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Flush with $42M, hot AI startup Faculty plans to hoover up more PhDs… and steer clear of politics

In the wake of the news that U.K.-based AI startup Faculty has raised $42.5 million in a growth funding round, I teased out more from CEO and co-founder Marc Warner on what his plans are for the company.

Faculty seems to have an uncanny knack of winning U.K. government contracts, after helping Boris Johnson win his Vote Leave campaign and thus become prime minister. It’s even helping sort out the mess that Brexit has subsequently made of the fishing industry, problems with the NHS and telling global corporates like Red Bull and Virgin Media what to suggest to their customers. Meanwhile, it continues to hoover up PhD graduates at a rate of knots to work on its AI platform.

But, speaking to me over a call, Warner said the company no longer has plans to enter the political sphere again: “Never again. It’s very controversial. I don’t want to make out that I think politics is unethical. Trying to make the world better, in whatever dimension you can, is a good thing … But from our perspective, it was, you know, ‘noisy,’ and our goal as an organization, despite current appearances to the contrary, is not to spend tonnes of time talking about this stuff. We do believe this is an important technology that should be out there and should be in a broader set of hands than just the tech giants, who are already very good at it.”

On the investment, he said: “Fundamentally, the money is about doubling down on the U.K. first and then international expansion. Over the last seven years or so we have learned what it takes to do important AI, impactful AI, at scale. And we just don’t think that there’s actually much of it out there. Customers are rightly sometimes a bit skeptical, as there’s been hype around this stuff for years and years. We figured out a bunch of the real-world applications that go into making this work so that it actually delivers the value. And so, ultimately, the money is really just about being able to build out all of the pieces to do that incredibly well for our customers.”

He said Faculty would be staying firmly HQ’d in the U.K. to take advantage of the U.K.’s talent pool: “The U.K. is a wonderful place to do AI. It’s got brilliant universities, a very dynamic startup scene. It’s actually more diverse than San Francisco. There’s government, there’s finance, there are corporates, there’s less competition from the tech giants. There’s a bit more of a heterogeneous ecosystem. There’s no sense in which we’re thinking, ‘Right, that’s it, we’re up and out!’. We love working here, we want to make things better. We’ve put an enormous amount of effort into trying to help organizations like the government and the NHS, but also a bunch of U.K. corporates in trying to embrace this technology, so that’s still going to be a terrifically important part of our business.”

That said, Faculty plans to expand abroad: “We’re going to start looking further afield as well, and take all of the lessons we’ve learned to the U.S., and then later Europe.”

But does he think this funding round will help it get ahead of other potential rivals in the space? “We tend not to think too much in terms of rivals,” he says. “The next 20 years are going to be about building intelligence into the software that already exists. If you look at the global market cap of the software businesses out there, that’s enormous. If you start adding intelligence to that, the scale of the market is so large that it’s much more important to us that we can take this incredibly important technology and deploy it safely in ways that actually improve people’s lives. It could be making products cheaper or helping organizations make their services more efficient.”

If that’s the case, then does Faculty have any kind of ethics panel overseeing its work? “We have an internal ethics panel. We have a set of principles and if we think a project might violate those principles, it gets referred to that ethics panel. It’s randomly selected from across faculty. So we’re quite careful about the projects that we work on and don’t. But to be honest, the vast majority of stuff that’s going on is very vanilla. They are just clearly ‘good for the world’ projects. The vast majority of our work is doing good work for corporate clients to help them make their businesses that bit more efficient.”

I pressed him to expand on this issue of ethics and the potential for bias. He says Faculty “builds safety in from the start. Oddly enough, the reason I first got interested in AI was reading Nick Bostrom’s work about superintelligence and the importance of AI safety. And so from the very, very first fellowship [Faculty AI researchers are called Fellows] all the way back in 2014, we’ve taught the fellows about AI safety. Over time, as soon as we were able, we started contributing to the research field. So, we’ve published papers in all of the biggest computer science conferences Neurips, ICM, ICLR, on the topic of AI safety. How to make algorithms fair, private, robust and explainable. So these are a set of problems that we care a great deal about. And, I think, are generally ‘underdone’ in the wider ecosystem. Ultimately, there shouldn’t be a separation between performance and safety. There is a bit of a tendency in other companies to say, ‘Well, you can either have performance, or you can have safety.’ But of course, we know that’s not true. The cars today are faster and safer than the Model T Ford. So it’s a sort of a false dichotomy. We’ve invested a bunch of effort in both those capabilities, so we obviously want to be able to create a wonderful performance for the task at hand, but also to ensure that the algorithms are fair, private, robust and explainable wherever required.”

