1 00:00:00,080 --> 00:00:10,119 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the 2 00:00:10,119 --> 00:00:13,880 Speaker 1: Bloomberg Balance of Power podcast. Catch us live weekdays at 3 00:00:13,920 --> 00:00:17,119 Speaker 1: noon and five pm Eastern on Apple Coarcley and Android 4 00:00:17,160 --> 00:00:20,560 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 5 00:00:20,600 --> 00:00:24,480 Speaker 1: you get your podcasts, or watch us live on YouTube. 6 00:00:25,360 --> 00:00:27,920 Speaker 2: Just got one more piece of information and this will 7 00:00:27,920 --> 00:00:30,400 Speaker 2: be kind of trickling out through the day. As Tyler mentioned, 8 00:00:30,680 --> 00:00:32,280 Speaker 2: we don't have the full list of those who are 9 00:00:32,320 --> 00:00:34,080 Speaker 2: going to be in the first Ladies Box this evening, 10 00:00:34,080 --> 00:00:36,960 Speaker 2: but Caroline leve At the Press Secretary on Twitter just 11 00:00:37,040 --> 00:00:39,640 Speaker 2: now Erica Kirk will be one of the President's special 12 00:00:39,680 --> 00:00:40,800 Speaker 2: guests at the State of the Union. 13 00:00:41,520 --> 00:00:42,519 Speaker 3: Sheet writes the President. 14 00:00:42,520 --> 00:00:46,320 Speaker 2: We'll call on Congress to firmly reject political violence against 15 00:00:46,360 --> 00:00:47,360 Speaker 2: our fellow citizens. 16 00:00:48,040 --> 00:00:49,640 Speaker 3: With Charlie Kirk's widow. 17 00:00:49,440 --> 00:00:53,320 Speaker 2: In the chamber just posted just now, and as I mentioned, 18 00:00:53,320 --> 00:00:54,280 Speaker 2: we'll be learning more. 19 00:00:54,320 --> 00:00:58,120 Speaker 3: Of course, Jack Hughes in town. Do we know? I 20 00:00:58,200 --> 00:00:59,240 Speaker 3: check this Twitter? I don't. 21 00:01:00,080 --> 00:01:02,840 Speaker 2: I don't see any pictures of marble. He's got to 22 00:01:02,840 --> 00:01:05,319 Speaker 2: come here before he goes to the dentist right for 23 00:01:05,400 --> 00:01:12,200 Speaker 2: the implants. We'll find out. Producer James going to get 24 00:01:12,200 --> 00:01:12,760 Speaker 2: to the bottom of this. 25 00:01:12,840 --> 00:01:15,119 Speaker 3: For us, we also have. 26 00:01:15,120 --> 00:01:17,040 Speaker 2: To keep tabs on what's happening on the other side 27 00:01:17,040 --> 00:01:19,640 Speaker 2: of the Potomac today. This is a big story that 28 00:01:19,720 --> 00:01:22,880 Speaker 2: I want to flag for you as the Bloomberg listener, 29 00:01:22,920 --> 00:01:25,080 Speaker 2: because we have a pretty good sense of what's important, 30 00:01:25,160 --> 00:01:27,040 Speaker 2: right This is why we get together every day and talk. 31 00:01:27,080 --> 00:01:29,840 Speaker 2: It's not just the state of the Union today. On 32 00:01:29,920 --> 00:01:32,160 Speaker 2: the other side of the Potomac inside the Pentagon, the 33 00:01:32,240 --> 00:01:34,640 Speaker 2: Secretary of Defense is set to meet with and could 34 00:01:34,760 --> 00:01:38,440 Speaker 2: right now be meeting with the big boss at Anthropic, 35 00:01:38,560 --> 00:01:41,680 Speaker 2: the AI company. This has a lot to do with 36 00:01:41,760 --> 00:01:44,120 Speaker 2: some of the guard rails that we have talked so 37 00:01:44,240 --> 00:01:48,480 Speaker 2: much about that some belief should be on artificial intelligence. 