Cisco Working with Nigerian Government to Create Cybersecurity Lab.

Nigeria's government is working with Cisco to create a cybersecurity lab to "strengthen Nigeria's digital infrastructure and enhance its cybersecurity capabilities,” according to Nigeria's Ministry of Communications and Digital Economy.

A Ministry announcement says, “Cybercrime in Nigeria is on the rise, with data breaches increasing by 64% in Q1 2023 compared to the previous quarter, This makes the (cybersecurity lab) initiative even more crucial for economic stability.” Read here .

Draghi Report on EU Fostering Tech Gains a Positive Review

A former advisor to the International Monetary Fund and current Professor of Economics and Political Science at UK-Berkeley, Barry Eichengreen, is calling for the EU to heed the recommendations for improving technology policy recently put forth by former Italian Prime Minister Mario Draghi.?

Eichengreen concurs with Draghi that "Europe needs to complete its capital markets union to foster its venture capital industry, it needs fewer regulatory roadblocks, (and) it must build an integrated power grid and coordinate investments in decarbonization to bring down energy costs.

Implied in Draghi's report and positive reaction to it is the notion that the EU will severely lag the movement toward developing Digital Economies, and will ultimately be left behind the Americas, China, India, and all the world's developing nations that are in some way working toward improving their economies digitally. Read here .

UK Commitment to Data Centers Spurs Billions in New Investment Plans

A new billion-dollar data center planned for London (see above) is just one of many investments totalling more than$8 billion in the UK, following the new government's new announcement to acknowledge that data centers should be classified as critical national infrastructure.

Newly excited players include CyrusOne (with plans for almost $3.5 billion in investments), CloudHQQ (with a plan for a $2.6 billion data center in Oxfordshire), ServiceNow (with planned commitments of $1.6 billion over the next five years), nd CoreWeave (with a new $1 billion plan that piggybacks on an earlier commitment of $1.4 billion).?Read here .

Heard in the Industry

“Today, without AI, the market would be very sad, if you ask me. The (chip) recovery is not what I think everyone had wished for.” – ASML CEO Christophe Fouquet. Read here .

Heard in the Aisle

“AI has been at the core of the experiences Meta has been delivering to people and businesses for years...?

(so) we are also driven to advance our infrastructure to support our new and emerging AI workloads.”? – Omar Baldonado, Director of Engineering, Meta.?Read here .

Country Snapshot: Rwanda

Rwanda has one of the more ambiguous reputations in Africa. Despite a very low income level, it has made very large strides with respect to its digital infrastructure in recent years. Rwanda has continental Africa's highest score in the IDCA Digital Readiness Index, by far, reflecting this progress. It also has one of the world's more controversial leaders, President Paul Kagame.?

So what can we make of Rwanda? It is small and landlocked, with an area and population roughly the size of New Jersey or Belgium. Its total economy of $15 billion is similar to that of Akron, OH. Yet it is a highly influential nation, with Kagame appearing on many influential daises over the course of any year.

Despite its recent progress and relatively high Digital Readiness ranking, Rwanda's annual per-person income of around $1,000 remains among the lowest in Africa and the world. It retains a relatively good cost of living, although rapid economic progress inevitably brings costs of as well, over time. Rwanda's mobile infrastructure has developed relatively well recently, but 30% of its people still lack direct mobile access.?

The country's data center footprint it much stronger than those of its neighbors, and consumes almost 2% of its electricity grid, a high percentage for sub-Saharan Africa. Yet it remains very small compared to the world median.?

A look at Rwanda's Digital Readiness overall score – and across the four broad categories of Economy (including digital infrastructure), Environment (including sustainability), Social, and Governance – compared to some of its neighbors and the world shows the following:

Comparing Rwanda's bond rating with its Digital Readiness numbers shows that Rwanda's current below-investment grade rating is undervalued. (A similar situation exists in Zambia as well.) Investors may not normally take a small African country seriously, preferring to focus on larger neighbors (in this case Kenya, Tanzania, and Zambia). But Rwanda can also be a linchpin country in the region, with a much higher degree of consequentiality than raw numbers can indicate.?

Inside IDCA

Sustainability Webinar, Wednesday, October 23

Sustainability is not just a matter of setting year 2030 or 2050 goals for emissions reduction. It involves comprehenive policies that are on the leading edge and address all levels (Scopes 1, 2, and 3) of emissions. With the global data center footprint projected to more than double by 2028, there has never been a more important time to make Sustainability a top priority.

Join IDCA Sustainability Counsel Bruce Taylor for a thought provoker on Wednesday, October 23, 11am-noon eastern time.

Register here .