The Robots Are Coming To Las Vegas

Oct 7, 2018
Originally published on October 7, 2018 2:37 pm

At the Vdara Hotel and Spa in Las Vegas, robots are at the front line of room service. "Jett" and "Fetch" are delivery robots, designed to look like dogs, each about three feet high.

They can bring items from the hotel's cafe right to your room. Among their many capabilities, they can travel alone across the lobby, remotely call for an elevator, and even alert guests when they arrive at their hotel room through an automated phone message.

It's not just Vdara that's experimenting with this technology. Other Las Vegas hotels, including the Renaissance Las Vegas, are using automation to cater to customers' needs. So too was the Mandarin Oriental before changing over to the Waldorf Astoria this summer. And at bars like the Tipsy Robot, it's the machines that are making the drinks.

It's a growing trend that could mean big changes for the 300,000 people who work in the city's gaming and hospitality industries. A recent study by the Institute for Spatial Economic Analysis (ISEA) found that two-thirds of all jobs in Las Vegas will most likely be automated by 2035.

At the Vdara, Jett and Fetch play a small part of a bigger strategy. Cliff Atkinson, senior vice president for hospitality at MGM Resorts International, which manages the Vdara, says automation can help transform the industry as many guests demand more of a customized experience.

"I see it as we eliminate front desks altogether and that you're able to check in over your phone," Atkinson says. "But the people that were at those front desk are still there. They're there to customize your journey, there to greet you at the car and they're there to escort you to your room to make sure you have everything you need. You can't replace that and that engagement."

Atkinson sees technology as an opportunity to retrain employees. Goodbye front desk agent, hello "lobby ambassador."

But according to the ISEA study, automation will most likely hit Las Vegas in the places most visitors don't see — like the back offices and fast food kitchens. Johannes Moenius, an economist at the University of Redlands, coauthored that research.

"Women will most likely be hit first," said Johannes Moenius, an economist at the University of Redlands and coauthor of the ISEA study. And, given the makeup of the hospitality industry, minorities are also at risk of losing their jobs first, said Moenius.

That's why the Culinary Union — which represents about 57,000 hospitality workers in Las Vegas, the majority of them women and Hispanic — made it a point to include language in its latest contract to protect its members from automation.

Geoconda Arguello Kline, secretary-treasurer of the union, helped negotiate those protections between the union and the casinos. Arguello Kline says workers whose jobs are changed by automation will be given retraining opportunities. Workers who leave their jobs get severance pay and benefits for sixth months.

"Now, the workers say they have the opportunity to get the training, to learning something new," she says, "At the same time, the workers, they will say, 'You know, I don't want this. This is not for me, but I have a choice.'"

Under the contract, the union is also given up to 180 days notice before a new technology is implemented. And that is already being seen in some hotels where workers who chopped salad have been replaced by automation.

Some automation is bringing in more employees. Take, for instance, The Tipsy Robot, a bar equipped with two robot bartenders that can make drinks with its robotic arms as orders come in from a tablet. No more questions on how to make the perfect Manhattan.

Victor Reza Valanejad is the venue's general manager and says not only is business growing, he's hiring more humans to help operate the robots.

"Believe me. It's not going to take any job," Valanejad says.

Others, like Arguello Kline, are more cautious in their view of the changing landscape.

"Right now, it feels like we're protected for the next five years," she says. "But in this five years we have to prepare for the next five years, what's going to happen."

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There is a trade war underway between the U.S. and China, and it is a big concern to the global economy. But there's another deeper rift brewing between Washington and Beijing. And that stems from China's effort to unseat the U.S. as the global leader when it comes to technology and innovation. In the next installment of our series on China's growing role in the world, we turn to the U.S., where NPR's Jackie Northam reports Washington is pushing back.

JACKIE NORTHAM, BYLINE: The U.S. is unquestionably the leader in advanced technology - think artificial intelligence, robotics, sophisticated weaponry. It's what's helped give the country a national security edge. That's something China has recognized and wants in on, says James Lewis, a specialist in China and technology at the Center for Strategic and International Studies.

JAMES LEWIS: The Chinese figured out that technology is the key to wealth and power. And the source of technology is still the West for China. So how do they get their hands on that Western technology?

NORTHAM: Three years ago, Beijing unveiled its Made in China 2025 strategy, which calls for the country to become a world leader in advanced technologies, including artificial intelligence, AI. As part of that, China is forming global partnerships, pumping massive resources into tech firms at home, in Europe and here in the U.S.

MICHAEL BROWN: I'd say they're very systematic, very long term in their approach. And it's very well-funded.

NORTHAM: Michael Brown is with the Pentagon's Defense Innovation Unit in Silicon Valley. He says there's serious concern in Washington that China is acquiring too much sensitive U.S. technology and transferring it back home.

BROWN: They don't play by the same rules that we do. So cybertheft is on the table. Industrial espionage is on the table - which could include recruiting key talent at networking events that are sponsored by the Chinese government, working with U.S. universities.

NORTHAM: Just last week, Bloomberg reported the U.S. was investigating whether China allegedly infiltrated the Pentagon and major companies, such as Apple and Amazon, by building spy chips into server motherboards. The motherboards were manufactured in China. The companies deny the allegations. But there are other ways China is making inroads to capture American innovation.

