I spent some time yesterday talking with Mark Johnson of Descartes Labs–another example of how big data and machine learning are driving massive change in legacy industries. Descartes ingests images from satellites, then applies machine intelligence to help companies like Cargill understand what is happening to their global supplies of grain and other commodities. To date, such companies have largely been immune from the digital revolution–“you couldn’t digitize corn,” Johnson says. But using the technology developed at Descartes, they can create “digital twins” of their physical businesses and map it against other data sets, like weather, to guide production, shipping, trading, and other decisions.
Johnson sees this as the beginning of a new generation of “data-animated organizations” that will be the functional equivalent of self-driving cars. They will use machine intelligence to constantly maximize supply chains, investment decisions, pricing, etc. That’s one more way in which data and A.I. will be the dominant business story of the coming decade. You can read Michal Lev-Ram’s March story in Fortune on Descartes here.
Also today, Fortune is releasing its deep dive into the disappearing middle class, which you can read here. This may not strike you as a business story, but believe me, it is. The widening gap between rich and poor and the consequent erosion of political support for the economic system may be the greatest obstacle to ensuring the economic promise of “data-animated organizations” becomes a reality. Worth your attention.
More news below.
Altria Group (formerly Philip Morris) is finalizing an offer for 35% of electronic cigarette maker Juul at a valuation of $38 billion. That’s double the vaping startup’s last valuation a few months ago. Juul may bring in over $2 billion in sales this year, with profit margins as high as 75%. E-cigarettes got their start as smoking cessation tools but are attracting and addicting young consumers and others who have never smoked tobacco cigarettes. Wall Street Journal.
Big pharmaceutical firms have warned California state buyers that they are raising prices in January, despite federal efforts to rein them in. Novartis, Bayer, and almost thirty other companies have filed notices required by California for any drug whose list price will rise more than 16% in a two-year period. Reuters.
China Shipbuilding Industry Corp (CSIC) employees are being lectured by Chinese authorities on handling state secrets, after the conviction Monday of former general manager Sun Bo for revealing state secrets, a crime punishable by death. CSIC built China’s first aircraft carrier. South China Morning Post.
The biannual China CFO Survey by Deloitte showed growing pessimism among 108 business leaders working in and with China and Hong Kong. Some 82% of respondents said they “had become less optimistic” compared to 30% in the last poll. Respondents pointed to Southeast Asian countries as possible beneficiaries of this year’s U.S.-China trade tensions. CNBC.
Around the Water Cooler
Home for Christmas
Former Nissan chairman Carlos Ghosn and his advisor Greg Kelly may be out of their Tokyo jail cells on bail by Christmas. A court Thursday refused to extend their initial detention in their salary-reporting case. Financial Times.
Home Sometime in January
President Donald Trump said late Wednesday that it is time to bring home the 2,000 American soldiers in Syria. Russia welcomed the idea while the United Kingdom said that Islamic State forces there remained a threat. BBC.
The U.S. Treasury agreed to remove Rusal and En+ from its sanctions list if their leader, Oleg Deripaska, gave up control of the firms. Deripaska remains under sanctions for “malign activities” by Russia. Reuters.
Game for Crooked Jaw
Japan will leave the International Whaling Commission so that it can resume commercial whaling, though it will probably stick to its own economic zone. Japan, Norway, and Iceland are among the few countries that still whale on a commercial scale despite the IWC’s 30-year-old ban. The Mainichi.
This edition of CEO Daily was edited by Lucas Laursen. Find previous editions here, and sign up for other Fortune newsletters here.