38 00:01:48,480 --> 00:01:52,000 Speaker 2: And the big boss at Enthropic, Amiday is his name, right, 39 00:01:52,080 --> 00:01:55,320 Speaker 2: Dario Amiday, has spent a lot of time writing and 40 00:01:55,360 --> 00:01:59,800 Speaker 2: talking about some of the moral and ethical conflicts. 41 00:01:59,160 --> 00:02:01,320 Speaker 3: That this new technology presents. 42 00:02:01,840 --> 00:02:04,400 Speaker 2: He does not want his technology and by the way, 43 00:02:04,720 --> 00:02:07,920 Speaker 2: Anthropic is the well, at least until today, was the 44 00:02:07,920 --> 00:02:11,840 Speaker 2: only major AI model that was used for in classified 45 00:02:11,880 --> 00:02:14,480 Speaker 2: systems at the Pentagon. That has just changed now Grock 46 00:02:15,200 --> 00:02:18,160 Speaker 2: has that classification as well, and apparently Google's working on 47 00:02:18,200 --> 00:02:21,320 Speaker 2: it for Gemini, and Thropic does not want its product 48 00:02:21,360 --> 00:02:24,639 Speaker 2: to be used for domestic mass surveillance or for human 49 00:02:24,840 --> 00:02:28,320 Speaker 2: free weapons, right. We don't want to have the terminator 50 00:02:28,840 --> 00:02:34,320 Speaker 2: with our software. The Pentagon wants them to bring the 51 00:02:34,320 --> 00:02:36,040 Speaker 2: guardrails down, though, and this is going to be a 52 00:02:36,080 --> 00:02:40,560 Speaker 2: complicated situation if they have to uninstall effectively Anthropic from 53 00:02:40,600 --> 00:02:42,280 Speaker 2: all of the systems in the Pentagon, some of which 54 00:02:42,320 --> 00:02:45,600 Speaker 2: were used in the capture of Maduro in Venezuela. This 55 00:02:45,680 --> 00:02:48,880 Speaker 2: is where we start our conversation with Mike Sheppard, Bloomberg 56 00:02:48,960 --> 00:02:52,320 Speaker 2: Senior editor for Technology and Strategic Industries and what is 57 00:02:52,400 --> 00:02:55,679 Speaker 2: a true story, a true example of Washington and Wall 58 00:02:55,680 --> 00:02:59,440 Speaker 2: Street meeting together here policy and corporate America. 59 00:02:59,600 --> 00:03:02,120 Speaker 3: Collis, Mike, it's great to see you. 60 00:03:02,280 --> 00:03:02,520 Speaker 4: Thanks. 61 00:03:02,600 --> 00:03:02,680 Speaker 5: Ja. 62 00:03:03,360 --> 00:03:07,200 Speaker 3: Has everybody seen Jensen loong today? We see in Washington. 63 00:03:07,320 --> 00:03:09,960 Speaker 5: Well, that was one question you were asking about Jack Hughes. 64 00:03:10,040 --> 00:03:13,000 Speaker 5: I was immediately thinking, wait, that the invitation for the 65 00:03:13,000 --> 00:03:14,079 Speaker 5: first Lady's Box. 66 00:03:14,160 --> 00:03:15,600 Speaker 4: Yeah, the Nvidia CEO. 67 00:03:15,720 --> 00:03:18,240 Speaker 3: Jensen's going to stand up in the gallery tonight, isn't he? 68 00:03:18,400 --> 00:03:19,240 Speaker 3: Do we know where he is? 69 00:03:19,480 --> 00:03:21,240 Speaker 4: We don't know where he is. We've been asked. 70 00:03:21,240 --> 00:03:24,919 Speaker 3: I'm just feeding speculatorly, you were already of yours. Yeah, 71 00:03:25,200 --> 00:03:26,320 Speaker 3: that'd be a fun surprise. 72 00:03:26,520 --> 00:03:30,119 Speaker 2: I don't know if mister Ammaday is invited, because we're 73 00:03:30,120 --> 00:03:31,840 Speaker 2: told this is not a fun meeting at the Pentagon. 74 00:03:32,320 --> 00:03:36,320 Speaker 5: That is our sense that it will not be a friendly atmosphere. 