Stuck in the Middle

Even before the war – oops: special operation, excursion, or whatever your preferred term is – with Iran started, people were complaining about how expensive things are. Home ownership for first time buyers seems out of reach. Sure, egg prices may be down from the late stages of the Biden Administration (thank you so much, bird flu!), but most of us are still dismayed by our grocery bills. Health insurance costs what a house might have cost fifty years ago and what a new car might have cost twenty years ago.

Using a middleman to negotiate. Credit: Microsoft Designer

The latest findings from the West Health-Gallup Center on Healthcare in America show that a third of Americans have cut back on expenses in order to pay health care expenses. We’re stringing out their prescriptions, borrowing money, even skipping meals to pay our health care bills. Even among those with health insurance 29% are cutting back; 62% of those without health insurance are making trade-offs, and I’m surprised the latter isn’t much higher.

Similarly, Kaiser Family Foundation found that 4 in 10 Americans have not taken their prescription medications due to costs, and 6 in 10 worry about being able to afford prescription drugs for themselves or their families. Even among those with insurance, a majority worry.  

Gallop also found that Americans are delaying major life events due to their health care costs, including taking vacations (29%), surgical or medical treatments (26%), or changing jobs (18%). Even a quarter of those with family incomes over $240,000 report such delays.

Meanwhile, the average cost for a new car hit $50,000 in December (although it declined slightly in January). Edmonds reports that 1in 5 new car buyers have payments of $1,000+, a new record The average new car payments were $772, also a new record. Even the percent of used car buyers with $1,000+ payments hit a new record. If you think you can still find entry level cars under $20,000, Kelley Blue Book says forget it.

And, of course, even once you have a car you have to pay for gas, insurance, and maintenance, all of which are also going up noticeably. Navy Federal Credit Union’s Cost of Car Ownership,(COVO) Index found that the cost of car ownership has gone up 42% since January 2020, going up at twice the rate of inflation.

“Americans are frustrated by Whac-a-Mole inflation,” said Heather Long, chief economist at the credit union. “It’s difficult to plan and leaves middle-class and moderate-income consumers constantly on edge about what will shoot up in price next.”

If you’re wondering why all the talk about cars it is because of a fascinating article by Imani Moise in The Wall Street Journal about a new way to buy – or, at least, to negotiate for – cars: hire a middleman. For a flat $1,000, 33 year-old Tomi Mikula will negotiate for you, using the expertise he gained from a decade of selling cars.

His company is called Delivrd, which now includes five other professionals. Its slogan is “Skip the Dealership, Not the Deal,” and it promises “A seamless, enjoyable car buying experience tailored to your busy lifestyle.” He even livestreams some of his negotiations.

Mr. Mikula pits dealers against dealers, looking for the best deal. Some have started to refuse to deal with him, while others relish the challenge. Even his expertise can’t always result in a good deal; for some popular models, he says, ““You’re paying for me to find you one.”

Here’s the quote I loved: “You’re hiring a middleman to deal with the middleman to make the middleman more efficient,” Mr. Mikula said.

That sure brings me back to health care.

In the Republicans’ perfect heath care world, consumers would control their own money, purchasing services wisely, with transparent pricing. It was a point of contention in the recent efforts to expand the expanded premium credit for ACA, but goes much further. President Trump recently amplified this in his State of the Union: “I want to stop all payments to big insurance companies and instead give that money directly to the people so they can buy their own healthcare, which will be better healthcare at a much lower cost.”

Of course, they always gloss over the huge differences in health care expenditures, where the top 5% of people account for half of all spending.

“Transparency” has been a rallying cry for conservatives for the last twenty years, with some progress but little impact. There are tens of thousands of “services,” each of which have prices that vary by payor, and few of which are meaningful unless you happen to have a medical degree (and, even then, not always).

Even prescriptions, which would seem like something that should be simple, are maddeningly opaque. Is it on formulary, is it in-network (or not only in-network but “preferred”), is it brand or generic?

Cars, on the other hand, are much simpler. A new car model from Dealer A is the same thing as that model from Dealer B. You can easily find the list price, the safety record, the consumer and expert ratings. Even for used cars, you can find suggested price and vehicle history record. All the data you should need to negotiate like Mr. Mikula should be there.