That also means, he says, that AI might not always be the “bogeyman” the phrase implies: “In some cases, it’s probably not a huge deal if you’re deciding whether to put a red jumper or a blue jumper at the top of your website. There are probably not huge ethical implications in that. But in other circumstances, of course, it’s critically important that the algorithms are safe and are known to be safe and are trusted by both the users and anyone else who encounters them. In a medical context, obviously, they need to be trusted by the doctors and the patients need to make sure they actually work. So we’re really at the forefront of deploying that stuff.”

Last year the Guardian reported that Faculty had won seven government contracts in 18 months. To what does he attribute this success? “Well, I mean, we lost an enormous number more! We are a tiny supplier to government. We do our best to do work that is valuable to them. We’ve worked for many, many years with people at the home office,” he tells me.

“Without wanting to go into too much detail, that 18 months stretches over multiple prime ministers. I was appointed to the AI Council under Theresa May. Any sort of insinuations on this are just obviously nonsense. But, at least historically, most of our work was in the private sector and that continues to be critically important for us as an organization. Over the last year, we’ve tried to step up and do our bit wherever we could for the public sector. It’s facing such a big, difficult situation around COVID, and we’re very proud of the things we’ve managed to accomplish with the NHS and the impact that we had on the decisions that senior people were able to undertake.”

Returning to the issue of politics I asked him if he thought — in the wake of events such as Brexit and the election of Donald Trump, which were both affected by AI-driven political campaigning — AI is too dangerous to be applied to that arena? He laughed: “It’s a funny old funny question… It’s a really odd way to phrase a question. AI is just a technology. Fundamentally, AI is just maths.”

I asked him if he thought the application of AI in politics had had an outsized or undue influence on the way that political parties have operated in the last few years: “I’m afraid that is beyond my knowledge,” he says. But does Faculty have regrets about working in the political sphere?

“I think we’re just focused on our work. It’s not that we have strong feelings, either way, it’s just that from our perspective, it’s much, much more interesting to be able to do the things that we care about, which is deploying AI in the real world. It’s a bit of a boring answer! But it is truly how we feel. It’s much more about doing the things we think are important, rather than judging what everyone else is doing.”

Lastly, we touched on the data science capabilities of the U.K. and what the new fundraising will allow the company to do.

He said: “We started an education program. We have roughly 10% of the U.K.’s PhDs in physics, maths, engineering, applying to the program. Roughly 400 or so people have been through that program and we plan to expand that further so that more and more people get the opportunity to start a career in data science. And then inside Faculty specifically, we think we’ll be able to create 400 new jobs in areas like software engineering, data science, product management. These are very exciting new possibilities for people to really become part of the technology revolution. I think there’s going to be a wonderful new energy in Faculty, and hopefully a positive small part in increasing the U.K. tech ecosystem.”

Warner comes across as sincere in his thoughts about the future of AI and is clearly enthusiastic about where Faculty can take the whole field next, both philosophically and practically. Will Faculty soon be challenging that other AI leviathan, DeepMind, for access to all those PhDs? There’s no doubt it will.

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Laurel Bowden of VC firm 83North on the European deep tech and startup ecosystems

London and Tel Aviv based VC firm 83North has closed out its fifth fund at $300 million, as we reported earlier. It last raised a $250 million fund in 2017 and expects to continue the same investment mix, while tracking developments in emerging areas like healthcare AI and autonomous vehicles.

In a conversation with general partner Laurel Bowden, the veteran investor shared a few further thoughts with Extra Crunch — talking about the tech scene in Europe vs Israel, what the firm looks for in a team and tips on scaling globally.

The interview has been lightly edited for clarity. 

TechCrunch: Is Europe starting to catch up to Israel when it comes to deep tech startups?

