Public sector pay increase announced, Tesla may be entering India and Chinese firm gets vital Chip technology

Good morning and welcome to the fourth ever issue of trxn. Today’s topics include:

• The UK government announces public sector pay increases, with mixed responses from unions

• Tesla in talks to select India as the base for building EVs for the Indo-Pacific (and India itself)

• Chinese firm gets strategic Chip technology to build tiny semiconductors

• Further news in AI as Google expands availability of its bot technology (Bard) and Elon Musk launches a company to focus on delivering more ‘ethical’ AI

Public sector staff in England & Wales, including teachers, police and junior doctors, are set to get pay rises of between 5% and 7%

• The government has announced the following increases in pay, with the following responses from unions:

  • 😃 Teachers: Offered a 6.5% rise, with extra money to fund the increase (so schools don’t have to use money from their existing budgets). Teaching unions are reported to be generally happy with this outcome.

  • 😐 Police: Offered the highest increase at 7%. The unions had mixed feelings as the increase is not as little as had been rumoured, but nonetheless it is less than inflation has been in the UK. There are also concerns that staffing cuts may be made to pay for the raise.

  • 🤔 Prison officers: Also offered 7%. The union have announced that the increase is another pay cut (relative to inflation), but have said they will scrutinise the deal further.

  • 🙁 Civil servants: Offered 5.5% salary increase for senior civil servants. The union (Prospect) is unhappy, saying "the government has not allocated extra money to pay for it". Prospect is also annoyed at Rishi’s plan to cut recruitment at the Ministry of Defence to help pay for the pay rises.

  • 😡 Doctors: Last, but not least, doctors have been offered 6% and are seriously unhappy with this. They are continuing to strike (5 days of junior doctor strikes this week and 2 days of consultant walk outs next week). The 6% offered is significantly below the 35% pay rise they’ve been asking for. They are also unhappy as the government has not promised extra money to fund the pay for the increase.

Tesla discusses building EVs in India, whilst Chinese firm acquires Chip technology

• The Times of India reported that Tesla is in talks with the Indian government to set up a car factory that will have the capacity to build about half a million vehicles annually. This will be with the purpose of both selling the vehicles in the Indian market and as an export base to the Indo-Pacific region.

• Concurrently, Chinese firm Chippuler has acquired technology to make Chiplets, which are small chips ( - sometimes the size of a grain). It is a technology the industry has embraced as it enables transistors so small that they can be measured in the number of atoms.

• Whilst interesting in their own rights, these stories highlight an interesting dynamic in China & India’s export advantages. The rapid uprise in the China’s economy has meant that its GDP per capita is now 5x that of India’s. This means more expensive labour in China and a shift in China from the production of lower tech products (which you might find many of in your home) towards higher tech products such as Chiplets. Meanwhile, India has been touted as one of the countries that may fill this gap, with Apple also moving some manufacturing there.

Other snippets: Google expands AI bot reach, Elon launches his own AI company and Virgin Galactic announces second commercial flight into space

• Google is expanding its ChatGPT rival (Bard) in Europe & Brazil, marking it’s largest expansion since its March launch in the UK and US. You may recall that the Bard announcement wiped $100bn off their market value as the wrong answer was shown in their demo video 🤦. This time, the announcement has fared better and shares in Alphabet (Google’s parent) jumped 4.9% as a result.

• Because owning Tesla, SpaceX, Twitter and more isn’t enough, Elon Musk has launched his own AI company called xAI. Musk has previously voiced concerns over the safety of AI and its potential to cause harm to humanity. He explained that xAI will aim to create AI that is “maximally curious” because that will make it pro-humanity from the standpoint that humanity is just much more interesting than not-humanity.”

• Virgin Galactic is launching a second commercial space flight next month, with the mission set to launch from 10th August onwards. Reuters reported “Virgin Galactic had earlier said it has already booked a backlog of some 800 customers, charging most from $250,000 to $450,000 per seat, and envisions eventually building a large enough fleet to accommodate more than one flight a day.”

Concept of the day - Occam’s Razor

• Occam’s Razor states that “among competing hypotheses, the one with the fewest assumptions should be selected.” In plain English, a simple explanation is preferable to a more complex one.

• Occam’s Razor can be used to make rapid decisions where little empirical evidence is available. It is a useful tool for making initial conclusions before the full scope of information can be obtained.

• One of it’s most prevalent use cases is in medicine where ‘common things are common.’ Trainees are instructed to think first about what the most common diagnosis is likely to be before considering the multitude of potential ailments. ‘When you hear hoofbeats, think horses, not zebras.’ For example, a person displaying influenza-like symptoms during an epidemic would be considered more likely to be suffering from influenza than an alternative, rarer disease.

• However, as with any concept, there are exceptions and Occam’s Razor should should not be applied where logic, experience, or empirical evidence contradicts. Going back to our earlier analogy, “In most cases, hoofbeats are likely to be horses, not zebras - unless you are out on the African savannah.”

• The key take-away of Occam’s Razor is that you shouldn’t add complication where a simpler explanation is at the ready.

• (P.s. credit for this concept goes to Farnam Street, whose website contains explanations for a number of mental models to help us think and act better)