S1: From the newsrooms of the Sydney Morning Herald and The Age.
S1: This is the morning edition. I'm Samantha Cylinder Morris. It's Wednesday,
S1: May 21st. We know, we know. Donald Trump has gone
S1: gangbusters in the Middle East, inking hundreds of millions of
S1: dollars worth of deals left, right and centre. But hidden
S1: within all the details about Trump's whirlwind trip, the Qatari jet,
S1: his bromance with the Saudi crown prince is one deal
S1: that you might have missed. Today, international and political editor
S1: Peter Hartcher on Donald Trump's microchip deal with the United
S1: Arab Emirates government, its inherent risks for the world and
S1: potential opportunity for Australia. Okay, Peter, first off, we've got
S1: to start with Donald Trump's bromance diplomacy. This is, of course,
S1: with what he's been doing in the Middle East, and
S1: the rest of us have been freaking out about this
S1: luxury airplane that Trump has accepted from the Qatari government,
S1: but not you, Hartcher, because you've zeroed in on another
S1: deal he has just signed in Abu Dhabi. Tell me
S1: about this.
S2: Well, I'm sure the $400 million 747 will help lubricate
S2: Trump's consideration of some of these arrangements.
S3: Spectacle in the air and on the ground. As Qatar
S3: rolled out the welcome mat for President Donald Trump amid
S3: growing controversy over his decision to accept a luxury jet
S3: from the nation.
S4: The fanfare began in the sky.
S2: Yes, his trip last late last week was to Saudi Arabia. Qatar.
S2: Ably assisted by the offer of the plane, I'm sure.
S2: Followed by the United Arab Emirates.
S5: Speaking to reporters on Air Force One, President Trump praised
S5: the leaders of those countries after a trip marked by
S5: business deals and lavish state dinners.
S6: It was a great four days. I think it was
S6: a historic four days in all three countries. You can't
S6: speak more highly. It's the job they've done.
S2: He didn't in his Middle East tour visit Israel, which
S2: was a notable omission.
S1: Very notable.
S2: The common element in the Arab nations stop stopovers was
S2: that all of them were were offering to invest large
S2: sums in the US in the hundreds of billions of dollars.
S7: Trump hopes to make history with the deals he brings
S7: back to the United States. On Thursday, the United Arab
S7: Emirates reaffirmed its commitment to invest $1.4 trillion in the
S7: fields of artificial intelligence, technology and energy in exchange for
S7: access to advanced American microchips.
S2: Trump's deal the UAE alone has promised to invest 1.4
S2: trillion USD in the US over ten years with the
S2: newest latest increment towards that total being a $200 billion
S2: package that Trump announced late last week while he was
S2: in Abu Dhabi, the capital of the UAE.
S1: And specifically, though you have zeroed in on a deal
S1: regarding computer chips. So tell us about this.
S2: Yeah, this is a really sensitive and difficult part of
S2: this deal, and it's become very controversial in the US.
S2: Most of the investment is unobjectionable traditional stuff. The United
S2: Arab Emirates saying we'll you know, we'll buy more Boeing
S2: jets for so many billions. We want to smelt aluminium
S2: in America for so many more billions. All of that
S2: stuff is traditional. But the really difficult part, and the
S2: controversial part, is that Trump agreed to sell to allow
S2: the sale to the UAE of hundreds of thousands, and
S2: perhaps over time, many more of the cutting edge semiconductor
S2: computer chips that are powering the evolution of artificial intelligence. Now,
S2: these are chips that are so exotic and so difficult
S2: to make that they are considered one of the last
S2: remaining edges that the US has over China in technology,
S2: because the Chinese have caught up or exceeded the US
S2: in many areas, and they're subject to export controls so
S2: that they can't get to China and many other countries.
S2: They can only get to trusted allies. And both in
S2: the US generally, but also in the Trump administration, a
S2: lot of voices have been raised to say, well, hang on,
S2: the UAE is not our most trusted ally. We can't
S2: be sure that giving them access to these chips won't
S2: end up with access to this technology going to China,
S2: and we shouldn't be doing the deal. But Trump overlooked
S2: all that and did the deal anyway.
S1: Okay, so tell us about this though, because you've written
S1: that Washington bans the sale of these top line chips
S1: to China. So what is so bad if China gets
S1: Ahold of these chips?
S2: Because the fear in Washington is that if the Chinese
S2: are able to get what is really one of the
S2: very last remaining technological advantages that the US holds, and
S2: I being a fast developing and unfolding technology with great
S2: potential to transform all sorts of fields of human endeavor,
S2: that it will allow a threshold moment of Chinese takeover
S2: of US capability, that that is the concern. And I
S2: you know, for most of us, we just still are
S2: standing around gawking, fascinated at ChatGPT like.