Laurel Bowden: We clearly think we have in our portfolio some deep tech. And in other VC portfolios too — there’s clearly some deep tech [coming out of Europe]. And then on the reverse side you’ve seen more consumer-related stuff coming out of Israel. But still if you take a blanket look, we see more data infrastructure, security, storage coming out of Israel than we see in Europe — that’s for sure.

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Huawei 5G indecision is hitting UK’s relations abroad, warns committee

The U.K.’s next prime minister must prioritize a decision on whether or not to allow Chinese tech giant Huawei to be a 5G supplier, a parliamentary committee has urged — warning that the country’s international relations are being “seriously damaged” by ongoing delay.

In a statement on 5G suppliers, the Intelligence and Security committee (ISC) writes that the government must take a decision “as a matter of urgency.”

Earlier this week another parliamentary committee, which focuses on science and technology, concluded there is no technical reason to exclude Huawei as a 5G supplier, despite security concerns attached to the company’s ties to the Chinese state, though it did recommend it be excluded from core 5G supply.

The delay in the U.K. settling on a 5G-supplier policy can be linked not only to the complexities of trying to weigh and balance security considers with geopolitical pressures but also ongoing turmoil in domestic politics, following the 2016 EU referendum Brexit vote — which continues to suck most of the political oxygen out of Westminster. (And will very soon have despatched two U.K. prime ministers in three years.)

Outgoing PM Theresa May, whose successor is due to be selected by a vote by Conservative Party members next week, appeared to be leaning toward giving Huawei an amber light earlier this year.

A leak to the press from a National Security Council meeting back in April suggested Huawei would be allowed to provide kit, but only for non-core parts of 5G networks — raising questions about how core and non-core are delineated in the next-gen networks.

The leak led to the sacking by May of the then defense minister, Gavin Williamson, after an investigation into confidential information being passed to the media in which she said she had lost confidence in him.

The publication of a government Telecoms Supply Chain Review, whose terms of reference were published last fall, has also been delayed — leading carriers to press the government for greater clarity last month.

But with May herself now on the way out, having agreed in May to step down as PM, the decision on 5G supply is on hold.

It will be down to either Boris Johnson or Jeremy Hunt, the two remaining contenders to take over as PM, to choose whether or not to let the Chinese tech giant supply U.K. 5G networks.

Whichever of the men wins the vote, they will arrive in the top job needing to give their full attention to finding a way out of the Brexit morass — with a mere three months til an October 31 Brexit extension deadline looming. So there’s a risk 5G may not seem as urgent an issue and a decision again be kicked back.

In its statement on 5G supply, the ISC backs the view expressed by the public-facing branch of the U.K.’s intelligence service that network security is not dependent on any one supplier being excluded from building it — writing that: “The National Cyber Security Centre… has been clear that the security of the UK’s telecommunications network is not about one company or one country: the ‘flag of origin’ for telecommunications equipment is not the critical element in determining cyber security.”

The committee argues that “some parts of the network will require greater protection” — writing that “critical functions cannot be put at risk” but also that there are “less sensitive functions where more risk can be carried”, albeit without specifying what those latter functions might be.

“It is this distinction — between the sensitivity of the functions — that must determine security, rather than where in the network those functions are located: notions of ‘core’ and ‘edge’ ate therefore misleading in this context,” it adds. “We should therefore be thinking of different levels of security, rather than a one size fits all approach, within a network that has been built to be resilient to attack, such that no single action could disable the system.”

The committee’s statement also backs the view that the best way to achieve network resilience is to support diversity in the supply chain — i.e. by supporting more competition.

But at the same time it emphasizes that the 5G supply decision “cannot be viewed solely through a technical lens — because it is not simply a decision about telecommunications equipment.”

“This is a geostrategic decision, the ramifications of which may be felt for decades to come,” it warns, raising concerns about the perceptions of U.K. intelligence sharing partners by emphasizing the need for those allies to trust the decisions the government makes.

It also couches a U.K. decision to give Huawei access a risk by suggesting it could be viewed externally as an endorsement of the company, thereby encouraging other countries to follow suit — without paying the full (and it asserts vitally) necessary attention to the security piece.

