Welcome to our new synthetic realities

Why it matters: The distinction between fact and fiction is up for grabs as the boundary separating them gets increasingly fuzzy. And arguments over whose reality is most real are already derailing politics and society.

• Entire synthetic universes are home to millions: Viral video games like Fortnite are now gathering places, replicating some of the rules of the real world and inventing new ones. Last month Andreessen Horowitz invested $16.5 million in Singularity 6, a "virtual society" game.
• On Snapchat and Instagram, incredible AI-powered face filters have become banal — an early hint of a near future where a layer of digital information, viewed through glasses or contacts, coats the world we see around us.
• On social media, filter bubbles calcify ideologies, recommendation algorithms quietly radicalize users, and trolls peddle outright disinformation.
• Deepfakes — videos, images and audio that are either manipulated or generated from scratch with AI are a powerful and potentially dangerous new tool for inventing totally convincing realities from whole cloth.

These technologies can enrich the physical world around us, supercharging art and our relationships with other humans. But just as the dominance of social media brought unforeseen harms, so might these developments.

• "People are already living in synthetic realities," says Justin Hendrix, director of the NYC Media Lab. "They feel like they're in a perpetual state of conflict."
• Social media rose on a wave of enthusiasm for its capacity to connect people and champion freedom. "We were blindsided" when the algorithms' underbelly began to show, Hendrix says. He leads a group of engineers, lawyers, VCs and others that meets quarterly to discuss the impacts of synthetic media on society.

In New York City last month, I saw the glimmers of newly emerging layers of reality.

• I visited Betaworks, a VC firm that recently ran an incubator for startups creating synthetic, AI-generated media — music, stock photography, even pop stars. "People are not limiting what they seem like in a virtual world to the rules of the physical world," says Matt Hartman, a Betaworks partner.
• At a Verizon 5G Lab, I saw a slime-green motion-capture room that can quickly make an animatable 3D model out of a person who stands inside. The model could be inserted into a film or a video game — or into a fake sex tape or some other compromising virtual situation.
• And at NYU, I met Paul Barrett at the Center for Business and Human Rights, who follows the destructive path of disinformation online. In a new report he outlines threats to the 2020 election, including the prospect that people will be tricked on social media into gathering — and clashing — in the real world.
• Bonus: Biking over the Williamsburg Bridge on a Saturday, I pedaled under a slogan painted on the steel trestlework: "Don't let reality ruin your life."

What's next: You can expect that these synthetic realities will become more engaging as the technologies that power them develop, and that you will spend more time in them — whether you know it or not.

Why it matters: As the Trump administration ramps up its multifront trade war with China, a number of foreign companies are reconsidering their place in the U.S. While some are concerned about doing business in an "America First" environment, others appear to be delaying big-ticket projects — with scores of jobs hanging in the balance.

• Chinese investment in the U.S. dropped almost 90% from 2016 ($46 billion) to 2018 ($5 billion), per the Rhodium Group. "Trade and other economic frictions between the two countries have substantially reduced the attractiveness of the U.S. as a destination for Chinese foreign direct investment," says Eswar Prasad, a trade policy expert at Cornell.

The backdrop: Chinese companies went from employing 500 U.S. workers in the manufacturing sector in 2007 to over 26,000 as of 2016, according to the Bureau of Economic Analysis. "It seemed like it was on this dramatic uptick," says Joe Parilla, a scholar at Brookings.

• In some cases, Chinese companies have stepped in to bail out failing American factories. As documented in Netflix's "American Factory," China's Fuyao Glass bought a shuttered General Motors plant in Ohio in 2014 and turned it into a glass supplier for the American automaker.

"FDI [foreign direct investment], including from China, has been a significant source of manufacturing employment growth," says Brookings' Mark Muro. "But now that is ebbing."

In Arkansas, 2 factories bought by Chinese companies stand vacant as the trade fight rages on.

• In 2017, a Chinese firm bought a factory in Forrest City, Arkansas, that had been empty for 10 years and pledged to create 800 jobs, an investment that would have made that company the biggest employer in the county, reports the American Communities Project. Two years later, the facility is still a ghost town.
• “There are various factors that have gone into the delay, but the main factor is the tariffs,” Forrest City Mayor Cedric Williams told the American Communities Project. “We’re at a standstill until they get that resolved.”

Another Chinese company's plan to build a paper mill is on hold in Arkadelphia, Arkansas. In an interview with Christian Science Monitor, Stephen Bell, who heads the city's chamber of commerce, called the trade conflict "a dark cloud hanging over the future of the project."

What to watch: In another potential blow to Chinese-owned companies in the U.S., the Trump administration is considering restricting American firms from investing in them, reports Bloomberg.

"If you saturate a neighborhood with dozens of dollar stores, there’s just no room left in the market for anyone else."

The big picture: There are about 30,000 dollar stores in the U.S. today — more than the total number of Walmarts and McDonald's combined. And Dollar Tree and Dollar General have plans to open 20,000 more.

The problem is more acute in some cities than others, per a report from the Institute for Local Self-Reliance, a nonprofit research and advocacy group that opposes concentrated economic power.

Consider Birmingham, where close to 70% of city residents live in food deserts and the 2 dollar giants have opened more than 40 locations in the last decade. Since 2005, 5 Birmingham supermarkets — undercut by the cheap chains — have closed, and the city has struggled to get new grocers to come to town, the report notes.

• Now Birmingham has passed a pair of laws: The city is banning new dollar stores from setting up shop within a mile of an existing location and it's financing the opening of new supermarkets.

Northeast Oklahoma City was confronted with the problem of dollar stores after its last grocery store closed in July.

• The city has now prohibited new dollar stores from opening within a mile of old ones unless the store commits to saving 500 square feet of floor space for fresh produce.

The other side:

• A Dollar General spokesperson told Axios: "We are disappointed a small number of policymakers have chosen to limit our ability to serve their constituents and communities."
• "Our stores provide an affordable and convenient fill-in shopping option for our customers in between their weekly or bi-weekly grocery store trips, all while creating more jobs and investing in the communities we serve," a Dollar Tree spokesperson said.

The bottom line: The backlash against dollar stores is here — and spreading. More cities, from small ones like Hutchinson, Kansas, to big metros like Cleveland and Fort Worth, are considering laws to limit the chains.

• The findings are a roadmap for politicians, the entertainment industry and technology executives seeking to tap into less romanticized measures of success.

"When you aren't saying publicly what you privately believe, you end up with really bad policies and with things that stay in place that nobody really wants. But nobody changes it,” said Todd Rose, president and cofounder of Populace.

• "Being famous" was the top answer for what respondents thought mattered according to society's view of success.
• But that was the last answer for what individuals felt was important to achieve to be successful in their own lives.
• Parenthood was the most common achievement for individuals' standards of success, but ranked at 33 out of 76 when people were asked about things society considers important for success.
• "Very conservative” Americans tend to consider being a parent twice as important as those who self-identified as "very liberal."
• Having an advanced degree was something respondents valued both in terms of how society judged them and how they judged themselves.
• Having a purpose in life, a couple of close friends and regularly seeing family were all important components to how people judged their own success — but so was not having to worry about money.
• Women were more likely than men to view fame and having a large social media following as important to society's view of success — something that may correlate to other trends like women being overrepresented on Instagram, Rose said.

Between the lines: Milestones and traits related to status, education and finances were at the top of the list for what most people believe others consider markers of success. But people said success in their own lives has more to do with educational achievement, relationships and personal character.

• "We can do something with that if we can just realize that this silent majority exists, and that it crosses political and ideological and other demographic bounds," Rose said.