S1: Chimps playing with sticks in the mud, chimps with.
S2: Sticks in the mud. That's right. And, you know, lighting
S2: our first fire and standing back in shock and awe. But, yeah, um,
S2: in the business world, it's gone far beyond that. That
S2: was a couple of years ago now. Now the AI
S2: models are being Trained and produced and applied to do
S2: all sorts of things to transform everything. Simple stuff like
S2: customer service through to industrial applications on company floors, but
S2: also being used to to accelerate the development of other technologies.
S2: So it's an accelerator of of all sorts of things
S2: in a productivity enhancer. But it has great application in
S2: defence as well and military applications. So this is why
S2: it's such a sensitive technology as Joe Biden used to say,
S2: America is competing with China for the 21st century. They're
S2: the stakes. China wants to be the dominant global power,
S2: displacing the US. The US is making it easy for them,
S2: thanks to Donald Trump throwing away so many of the
S2: established advantages that the US had built up over the
S2: last century or two. And it's at it's at that crossroads.
S2: Hence the concern over giving these guys the UAE access
S2: to Nvidia chips to build. What they are saying is
S2: they're going to be their own enormous AI I precinct
S2: in the UAE. Like the Saudis, they see I as
S2: being an important economic supplement to their post-oil economies because
S2: they're all running out of oil.
S1: And just so I understand it, you know, if China
S1: wants to be the dominant global power, and as you say,
S1: I supercharges the capability of all kinds of things. When
S1: you get down to brass tacks, is what we're talking
S1: about here. Their army will be more powerful, their defense
S1: capabilities will be more powerful, their spying techniques will be
S1: more powerful. Is that what we're talking about? Essentially.
S2: Exactly what we're talking about.
S1: Right. Okay. So we've got this risk. But then this
S1: leads us to the second bit of news that piqued
S1: your interest last week that you've written about, which was
S1: to do with China. So tell us about that.
S2: Yes. This was a story broken by Reuters, which discovered
S2: that American officials whose job it is to tear apart
S2: and check sensitive bits of technology in US critical infrastructure systems,
S2: had found some unexplained Chinese communications gear built into solar
S2: energy systems that the US had imported from China. The
S2: communications gear was built into inverters, which are used to
S2: connect renewable energy systems like solar systems and wind turbines
S2: into the electricity grid, so they're pretty important. These inverters,
S2: according to the specifications, you know, the writing on the
S2: tin didn't mention anything about communications gear, but all this
S2: stuff was built in, and Reuters called them rogue gadgets
S2: built into the solar panel systems and inverters that the
S2: Chinese were selling to the US. The implication being that
S2: it would allow Beijing remotely to shut down the US
S2: systems that have embedded these communications gadgets. The further implication
S2: is that there's much more of this stuff scattered across
S2: US Infrastructure systems. And in fact, Samantha, seven years ago,
S2: I interviewed the guy who was then retiring as the
S2: head of the US NSA, the National Security Agency, which
S2: does all their signals intercept spying. It's their top line
S2: digital spying agency and online spying agency. And he was
S2: an Admiral, Mike Rogers. And I said to him, how
S2: much malware have the Chinese and the Russians planted in
S2: US critical infrastructure systems? Now that you've retired from the government,
S2: give us a clue. And his answer was startling. He said,
S2: we don't know. We will only find out when there's
S2: a crisis and they turn it off.
S1: It doesn't sound good. Hartcher.
S2: No. So what? The Reuters story from last week showed
S2: up is that not only has that and that was
S2: seven years ago, not only was that the situation then,
S2: but it's continuing to unfold that Chinese suppliers are putting
S2: potential shutdown Buttons into a critical infrastructure that is like
S2: energy systems and no doubt much more that they're selling
S2: to the US.
S1: And so just so I understand here, if this could
S1: what trigger widespread blackouts and it could destabilize power grids
S1: and what it could bring down all kinds of infrastructure,
S1: what could stop trains, it could stop communications, all that
S1: sort of stuff shuts down the electricity supply. Right.
S2: So the reason the US has now banned Chinese made EVs,
S2: electric vehicles is because of the fear that Beijing could,
S2: in the event of a crisis, order, that all the
S2: Chinese vehicles supplied EVs supplied to the US be shut
S2: down on American streets. Now there are millions of them.