Yet, I daresay, few of us leave a car dealer feeling we’ve gotten the best deal, no matter how much homework we’ve done. The information asymmetry has been lessened, but not eliminated.  Thus the opportunity for “a middleman to deal with the middleman to make the middleman more efficient.”

I suppose we could create an industry of such middlemen for healthcare. They’d have to deal with the problem that the service you buy from Hospital A is not the same service you might buy from Hospital B; in fact, the service you buy from Dr. Z at Hospital A is not the same as the service you might buy from Dr. Y at the same hospital. Health care is not a commodity, and we don’t really know how to quantify exactly what we’re buying.

Middlemen or not.

In theory, health insurers should be our middlemen, dealing with health care practitioners and organizations from a position of more volume and more expertise, but most of us view them as acting more in their own interests. And even those middlemen have hired their own middlemen, such as PBMs.

If we want to make things more affordable, we need more than transparency, and presence of middlemen is a sign that a market isn’t working, not a way to make it work better.

While We Were Bombing

When it comes to the fight between Anthropic and the Pentagon, I’m on Team Claude. If asked to trust Anthropic CEO Dario Amodei or Secretary Pete Hegseth, I’m picking Dr. Amodei. The spat between Anthropic and the Pentagon may really be less about AI governance than a personality problem between the two men, but still is important. All that being said, I hate to break the news to Dr. Amodei, but there are going to be autonomous AI weapons – if there are not already – and AI is almost certainly already being used for mass surveillance, even of U.S. citizens.

Attack of the drones -- guided by AI. Credit: Microsoft Designer

Those were his supposed “red lines,” and they are good ones, but technology advances and current events have rendered them moot. Are they “lawful”? Well, they probably aren’t illegal, but that speaks more to how outdated our laws are when it comes to AI (or many other newer technologies). Meanwhile, of course, the U.S. and Israel unilaterally attacked Iran – pick your choice of the many rationales offered – and Claude has been an integral part.

The future of war has arrived. It actually arrived in Ukraine a couple of years ago. A war that started out as a 20^th century war, relying heavily on tanks, troops, and artillery, quickly evolved into something few had been expecting -- a war of drones, cell phones, GPS, AI, anti-drone countermeasures. Ukraine has demonstrated startling (and desperately needed) innovation, in tactics, strategy, and especially drones. Despite the country being battered by Russian missile and drone attacks, Ukraine produces over 4 million drones a year, far more than the U.S. or, indeed, all NATO countries combined.

U.S.-supplied missile systems like the Patriot, Stinger, or Javelins have helped Ukraine fend off Russian attacks, but those systems are expensive and in short supply. And once Russia started using Iranian-designed drones in mass attacks, they became woefully inadequate, not to mention not cost-effective – a $1,000 drone versus a $1 million interceptor?  The economics are clear.

Iranian Shahed drones. Credit: AP

They may be clear, but evidently not quite fully apparent to the U.S. military. Attacks on Iran look a lot like the Gulf War, although the aircraft and the “smart” munitions are better (and more expensive). When Iran retaliated, it was largely through its vaunted Shehed drones. The initial U.S. casualties were the result of a drone attack, as were attacks on U.S. radar systems. As Ukraine painfully learned, but the U.S. apparently did not, expensive missile systems are not well designed to counter massive drone attacks. The Hill reports that Pentagon officials admitted to Congressional leaders that Iranian drone attacks were getting through U.S. defenses, putting our troops and bases at risk.

Kelly Grieco, a senior fellow at the Stimson Center think tank, told The Hill: “It’s worth saying that the notion the U.S. military couldn’t have predicted this threat begs belief given that it was well known about Iranians’ Shahed threat. And we’ve had four years of watching Ukraine deal with Iranian drones and Russian-made variants of them in attacks, so this shouldn’t have come as a surprise.”

And yet…

It’s no wonder that, after years of having to beg for U.S. support, Ukraine’s President Zelensky has offered to share some of his country’s hard won drone expertise. “Our military possesses the necessary capabilities,” President Zelensky said in a post on X. “Ukrainian experts will operate on-site, and teams are already coordinating these efforts.”