“The UK is a world leader in cyber security: therefore if we allow Huawei into our 5G network we must be careful that that is not seen as an endorsement for others to follow. Such a decision can only happen where the network itself will be constructed securely and with stringent regulation,” it writes.

The committee’s statement goes on to raise as a matter of concern the U.K.’s general reliance on China as a technology supplier.

“One of the lessons the UK Government must learn from the current debate over 5G is that with the technology sector now monopolised by such a few key players, we are over-reliant on Chinese technology — and we are not alone in this, this is a global issue. We need to consider how we can create greater diversity in the market. This will require us to take a long term view — but we need to start now,” it warns.

It ends by reiterating that the debate about 5G supply has been “unnecessarily protracted” — pressing the next U.K. prime minister to get on and take a decision “so that all concerned can move forward.”

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Negative? How a Navy veteran refused to accept a ‘no’ to his battery invention

Decades ago, a young naval engineer on a British nuclear submarine started taking an interest in the electric batteries helping to run his vessel. Silently running under the frozen polar ice cap during the Cold War, little did this submariner know that, in the 21st century, batteries would become one of the biggest single sectors in technology. Even the planet. But his curiosity stayed with him, and almost 20 years ago he decided to pursue that dream, born many years beneath the waves.

The journey for Trevor Jackson started, as many things do in tech, with research. He’d become fascinated by the experiments done not with lithium batteries, which had come to dominate the battery industry, but with so-called “aluminum-air” batteries.

Technically described as “(Al)/air” batteries, these are the — almost — untold story from the battery world. For starters, an aluminum-air battery system can generate enough energy and power for driving ranges and acceleration similar to gasoline-powered cars.

Sometimes known as “Metal-Air” batteries, these have been successfully used in “off-grid” applications for many years, just as batteries powering army radios. The most attractive metal in this type of battery is aluminum because it is the most common metal on Earth and has one of the highest energy densities.

Think of an air-breathing battery which uses aluminum as a “fuel.” That means it can provide vehicle power with energy originating from clean sources (hydro, geothermal, nuclear etc.). These are the power sources for most aluminum smelters all over the world. The only waste product is aluminum hydroxide and this can be returned to the smelter as the feedstock for — guess what? — making more aluminum! This cycle is therefore highly sustainable and separate from the oil industry. You could even recycle aluminum cans and use them to make batteries.

Imagine that — a power source separate from the highly polluting oil industry.

But hardly anyone was using them in mainstream applications. Why?

trevor battery 2

Aluminum-air batteries had been around for a while. But the problem with a battery which generated electricity by “eating” aluminum was that it was simply not efficient. The electrolyte used just didn’t work well.

This was important. An electrolyte is a chemical medium inside a battery that allows the flow of electrical charge between the cathode and anode. When a device is connected to a battery — a light bulb or an electric circuit — chemical reactions occur on the electrodes that create a flow of electrical energy to the device.

When an aluminum-air battery starts to run, a chemical reaction produces a “gel” by-product which can gradually block the airways into the cell. It seemed like an intractable problem for researchers to deal with.

But after a lot of experimentation, in 2001, Jackson developed what he believed to be a revolutionary kind of electrolyte for aluminum-air batteries which had the potential to remove the barriers to commercialization. His specially developed electrolyte did not produce the hated gel that would destroy the efficiency of an aluminum-air battery. It seemed like a game-changer.

The breakthrough — if proven — had huge potential. The energy density of his battery was about eight times that of a lithium-ion battery. He was incredibly excited. Then he tried to tell politicians…

trevor battery 1

Despite a detailed demonstration of a working battery to Lord “Jim” Knight in 2001, followed by email correspondence and a promise to “pass it onto Tony (Blair),” there was no interest from the U.K. government.

And Jackson faced bureaucratic hurdles. The U.K. government’s official innovation body, Innovate UK, emphasized lithium battery technology, not aluminum-air batteries.

He was struggling to convince public and private investors to back him, such was the hold the “lithium battery lobby” had over the sector.

This emphasis on lithium batteries over anything else meant U.K. the government was effectively leaving on the table a technology which could revolutionize electrical storage and mobility and even contribute to the fight against carbon emission and move the U.K. toward its pollution-reduction goals.