75 00:03:36,440 --> 00:03:39,600 Speaker 5: The company has said that it is engaged in productive 76 00:03:39,640 --> 00:03:44,040 Speaker 5: and good faith conversations with Defense officials, and yet the 77 00:03:44,200 --> 00:03:47,600 Speaker 5: tone from the Defense Department has been a little bit different. 78 00:03:47,760 --> 00:03:51,120 Speaker 5: What they have characterized it as publicly in a statement 79 00:03:51,560 --> 00:03:56,200 Speaker 5: last week from their spokesman Sean Parnell, is that the 80 00:03:56,280 --> 00:04:01,280 Speaker 5: relationship between not just the contract, the relationship between Anthropic 81 00:04:01,440 --> 00:04:05,480 Speaker 5: and the Defense Department was under review and they made 82 00:04:05,560 --> 00:04:09,080 Speaker 5: clear that they don't want companies to go in there 83 00:04:09,640 --> 00:04:11,120 Speaker 5: not being willing. 84 00:04:10,880 --> 00:04:13,200 Speaker 4: To support all war fighting efforts. 85 00:04:13,560 --> 00:04:17,479 Speaker 5: And it's unclear exactly where this rupture and breakdown took 86 00:04:17,520 --> 00:04:21,920 Speaker 5: place and exactly how these communications and concerns have been 87 00:04:21,960 --> 00:04:25,480 Speaker 5: conveyed from one side to the other. We're getting snippets 88 00:04:25,480 --> 00:04:30,119 Speaker 5: of it publicly in reporting on both the company side 89 00:04:30,480 --> 00:04:33,479 Speaker 5: and on the Defense Department side, but there is clearly 90 00:04:34,360 --> 00:04:36,599 Speaker 5: a bit of friction and a bit of difference over 91 00:04:37,200 --> 00:04:40,200 Speaker 5: where the boundary should be set, Joe, when it comes 92 00:04:40,200 --> 00:04:44,000 Speaker 5: to use of artificial intelligence technology in the military. 93 00:04:44,120 --> 00:04:47,480 Speaker 2: I thought this had the potential to be precedent setting. 94 00:04:47,480 --> 00:04:49,520 Speaker 3: Maybe you will tell me that it still does. But 95 00:04:49,560 --> 00:04:50,680 Speaker 3: when we see Rock. 96 00:04:52,000 --> 00:04:56,200 Speaker 2: Being cleared for use in DD classified systems, is this 97 00:04:56,360 --> 00:04:57,720 Speaker 2: as important as it was a day ago? 98 00:04:58,120 --> 00:05:02,599 Speaker 5: Well, it is in a way because Grock's addition through XAI, 99 00:05:03,279 --> 00:05:07,159 Speaker 5: it adds a layer of competition for work within the 100 00:05:07,200 --> 00:05:11,440 Speaker 5: Pentagon and within the broader national security apparatus of the 101 00:05:11,560 --> 00:05:15,080 Speaker 5: US government, which includes all the intelligence agencies as well. 102 00:05:15,480 --> 00:05:17,279 Speaker 5: And so you have to think, is that you have 103 00:05:17,400 --> 00:05:20,839 Speaker 5: more of these companies breaking into this space gaining the 104 00:05:20,920 --> 00:05:23,160 Speaker 5: qualifications and clearances to do so. 105 00:05:23,480 --> 00:05:25,280 Speaker 4: Of course that's competition. 106 00:05:24,880 --> 00:05:28,080 Speaker 5: For Anthropic, but it's a lot of other business for 107 00:05:28,400 --> 00:05:32,240 Speaker 5: this sector of Washington, you know, often operates in the shadows. 