Let us hope that U.S. and Israeli officials are not too proud, or too stupid, to take such assistance.

The problem may boil down to, as The Pentagon’s first AI chief, retired Air Force Lt. Gen. Jack Shanahan, told The Wall Street Journal: “The Department of Defense was built as a hardware company in the industrial age, and it has struggled to become a digital company in a software-centric era,” Weapons and weapons systems that take years to develop, more years to produce, while costing cost tens of millions or more, are going to struggle to keep up in a world where weapons can be 3D printed and guided by AI.

It should be noted that last fall President Zelensky warned the UN: “Dear leaders, we are now living through the most destructive arms race in human history because this time, it includes artificial intelligence. We need global rules now for how AI can be used in weapons. And this is just as urgent as preventing the spread of nuclear weapons.” Dr. Dario was perhaps listening, with Secretary Hegseth almost certainly was not.

Craig Jones, a political geographer at Newcastle University, UK, told Nicola Jones in Nature: “The current failure to regulate AI warfare, or to pause its usage until there is some agreement on lawful usage, seems to suggest potential proliferation of AI warfare is imminent.”

It’s here. Is AI being used in Iran? You bet, as Michael Daniels and Dov Lieber of The Wall Street Journal outline, everything from logistics and intelligence analysis to targeting.  

Unfortunately, as Steve Feldstein, a senior fellow at the Carnegie Endowment for International Peace think tank, told Rest of World: “Do we have the right rules in place and accountability norms to handle the exponential growing use of these tools? My answer would be no.”  

Similarly, Daniel Castro, a vice president at Information Technology and Innovation Foundation (ITIF), wrote in IEEE Spectrum regarding the Amodei/Hegseth dispute:

Reasonable people can disagree about where those lines should be drawn

But that disagreement underscores a deeper point: the boundaries of military AI use should not be settled through ad hoc negotiations between a Cabinet secretary and a CEO. Nor should they be determined by which side can exert greater contractual leverage.

If the U.S. government believes certain AI capabilities are essential to national defense, that position should be articulated openly. It should be debated in Congress, and reflected in doctrine, oversight mechanisms and statutory frameworks. The rules should be clear — not only to companies, but to the public.

The Pentagon’s strategy seems to be bombs away, even if it costs $1 billion per day and soon will have diminishing impact. The Administration’s AI strategy seems to be that guardrails only would dampen innovation and leave us behind in the AI race. Our septuagenarian Congress still can’t figure out Facebook, and wants no part of tackling AI. None of these inspire confidence.

I think Dr. Amodei and President Zelensky have a much better grasp on the future – which is already happening -- than do Secretary Hegseth or President Trump, but I worry we’re going to have to go through a lot of scary things before we settle into that future.

Where Are We Going to Put All That?

Right now, the world is talking about the U.S. attacks on Iran, while the tech world is closely following the Pentagon-Anthropic-OpenAI spats about AI safety and guardrails. I’m going to let cooler, smarter heads opine about them. Instead, I want to return to the rather more dull, but equally important, topic of data storage.

A pretty piece of glass? Yes, but with LOTs of data on it. Credit: Microsoft Research

I first wrote about data storage almost ten years ago, focusing on the then-new ideas of using diamonds or DNA as ultra-dense storage mechanisms. Five years later I was surprised to find we were about to enter the Yottabyte Era of data, with DNA still a leading candidate to store all that data. Since then we’ve seen AI blossom and data centers become a top-of-mind topic of conversation for many Americans. We’re generating data faster than we can find places to store it, and still haven’t solved how that storage will last long term.

Well, I’m happy to report that advances in DNA storage continue, and that there is a new rival – glass! – that may prove even better.

Let’s start with DNA:

Rewritable DNA storage: This week researchers at the University of Missouri said that they’ve found a way to not only store data in DNA but to rewrite it as needed. Li-Qun “Andrew” Gu, a professor of chemical and biomedical engineering, said. “We wanted to see if we could store and rewrite information at the molecular level faster, simpler and more efficiently than ever before.”

The team is developing a compact electronic device paired with a molecular-scale detector called a nanopore sensor. As the DNA passes through the sensor, it creates subtle electrical changes that software translates back into zeros and ones and, ultimately, the original data file. This method allows data to be written, erased, and rewritten repeated, just like a hard drive might, except with much more storage and longevity.