Disappointed in the U.K., Jackson upped sticks and found better backing in France, where he moved his R&D in 2005.

Finally, in 2007, the potential of Jackson’s invention was confirmed independently in France at the Polytech Nantes institution. Its advantages over Lithium Ion batteries were (and still are) increased cell voltage. They used ordinary aluminum, would create very little pollution and had a steady, long-duration power output.

As a result, in 2007 the French Government formally endorsed the technology as “strategic and in the national interest of France.”

At this point, the U.K.’s Foreign Office suddenly woke up and took notice.

It promised Jackson that the UKTI would deliver “300%” effort in launching the technology in the U.K. if it was “repatriated” back to the U.K.

However, in 2009, the U.K.’s Technology Strategy Board refused to back the technology, citing that the Automotive Council Technology Road Map “excluded this type of battery.” Even though the Carbon Trust agreed that it did indeed constitute a “credible CO2-reduction technology,” it refused to assist Jackson further.

Meanwhile, other governments were more enthusiastic about exploring metal-air batteries.

The Israeli government, for instance, directly invested in Phinergy, a startup working on very similar aluminum-air technology. Here’s an, admittedly corporate, video which actually shows the advantages of metal-air batteries in electric cars:

The Russian Aluminum company RUSAL developed a CO2-free smelting process, meaning they could, in theory, make an aluminum-air battery with a CO2-free process.

Jackson tried to tell the U.K. government they were making a mistake. Appearing before the Parliamentary Select Committee for business-energy and industrial strategy, he described how the U.K. had created a bias toward lithium-ion technology which had led to a battery-tech ecosystem which was funding lithium-ion research to the tune of billions of pounds. In 2017, Prime Minister Theresa May further backed the lithium-ion industry.

Jackson (below) refused to take no for an answer.

PHOTO 2019 06 18 19 35 52

He applied to U.K.’s Defence Science and Technology Laboratory. But in 2017 they replied with a “no-fund” decision which dismissed the technology, even though DSTL had an actual programme of its own on aluminum-air technology, dedicated to finding a better electrolyte, at Southampton University.

Jackson turned to the auto industry instead. He formed his company MAL (branded as “Metalectrique“) in 2013 and used seed funding to successfully test a long-range design of power pack in its laboratory facilities in Tavistock, U.K.

Here he is on a regional BBC channel explaining the battery:

He worked closely with Lotus Engineering to design and develop long-range replacement power packs for the Nissan Leaf and the Mahindra Reva “G-Wiz’ electric cars. At the time, Nissan expressed a strong interest in this “Beyond Lithium Technology” (their words) but they were already committed to fitting LiON batteries to the Leaf. Undeterred, Jackson concentrated on the G-Wiz and went on to produce full-size battery cells for testing and showed that aluminum-air technology was superior to any other existing technology.

And now this emphasis on lithium-ion is still holding back the industry.

The fact is that lithium batteries now face considerable challenges. The technology development has peaked; unlike aluminum, lithium is not recyclable and lithium battery supplies are not assured.

The advantages of aluminum-air technology are numerous. Without having to charge the battery, a car could simply swap out the battery in seconds, completely removing “charge time.” Most current charging points are rated at 50 kW which is roughly one-hundredth of that required to charge a lithium battery in five minutes. Meanwhile, hydrogen fuel cells would require a huge and expensive hydrogen distribution infrastructure and a new hydrogen generation system.

But Jackson has kept on pushing, convinced his technology can address both the power needs of the future, and the climate crisis.

Last May, he started getting much-needed recognition.

The U.K.’s Advanced Propulsion Centre included the Metalectrique battery as part of its grant investment into 15 U.K. startups to take their technology to the next level as part of its Technology Developer Accelerator Programme (TDAP). The TDAP is part of a 10-year program to make U.K. a world-leader in low-carbon propulsion technology.

The catch? These 15 companies have to share a paltry £1.1 million in funding.

And as for Jackson? He’s still raising money for Metalectrique and spreading the word about the potential for aluminum-air batteries to save the planet.

Heaven knows, at this point, it could use it.

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UK gives Huawei an amber light to supply 5G

The U.K. government will allow Huawei to be a supplier for some non-core parts of the country’s 5G networks, despite concerns that the involvement of the Chinese telecoms vendor could pose a risk to national security. But it will be excluded from core parts of the networks, according to reports in national press.