108 00:05:32,279 --> 00:05:34,719 Speaker 5: I mean, a lot of the budgeting even is kind 109 00:05:34,720 --> 00:05:38,600 Speaker 5: of off the books and you know, regarded as you know, 110 00:05:38,720 --> 00:05:44,880 Speaker 5: classified or confidential, and it is nonetheless consequential in terms 111 00:05:44,920 --> 00:05:48,520 Speaker 5: of its execution and what the technologies and the products 112 00:05:48,520 --> 00:05:50,880 Speaker 5: are being used for. And that is one of the 113 00:05:50,960 --> 00:05:54,119 Speaker 5: key questions that Anthropic and others really have been raising 114 00:05:54,160 --> 00:05:54,760 Speaker 5: as well. 115 00:05:54,600 --> 00:05:56,719 Speaker 2: So I know the Pentagon is not new to AI, 116 00:05:56,920 --> 00:06:01,000 Speaker 2: They've been working on this technology for years, but are 117 00:06:01,000 --> 00:06:03,720 Speaker 2: they essentially building the plane in flight When it comes 118 00:06:03,720 --> 00:06:05,800 Speaker 2: to its own policy, do we know where the line 119 00:06:05,880 --> 00:06:08,080 Speaker 2: is for the Pentagon when it comes to, for instance, 120 00:06:08,160 --> 00:06:09,920 Speaker 2: mass surveillance or human free weapons. 121 00:06:10,040 --> 00:06:12,000 Speaker 5: Well, that is a great question, Joe, about where the 122 00:06:12,040 --> 00:06:15,000 Speaker 5: Pentagon stands in terms of its policy. 123 00:06:15,040 --> 00:06:16,880 Speaker 4: And last month, and this may. 124 00:06:16,800 --> 00:06:20,800 Speaker 5: Really be what's sort of accelerated and cause to erupt 125 00:06:21,200 --> 00:06:25,080 Speaker 5: this break between the company and the Defense Department, they 126 00:06:25,240 --> 00:06:28,320 Speaker 5: published an AI strategy and they really want to hit 127 00:06:28,360 --> 00:06:32,839 Speaker 5: the gas on adoption of artificial intelligence and really make 128 00:06:32,960 --> 00:06:36,599 Speaker 5: the US military an AI first force, as they put it. 129 00:06:36,839 --> 00:06:38,800 Speaker 5: One thing they make clear in the document, though, is 130 00:06:38,839 --> 00:06:44,200 Speaker 5: that they do not sanction or condone any illegal use 131 00:06:44,400 --> 00:06:48,560 Speaker 5: of artificial intelligence technology. They everything would have to comply 132 00:06:48,960 --> 00:06:53,120 Speaker 5: by you, by US law, by the laws of war, 133 00:06:53,160 --> 00:06:56,919 Speaker 5: and everything else. And what they don't want, though, is 134 00:06:57,000 --> 00:07:00,760 Speaker 5: they don't want additional restrictions on use of this technology 135 00:07:00,800 --> 00:07:03,800 Speaker 5: from companies that go beyond whatever the letter of the 136 00:07:03,880 --> 00:07:04,760 Speaker 5: law would say. 137 00:07:04,800 --> 00:07:08,680 Speaker 2: The Geneva Convention obviously didn't get to this, and the 138 00:07:08,760 --> 00:07:12,080 Speaker 2: idea of autonomous weaponry brings in a whole new challenge, 139 00:07:12,120 --> 00:07:12,480 Speaker 2: doesn't it. 140 00:07:12,520 --> 00:07:13,080 Speaker 4: Well, it does. 141 00:07:13,160 --> 00:07:15,800 Speaker 5: And back to the question of mass surveillance of US 142 00:07:15,880 --> 00:07:18,800 Speaker 5: citizens domestically, the Pentagon would say, look, we don't even 143 00:07:18,840 --> 00:07:22,160 Speaker 5: do that. It's just that that's just not who we are. 144 00:07:22,800 --> 00:07:27,120 Speaker 5: And and likewise with autonomous weaponry, you know, they haven't 145 00:07:27,200 --> 00:07:30,440 Speaker 5: really gotten to the point where, look, we will do this. 146 00:07:30,560 --> 00:07:34,240 Speaker 5: And militaries around the world are really confronting this question 147 00:07:34,320 --> 00:07:40,360 Speaker 5: about