The Sunday Brew #77
In this brew - AI patents by country in a picture | Chesterton's Fence & OODA Loop | Apple's $110 Billion Share Buyback, Binance founder gets jail time and Tesla gets FSD approval in China
Welcome to The Sunday Brew, weekly 1-2-3 newsletter by The Percolator. Every Sunday we drop in your inbox 1 story in a picture, 2 concepts, ideas or frameworks to expand your horizons and 3 news from the week, to keep you updated.
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ONE STORY IN A PICTURE
TWO IDEAS, FRAMEWORKS OR CONCEPTS
This week we bring to you a mental model and a framework for decision making - Chesterton's Fence & OODA Loop
Chesterton's Fence
Chesterton's Fence is a concept coined by the English writer and philosopher G.K. Chesterton. Picture this: imagine you're walking down a country road and you stumble upon a fence in the middle of nowhere. Now, before you decide to tear it down or jump over it, Chesterton suggests you ask yourself a crucial question: "Why was this fence put here in the first place?"
The idea behind Chesterton's Fence is simple yet profound. It's a reminder to respect the wisdom of tradition and existing systems. Before you advocate for change or disruption, take the time to understand the purpose behind established practices or structures. Just because something seems outdated or unnecessary to you doesn't mean it doesn't serve a vital function.
Chesterton's Fence encourages thoughtful inquiry and prudence in the face of change. It's a valuable mental model, reminding us to tread carefully and consider the reasons behind what we encounter before we rush to alter it.
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OODA Loop
The OODA Loop is a framework developed by military strategist and U.S. Air Force Colonel John Boyd. The acronym stands for "Observe, Orient, Decide, Act."
Here's how it works:
Observe: This is the first step, where you gather information about your environment, your opponents, and the situation at hand. You need to be aware of what's going on around you.
Orient: Once you've observed, it's time to make sense of the information you've gathered. This step involves analysing the data, understanding your position relative to others, and assessing your options.
Decide: After orienting yourself, you need to make a decision based on the information and analysis. This decision should be timely and effective, considering the circumstances and your objectives.
Act: Finally, you implement the decision you've made. This step involves executing your plan of action swiftly and decisively.
The OODA Loop is not a one-time process. It's a continuous cycle. As you act, the situation changes, requiring you to observe again, orient yourself to the new information, decide on a course of action, and act accordingly. It's all about adapting and staying ahead of the game, especially in dynamic and uncertain environments.
The OODA Loop isn't just for the military; it's widely used in business, sports, and other fields where quick decision-making and adaptability are essential. It's a powerful tool for staying agile and maintaining a competitive edge.
THREE NEWS FROM THE WEEK
Apple Announces Largest Stock Buyback in U.S. History at $110 Billion
Tech giant Apple sent shockwaves through the market when they announced this week, a record-breaking $110 billion stock buyback program. This dwarfs the previous record of $100 billion, set by Apple itself in 2018.
The news, which coincided with Apple's quarterly earnings report, was met with enthusiasm by investors. Apple's stock price surged 6% in after-hours trading. The buyback program signifies Apple's confidence in its future prospects and its commitment to rewarding shareholders.
Apple's massive cash reserves, fuelled by strong iPhone and Mac sales, allow them to pursue this aggressive buyback strategy.
In addition to the buyback, Apple also announced a 4% increase in its quarterly cash dividend. This indicates a balanced approach to capital allocation, returning value to shareholders through both stock buybacks and dividends.
The news of Apple's buyback program is likely to reignite the debate about share repurchases. Proponents argue that buybacks boost stock prices and signal confidence in the company's leadership. Critics, however, argue that buybacks can stifle investment in research and development and exacerbate income inequality.
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Binance Founder Gets Four Months in Prison for Money Laundering Violations
In a landmark case for the cryptocurrency industry, Changpeng Zhao, founder of the world's largest cryptocurrency exchange Binance, was sentenced to four months in prison today. Zhao, also known as "CZ" in crypto circles, pleaded guilty in November 2023 to charges of failing to implement adequate anti-money laundering (AML) controls at Binance.
The sentencing comes after a months-long investigation by the U.S. Department of Justice, which accused Binance of enabling illicit financial transactions, including those linked to child exploitation, drug trafficking, and terrorism. Prosecutors had sought a harsher sentence of three years, arguing that Zhao's actions were egregious and on an "unprecedented scale."
U.S. District Judge Richard Jones acknowledged Zhao's cooperation with authorities and his acceptance of responsibility during the sentencing hearing. However, the judge emphasized that Zhao prioritized Binance's growth over regulatory compliance, allowing the platform to become a hub for criminal activity.
"You had the resources to ensure compliance," Judge Jones said to Zhao, "and you failed to do so."
As part of the plea deal, Binance also agreed to pay a hefty $4.3 billion fine to settle related allegations. Zhao himself was fined an additional $50 million and stepped down as CEO of Binance.
The sentencing marks a significant victory for regulators seeking to rein in the largely unregulated cryptocurrency industry. It also raises questions about the future of Binance, a company facing intense scrutiny and a potential leadership shakeup.
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Tesla Scores FSD Win in China, Boosting Market Ambitions
Tesla received a preliminary green light from Chinese authorities to launch its Full Self-Driving (FSD) software package, potentially marking a significant turning point for the electric carmaker in the world's largest auto market.
This news comes after Tesla CEO Elon Musk's surprise visit to Beijing last week, where he reportedly met with top government officials. The approval signifies a crucial step for Tesla, which has been facing declining sales in China and intense competition from domestic EV manufacturers.
Previously, Tesla offered a limited version of FSD in China with restricted functionalities. However, data security concerns and regulatory hurdles stalled a full rollout. This tentative approval paves the way for a more comprehensive FSD experience, including features like navigating traffic lights, stop signs, and potentially autonomous driving on city streets.
While this is positive news, some challenges persist. The final details and limitations of the approved FSD system are still unclear. Additionally, China's autonomous driving regulations are still evolving, and Tesla will need to comply with any further requirements.
Despite these considerations, Tesla's FSD approval in China is a major win for the company. It demonstrates progress in addressing data security concerns and signifies China's willingness to embrace technological advancements in the automotive sector. This move could be a catalyst for Tesla to regain momentum in the Chinese market and further fuel its global ambitions for self-driving technology.
The Sunday Brew by The Percolator brings to you curated news on tech, business & entrepreneurship, from across the internet to give your week a perfect start.
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