The news of prime minister Theresa May’s decision made during a meeting of the National Security Council yesterday was reported earlier by The Telegraph. The newspaper said multiple ministers raised concerns about her approach — including the Home Secretary, Foreign Secretary, Defence Secretary, International Trade Secretary and International Development Secretary.

The FT reports that heavy constraints on Huawei’s involvement in U.K. 5G networks reflect the level of concern raised by ministers.

May’s decision to give an amber light to Huawei’s involvement in building next-gen 5G networks comes a month after a damning report by a U.K. oversight body set up to evaluate the Chinese company’s approach to security.

The fifth annual report by the Huawei Cyber Security Evaluation Centre Oversight Board blasted “serious and systematic defects” in its software engineering and cyber security competence.

Though the oversight board stopped short of calling for an outright ban — despite saying it could provide “only limited assurance that all risks to U.K. national security from Huawei’s involvement in the U.K.’s critical networks can be sufficiently mitigated long-term.”

But speaking at a cybersecurity conference in Brussels in February, Ciaran Martin, the CEO of the U.K.’s National Cyber Security Centre (NCSC), expressed confidence U.K. authorities can mitigate any risk posed by Huawei.

The NCSC is part of the domestic GCHQ signals intelligence agency.

Dr. Lukasz Olejnik, an independent cybersecurity advisor and research associate at the Center for Technology and Global Affairs at Oxford University, told TechCrunch he’s not surprised by the government’s decision to work with Huawei.

“It’s a message that was long-expected,” he said. “U.K. officials have been carefully sending signals in the previous months. In a sense, this makes us closer to the end of the 5G drama.”

“With proper management most risk can be mitigated. It all depends on the strategic planning,” he added.

“I believe the level of [security] responsibility at telecoms will remain similar to today’s. The main message expected by telecoms is clarity to enable them to move on with infrastructure.”

The heaviest international pressure to exclude the Chinese vendor from next-gen 5G networks has been coming from the U.S., where President Trump has been leaning on key intelligence-sharing allies to act on espionage fears and shut out Huawei — with some success.

Last year Australia and New Zealand both announced bans on Chinese kit vendors citing national security fears.

But in Europe governments appear to be leaning in another direction: toward managing and mitigating potential risks rather than shutting the door completely.

The European Commission has also eschewed pushing for a pan-EU ban — instead issuing recommendations encouraging member states to step up individual and collective attention on network security to mitigate potential risks.

It has warned too — and conversely — of the risk of fragmentation to its flagship “digital single market” project if member state governments decide to slam doors on their own. So, at the pan-EU level, security considerations are very clearly being weighed against strategic commercial imperatives and technology priorities.

Equally, individual European governments appear to have little appetite to throw a spanner in the 5G works, given the risk of being left lagging as cellular connectivity evolves and transforms — an upgrade that’s expected to fuel and underpin developments in artificial intelligence and big data analysis, among other myriad and much-hyped benefits.

In the U.K.’s case, national security concerns have been repeatedly brandished as justification for driving through domestic surveillance legislation so draconian that parts of it have later been unpicked by both U.K. and EU courts. Even if the same security concerns are here, where 5G networks are concerned, being deemed “manageable” — rather than grounds for a similarly draconian approach to technology procurement.

It’s not clear at this stage how extensively Huawei will be involved in supplying and building U.K. 5G networks.

The NCSC sent us the following statement in response to questions:

National Security Council discussions are confidential. Decisions from those meetings are made and announced at the appropriate time through the established processes.

The security and resilience of the UK’s telecoms networks is of paramount importance.

As part of our plans to provide world class digital connectivity, including 5G, we have conducted an evidence based review of the supply chain to ensure a diverse and secure supply base, now and into the future. This is a thorough review into a complex area and will report with its conclusions in due course.

“How ‘non-core’ will be defined is anyone’s guess but it would have to be clearly defined and publicly communicated,” Olejnik also told us. “I would assume this refers to government and military networks, but what about safety communication or industrial systems, such as that of power plants or railroad? That’s why we should expect more clarity.”

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