“Think of it like a super-secure safe deposit box for your digital life,” Professor Gu said. “DNA storage could protect everything from personal memories and important documents to scientific data and corporate archives — without the added cybersecurity concerns.”

Synthetic biology, meet electronics: Last week, a team of researchers at Penn State University, reported on getting DNA to work with electronics. The researchers developed a memory resistor, or “memristor,” that requires little energy to operate. Better yet, memristors can allow current flow even after its power source is turned off and it can remember the direction of prior current flow.

The team had to create customed DNA sequences, integrate them with thin films of perovskite, which is commonly used in solar cells, lasers and data storage devices. This made the DNA capable of conducting electricity.

“We can computationally determine exactly which sequences we need and how long they should be, and then we can rationally design them with synthetic DNA,” co-author Neela H. Yennawar, research professor and director of the Penn State Huck Institutes, said. “These structures can be systematically doped with silver and other ions and engineered to interface seamlessly with perovskites — transforming DNA from a biological macromolecule into a programmable, multifunctional nanomaterials platform.”

“Biology and electronics are different domains,” said Kavya S. Keremane, co-corresponding author and postdoctoral researcher in materials science and engineering. “Bridging these two fields required developing an entirely new materials platform that allows them to function seamlessly together. By combining the information storage capabilities of DNA with the exceptional electronic properties of perovskite semiconductors, we created a bio-hybrid system that fundamentally changes how low-power memory devices can be designed.”

Cheaper, Faster, More secure: In a pair of related studies released in late January, researchers at Arizona State University propose to approach DNA storage differently: “By treating DNA as an information platform rather than just a genetic material, we can begin to rethink how data is stored, read and secured at the nanoscale,” says Hao Yan, a Regents Professor in the School of Molecular Sciences and director of the Biodesign Center for Molecular Design and Biomimetics.

The approach centers less around the well known letters DNA uses but rather the physical shape. They designed and constructed nanoscale DNA structures that acted as physical letters, When those letters pass through a microscopic sensor, machine learning software records and analyzes subtle electrical signals, which the system can then translate back into readable words and short messages with high accuracy.

The approach greatly increases the number of possible molecular codes that can be created, making unauthorized decoding far more difficult. It also allows information to be packed into three-dimensional DNA structures, which adds even more complexity and security to each molecular key.

“In these studies, our team brings together complementary approaches, including DNA nanotechnology, super-resolution optical imaging, high-speed electronic readout and machine learning, to interrogate DNA nanostructures across multiple spatial and temporal scales,” Chao Wang, associate professor in the School of Electrical, Computer and Energy Engineering. said.

Then, for something completely different:

Through a glass, clearly: In mid-February, Microsoft reported what it called a “breakthrough” in glass-based storage, under its Project Silica, the goal of which is to develop:  

…the world’s first storage technology designed and built from the media up to address humanity’s need for a long-term, sustainable storage technology. We store data in quartz glass: a low-cost, durable WORM media that is electromagnetic field-proof, and offers lifetimes of tens to hundreds of thousands of years. This has huge consequences for sustainability, as it means we can leave data in situ, and eliminate the costly cycle of periodically copying data to a new media generation.

The breakthrough entails writing not just to expensive silica but ordinary borosilicate glass, the same material found in kitchen cookware and oven doors. Moreover, they’ve made both the reading and writing devices simpler, faster, and cheaper. The team wrote: “All steps, including writing, reading and decoding, are fully automated, supporting robust, low-effort operation,”

They believe that glass storage is resistant to water, heat, and dust (unlike DNA), and should preserve data for at least 10,000 years. “It has incredible durability and incredible longevity. So once the data is safely inside the glass, it’s good for a really long time,” said Richard Black, the research director of Project Silica. He cautions, though, ““This is not a replacement for everyday storage like [solid state drives] or hard drives. It’s designed for data you want to write once and preserve for a very long time.”

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Obviously, I’m skipping lots of technical details, and, just as obviously, we’re not quite there yet with either. But that’s the thing about long-term solutions; we have to start developing them now, before the future overwhelms the present.