There's a quiet leafy part of Silicon Valley called Sunnyvale, and a lot of the tech giants have a presence here. There's Amazon Labs, LinkedIn, Yahoo. And I'm coming up now to a Google complex. And I can actually see some of the workers sitting at picnic tables and enjoying the fine weather. Just behind the Google complex is a Chinese company called Baidu. And it's Google's rival.

Baidu is China's largest Internet search provider. It opened this innovation center here in Silicon Valley with a focus on self-driving vehicles. And other Chinese tech powerhouses - Alibaba, Tencent, Huawei - also have their own research and development centers here. Instead of buying an existing U.S. business, the Chinese tech giants come in and build a new company from the ground up. These moves are called green field investments. And they hire away a lot of U.S. workers, says the CSIS' Lewis.

LEWIS: People change jobs frequently in the tech industry. And you say, I'll pay you a little bit more than the market rate. You'll get a lot of talent. This is a way to acquire knowhow.

NORTHAM: There's also been a surge of investments in tech startups through Chinese venture capital. Adam Lysenko, a senior analyst at Rhodium Group, an economic research firm, says there were more than 1,300 rounds of funding for U.S. startups with at least one Chinese investor over the past eight years.

ADAM LYSENKO: It is very common for Chinese firms to have some sort of ties to the government. It might just be because they have to answer to the government and party leaders back at home. And that infers the state some level of control.

NORTHAM: Lysenko says this has become a concern in national security circles because the nature of emerging technology is inherently dual use. In other words, the AI algorithms used to help speed up your smartphones could also be applied to weapons on the battlefield. Lysenko says while he's not aware of any smoking-gun case where a Chinese venture capital has plundered sensitive technology from a startup, it's widely acknowledged that a risk exists.

LYSENKO: That venture capital and other minority investments provide Chinese investors to access potentially sensitive technologies, particularly ones that are in, in a sense, an early stage where U.S. governments haven't had a full chance to evaluate the implications of those technologies.

NORTHAM: But for many American tech startups, Chinese investment can be critical.

CHRIS NICHOLSON: I think we got lucky. We got a beautiful office, right? It used to be an architectural consulting firm.

NORTHAM: Chris Nicholson is the CEO of Skymind, which makes cutting-edge artificial intelligence software. Daylight pours through the large windows overlooking San Francisco's Mission Street.

NICHOLSON: Mission between 9th and 10th is a little rough, which is not great when you're trying to impress clients.

NORTHAM: Nicholson helped create Skymind about four years ago. He says the company, like many startups, was very fragile in the beginning, until it got its first investment of $200,000 from Chinese consumer tech giant Tencent.

NICHOLSON: And nobody else followed. But it allowed us to survive. And that's just - like, the whole trip of startups is just surviving. Buy yourself enough time until you can realize your idea and test it on the market.

NORTHAM: Skymind now has funding from some major American venture capitalists and a few smaller Chinese ones. Nicholson disputes that venture capital investors automatically gain access to startups' research or knowhow. Later-stage investors putting in much larger amounts typically ask for things like information rights and board seats. Nicholson says no investor has ever asked Skymind for confidential technical information.

NICHOLSON: Right now we have a board of two people. And it's me and my co-founder. And we're both Americans.

NORTHAM: For decades, funding for firms like Nicholson's was through the Defense Department. It helped create technological breakthroughs that led to things like semiconductors and miniaturized GPS. But that funding over the years has become slow and cumbersome while technology has been moving much faster in the private sector. The Pentagon recognized the problem and, in 2015, set up the DIU, the Defense Innovation Unit.


NORTHAM: A military engineer maneuvers a tiny drone as it buzzes above a tarmac at the DIU in Silicon Valley. Lt. Col. David Rothzeid says the Pentagon created the unit as a way to make it easier to get funding to startups.

DAVID ROTHZEID: We're trying to grow the defense industry base by enticing these companies that traditionally wouldn't work with us and don't honestly need to work with us but have a great capability that we would all benefit from.

NORTHAM: This alternate funding is one way Washington is trying to counter Chinese investment. The Trump administration has also been aggressive in blocking several large mergers and acquisitions of U.S. tech companies by Chinese firms. And Congress is beefing up laws on the books aimed at protecting U.S. technology from foreign governments. It will allow closer scrutiny of all sorts of Chinese inroads in the tech sector, says Mario Mancuso, a trade lawyer with Kirkland and Ellis.

MARIO MANCUSO: I think some deals where there are Chinese investors will be a lot harder. More deals will get a lot more scrutiny. And some deals just are not going to happen.

NORTHAM: Many U.S. tech companies push back against tougher laws on foreign investment, warning it could strangle innovation. Skymind's Nicholson again.

NICHOLSON: In Washington, D.C., people think innovation is an American monopoly. They think that people can't go anywhere else for innovation. That's not true. Tech is moving fast in a lot of different countries. So if we shut the door here, that capital is just going to flow through another door. And it's going to be outside of U.S. jurisdiction.

NORTHAM: And that's the conundrum for policymakers. How does the U.S. balance its national security concerns with its drive to be the leader in advanced technology? Jackie Northam, NPR News, Silicon Valley. Transcript provided by NPR, Copyright NPR.