S2: So what happens if a million cars in a city
S2: are suddenly disabled in the middle of the road? You
S2: can imagine the scene. So that's why the US has
S2: banned any more Chinese made EVs. The white House is
S2: looking at banning other types of Chinese technology as well,
S2: but it's that potential for sabotage in the event of
S2: a crisis and internal chaos that the Chinese would have
S2: the ability to create in the US, that the Americans
S2: are now, you know, belatedly, perhaps alert to. So the
S2: concern is that one day it will suit them to
S2: shut down US cities and power grids and all the
S2: rest of it. So that's the potential.
S1: Okay, so here's where we come to a very interesting
S1: turning point in your last column. And it gets a
S1: lot more hopeful because it sounds really bad, right. China
S1: can create all sorts of chaos that you've just laid out.
S1: But you say that this is actually an opportunity for Australia.
S1: So how so?
S2: So you've got this new technology rapidly evolving and expanding
S2: that's being built right now. And if it's in the US,
S2: the Americans are fine with it. But what we now see,
S2: thanks to Trump's deal with the UAE, is that the
S2: Americans are prepared to allow their very best AI based
S2: AI generating technology and the Nvidia Uh, chip to go
S2: to foreign countries. And the concern is that these countries
S2: aren't necessarily reliable. How is all of this an advantage,
S2: or at least an opportunity for Australia?
S1: Yeah.
S2: Well, there's a couple of things here. First of all,
S2: it it illuminates the urgent and really high priority need
S2: for countries, including the US, to find trusted supply chains
S2: where you can get whatever it is, your solar panels
S2: or whatever, from a country where you know all the
S2: components and elements are being supplied faithfully and without malicious
S2: intent to your national security, and especially when that is
S2: now going to apply to AI. So the opportunity here,
S2: which was explained to me by Tarun Shahabi. Tarun Shahabi
S2: is with Joe Biden's technology security chief in the Biden
S2: White House. He was in Australia. He'd had a look around,
S2: he'd talked to our experts, he'd talked to government officials,
S2: and he said, you guys have a tremendous opportunity because
S2: you are in the most trusted category of of US allies.
S2: You have all the potential and advantages that are needed
S2: to run a trusted AI industry. But you need a
S2: national strategy and you need to get on with it.
S2: But if you can. But if you can do that,
S2: this is a sector where just building the infrastructure in
S2: AI is already estimated to be worth about. Well, nearly
S2: nearly half a trillion. Half 1 trillion USD to countries
S2: that can participate in this. And what he was saying
S2: to me is you are able and you should. And
S2: with this newly elected or re-elected government, you're you're in
S2: a perfect position to develop a strategy and get on
S2: with it.
S1: Okay. Well, this is why I'm so happy to have
S1: you in the studio today, Hartcher. Because I really wanted
S1: to ask you if whether you think the Albanese government
S1: will seize this opportunity because, well, I'd love you to
S1: share with listeners something that you've told me in previous conversations,
S1: which is that Australia has something of a history of
S1: developing or being on the precipice of developing cutting edge
S1: technology in various fields and then squandering it and then
S1: just letting it go. So can you tell us just
S1: really briefly, what's happened in Australia with, you know, our
S1: involvement with development of the personal computer and with solar panels?
S2: Well, with the personal computer in the 1940s, Australia built
S2: in the CSIRO built the world's fourth computer in the
S2: modern sense of the word. And it was the first
S2: ever that could play music apart from anything else.
S1: I'd love to. I would love to know what song
S1: it played.
S2: Yes, I'm not sure.
S1: 1949 it was sort of Begin the Beguine or something. Anyway, yeah, I.
S2: Need to dig into the archives to find out, but yeah.
S2: So that was that was pretty good.
S1: Incredible.
S2: But the the government of the day decided that that
S2: wasn't really a very promising industry. And they shut down
S2: that line of experimentation and development. I mean, Australia could
S2: have been at the very forefront of the computer revolution building, selling, exporting. Instead,
S2: we just put it in a storeroom somewhere and shut
S2: down the sector. You also mentioned solar panels.
S1: Yeah.
S2: Which today are about an $80 billion industry each year.
S2: And the solar panel that is most commonly used and
S2: sold around the world, made in China, was developed at
S2: the University of New South Wales by a professor who's
S2: still around. He's still alive. He had a Chinese PhD
S2: student with whom he collaborated. The Chinese PhD student returned
S2: to China legitimately. Um, had an entitlement to the to
S2: the to the intellectual property, developed it and it's it
S2: made him a billionaire and Australia is is importing panels
S2: from China. So this is a very familiar story in
S2: Australian history. We have brilliant scientists and researchers who make
S2: all sorts of breakthroughs. And it's not just in hard technology.
