All aboard the quantum rollercoaster, and reaching peak child under capitalism
Welcome to Cautious Optimism, a newsletter on tech, business, and power.
📈 Trending Up: Bending the corporate knee … Self-adaptive LLMs? … bank stocks after earnings, including JPMC, Citigroup, and Wells Fargo … misinformation at Meta … American patronage …
📉 Trending Down: Climatetech venture investment, sadly … getting things done on time … TikTok …
Before we get into our main topics today, the United States dropped new inflation data. Here’s the key bit:
The all items index rose 2.9 percent for the 12 months ending December, after rising 2.7 percent over the 12 months ending November. The all items less food and energy index rose 3.2 percent over the last 12 months. The energy index decreased 0.5 percent for the 12 months ending December. The food index increased 2.5 percent over the last year.
The core — less food and energy — was better than expected. As a result, stocks are up sharply this morning on the anticipation of a better rate cutting harvest this year.
Up, down, and up again?
Quantum computing. Commercially viable fusion power generation. Self-driving cars. Digital superintelligence. They are some of the biggest projects in technology today, and none are fully baked. Progress is being made, however:
Waymo (Tesla, Zoox, etc) and a number of Chinese companies have made leaps and bounds in self-driving. Now that robotaxis are revenue-generating, I expect commercial incentives to ensure that the course is fully run. And faster than most expect.
Commercially viable fusion power generation is far from in-market today. And while progress is slow — it is accelerating. Sam thinks that we’re close, but he’s talking his book.
Digital superintelligence. What more do we need to say here, other than that the entire global technology market is racing to get at least as close as they can. As with self-driving cars, now that economic incentives are helping push the technology forward, I see this quest as something that we’ll either crack, or get close to, in time. Faster, please.
And then there’s quantum computing. I vibe with quantum because it’s future-punk; what if we froze stuff to near absolute zero, and then did lots of weird physics to get that stuff to do super-hard work for us? The promises of quantum computing are large, but seemingly always out of reach. And under polite assault.
To kick off 2025, both Nvidia’s Jensen Huang and Meta’s Mark Zuckerberg chipped at the near-term promises of quantum in public appearances. The result? A painful, market cap-shattering selloff in the value of public quantum stocks:
Ouch.
The lift at the end — impressive in percentage terms, less so in terms of absolute recovery — is due to the quantum folks pushing back. Yahoo Finance spoke with D-Wave’s CEO Alan Baratz, who unsurprisingly defended his company and industry. Here’s the key quote:
We have customers that are using our quantum computers today in support of their business operations, and we have demonstrated the ability to solve important problems in the area of material simulation on our quantum computers today in minutes.
While this is true, the company’s commercial results remain nascent. But so what, so too were OpenAI’s before ChatGPT came out, right?
Contrasting the Jensen-Zuckerberg commentary is a recent breakthrough from Google. Recall that the search giant announced the Willow quantum chip as 2024 came to a close, finding that it could “reduce errors exponentially.” How so? The company’s published research says that “the more qubits [Google uses] in Willow, the more [they] reduce errors, and the more quantum the system becomes.”
I doubt that quantum will ever have a ChatGPT moment. You can’t take something so finicky and make it mainstream overnight, I don’t think. But I also think that with even a smidgen of commercial viability, the capital tap will remain on. And so long as there’s still cash flowing, a lot of very smart people are pushing on a real challenge that we’re making progress on. I’d bet on the bearish timelines being too conservative.
Peak child
Something morbid you can do is look up a nation’s birth statistics, its death statistics, and do a little subtraction. To wit:
In October, 2024 Italy saw 32,309 births, and 53,550 deaths. With no immigration, the nation would have shrunk by 21,241 that month.
In 2024, South Korea saw 242,334 births, and 360,757 deaths. That’s about 10,000 fewer folks per month during the year.
This bums me out, because I think that humans are pretty cool and we shouldn’t diminish or fade away. There are still a few places in the world where TFR is high, but those markets tend to be moving in the same direction as the rest of the world. So much so that we’re now passed what is called “peak child:”
Our World In Data reckons we passed a peak in the number of ‘under-5s’ in 2017, ‘under-15s’ in 2021, and ‘under-25s’ in 2024. I presume that peak ‘under-35s’ is somewhere on the horizon.
If I had to get ahead of my skis a bit and guess, I’d hazard that we’re running up against a problem: Capitalism is great for economic growth and creating competitive markets that reward intelligence and work; however, competitive societies create increased pressures on parenting that demand it be both intensive, and time-consuming; therefore people have fewer kids to better invest in them so that they can succeed in a competitive market; ergo, the richer a society gets, and the faster it gets there, the more quickly its fertility will fall as parents react to a new incentive set. (This logical progression is partially based on this book.)
All this has me pretty sad. But then I ask myself why aren’t the spouse and I prepping ourselves to have a third kid. I can answer that! We’re exhausted with two. That’s why. And we have to make a zillion dollars over the next 25 years or so to launch them into an even more competitive world that we were raised in.
To wit, I attended the University of Chicago back when its admit rates were around 28%. Today that same number is about 4.5%. So much for hoping legacy status helps the tots.
I don’t know how to solve the above. Capitalism is too damned effective to jettison, but we also need more humans. The only thing that I know here is that attacking the progress that feminism has made towards the equality of the sexes is a non-starter.
The problem is that women are unsupported in society. They need to have direct care support with the newborn, the equivalent of grandmother or aunty, or maternal nurse in some countries. The cost of a newborn is eye-watering with high priced clothing and furniture. Some countries recognise this. Finland has been sending new mothers their care package including diapers, blankets and baby clothes since 1938. Others give a one time allowance to cover the cost. However, most countries ignore the cost both financially and emotionally. If the mother is forced to work full time there are child care costs and most mothers do not want to be separated from their young child(ren) all day long.
I am not surprised about the low birth rate, who would voluntarily face financial ruin by having a child? Western industrialised countries are total morons when it comes to population economics. The undeveloped world have it right, in total poverty the young child arrives and there is family support as well as community support. Families share resources so that the young mother and child are not starving. And unlike the West, fathers play a huge role with raising their babies and young children. We've forgotten that.
Elon Musk sees that with robots will come a universality of income and less need for work. Great. Bring it on. No one else is going to save us, apart from migrants who are ostracised by the receiving country and given at best, low paid dirty jobs that no one else wants to do. Maybe the IT sector has one bit right, it wants to have freer migration policies so they can hire anyone, anywhere. That is one way to increase population, lower the gates.
And by the way, we are all migrants and descended from migrants, so why the fuss of the new ones? Oh! You don't like them? Well then you have a shrinking population. Ta Daah!!!