S2: I mean, Australia made the first feature length movie in
S2: the world, The Story of Ned Kelly. That's right. And
S2: we know about all sorts of innovations and all sorts
S2: of fields. The secret ballot, for example.
S1: Yes. And didn't we also develop the cochlear implant or
S1: am I making that one up?
S2: The cochlear implant was in Australia.
S1: Yeah. Incredible.
S2: And there are there are many more. I mean, it's
S2: pretty dismal if you go through the list and see
S2: all the missed opportunities. And so is this going to
S2: be another one. That's that's that's the question.
S1: Well, this is what I wanted to ask you about
S1: because I know when we last spoke about this unfortunate
S1: phenomenon here, I think you said at the time that
S1: there was a sort of cultural belief system of like,
S1: not good enough. You know, we're not good enough. Oh,
S1: you know, we're not going to step out in that
S1: way because there was sort of perhaps an insecurity that,
S1: you know, oh, no, we're not those people. So could
S1: we become those people? Are we becoming those people? Is
S1: Albanese going to be that person for us? Well, what's
S1: your crystal.
S2: Ball? I won't burden you with my crystal ball, but
S2: I will burden you with some points of evidence that
S2: that indicate potential, at least in Australia. There's a lot
S2: of work going on in computing with quantum computing. Now,
S2: quantum computing is a is the potential supercharger of everything
S2: else that computers do in in unimaginably fast and advanced ways,
S2: applied together with AI. It's. Well, Scott Farquhar, who was
S2: co-founder of Atlassian, I think he's one of Australia's 3
S2: or 4 most wealthy people. He's now the chairman of
S2: the Australia Tech Council. And he says that AI is
S2: like a comet hitting a planet in the age of dinosaurs.
S2: That is all the dinosaurs are going to have to
S2: adapt pretty quickly or they're going to die out, but
S2: that it is potential for new life forms, new industries
S2: and technologies and companies and economic opportunities as well as
S2: a threat. And that's I you put these two together
S2: and it is transformative is an understatement. Obviously now the
S2: Albanese government are breaking with all, you know, form in
S2: Australia of complete lack of self-confidence, has backed a number
S2: of quantum computing ventures. The biggest of them, Sai Quantum
S2: in Brisbane, is a joint australia-us business and also backed
S2: some other researchers as well at the University of New
S2: South Wales. So they have shown the ability to break
S2: through our suffocating history of, you know, self-doubt, nerve wracking,
S2: hand wringing, self-doubt and back Australian innovation and research. So
S2: there is a already underway an attempt to create an
S2: Australian AI strategy that was started in the last term
S2: of the Albanese government. We just need to see that
S2: developed quickly, intelligently. Other bits have to go with it
S2: as well. But it is. It is possible. It is
S2: an option. Canberra is thinking about it. Let's hope they
S2: can energize themselves to get on with it. Of course,
S2: they've just removed the science and industry minister that was
S2: in the job for the last three years, Ed Husic. Yes,
S2: thanks to factional thuggery. But, um, they've got a new one.
S2: Let's see what they can do.
S1: So, I mean, this could this could be a tipping
S1: point moment for us hartcher for us nationally. It could
S1: be a cultural and technological tipping point.
S2: Well, the Tech Council says that Australia could probably generate
S2: just in the next five years out of AI alone,
S2: 200,000 jobs and over $150 billion of economic activity. I mean,
S2: we go around all the time saying, oh, we need
S2: more growth. We need more productivity. We need more innovation. Well,
S2: you know, here's a couple of examples where it's staring
S2: us in the face.
S1: Well, first of all, this is so news to me.
S1: So I'm delighted to speak to you about it. But
S1: also it's been so nice to be distracted from the
S1: Qatari airplane and onto some of the other deals which, granted,
S1: they sound like they're very risky, but it's great to
S1: have my attention pointed to something else. So thank you
S1: so much.
S2: Always a pleasure, Samantha.
S1: Today's episode of The Morning Edition was produced by myself
S1: and Josh towers. Our executive producer is Tammy Mills. Tom
S1: McKendrick is our head of audio. To listen to our
S1: episodes as soon as they drop, follow the Morning Edition
S1: on Apple, Spotify, or wherever you listen to podcasts. Our
S1: newsrooms are powered by subscriptions, so to support independent journalism,
S1: visit The Age or smh.com.au. Subscribe and to stay up
S1: to date, sign up to our Morningedition newsletter to receive
S1: a summary of the day's most important news in your
S1: inbox every morning. Links are in the show. Notes. I'm
S1: Samantha Selinger Morris. Thanks for listening.