where how far down humans should actually seed control 148 00:07:40,680 --> 00:07:45,280 Speaker 5: to this technology, to AI. And you know, the last 149 00:07:45,280 --> 00:07:48,360 Speaker 5: six hundred meters in any conflict where you know, you 150 00:07:48,480 --> 00:07:52,720 Speaker 5: really have that that moment, you know, whether they must 151 00:07:52,720 --> 00:07:57,600 Speaker 5: decide to take out an individual enemy soldier, combatant or 152 00:07:57,760 --> 00:08:00,680 Speaker 5: groups of combatants, that is all we has been the 153 00:08:00,720 --> 00:08:04,360 Speaker 5: purview of, you know people, and whether that will change 154 00:08:04,400 --> 00:08:07,520 Speaker 5: and how that will change is really still an evolving 155 00:08:07,600 --> 00:08:09,520 Speaker 5: question around the world, not just here in the US. 156 00:08:09,600 --> 00:08:11,640 Speaker 3: Really, the last six hundred meters that's going to be 157 00:08:11,680 --> 00:08:12,560 Speaker 3: the name of your next. 158 00:08:12,440 --> 00:08:14,640 Speaker 4: Bookship I think it may be the name of somebody's book. 159 00:08:15,880 --> 00:08:17,920 Speaker 3: Seth molten Gosh. 160 00:08:17,960 --> 00:08:19,480 Speaker 2: It was two years ago he wrote an op ed 161 00:08:19,520 --> 00:08:23,640 Speaker 2: calling for an AI Geneva convention that it wasn't the 162 00:08:23,800 --> 00:08:24,960 Speaker 2: US he was worried about. 163 00:08:25,040 --> 00:08:26,160 Speaker 3: It was everybody else. 164 00:08:26,640 --> 00:08:28,960 Speaker 2: That nothing would keep Russia, for instance, not that it 165 00:08:29,000 --> 00:08:31,600 Speaker 2: would sign off on a Geneva convention or other nations 166 00:08:31,880 --> 00:08:35,040 Speaker 2: from putting armed robots in the field or autonomous weaponry 167 00:08:35,080 --> 00:08:35,720 Speaker 2: and so forth. 168 00:08:36,200 --> 00:08:38,640 Speaker 3: This is a pentagon that's not waiting. 169 00:08:38,360 --> 00:08:40,560 Speaker 2: Around to find out though, to your point, right, Pete 170 00:08:40,600 --> 00:08:43,160 Speaker 2: Hegseth doesn't want to be on the back foot when 171 00:08:43,200 --> 00:08:47,560 Speaker 2: it comes to this technology. So when you start including Google, Gemini, 172 00:08:48,480 --> 00:08:53,280 Speaker 2: Elon Musk's x AI, where are they on possible governors, 173 00:08:53,360 --> 00:08:56,000 Speaker 2: Do we have any sense of where they draw the line? 174 00:08:56,200 --> 00:08:58,000 Speaker 4: And that's that's another good question. 175 00:08:58,080 --> 00:09:02,360 Speaker 5: And they've also had their own XAI is maybe a 176 00:09:02,440 --> 00:09:05,200 Speaker 5: little bit different in the sense that it is Elon 177 00:09:05,280 --> 00:09:07,959 Speaker 5: Musk's company, and we have seen that, you know, they 178 00:09:07,960 --> 00:09:10,480 Speaker 5: take a different approach when it comes to guardrails overall. 179 00:09:10,480 --> 00:09:12,000 Speaker 4: We've certainly seen that with x. 180 00:09:12,360 --> 00:09:16,360 Speaker 5: And it's unclear how Grock we'll remember Mecha Hitler from 181 00:09:16,440 --> 00:09:21,080 Speaker 5: last year, how it would be controlled by the you know, 182 00:09:21,200 --> 00:09:25,400 Speaker 5: by internally by its own policies. Now, Google, of course 183 00:09:25,440 --> 00:09:28,960 Speaker 5: has done much more government work over the years, not 184 00:09:29,120 --> 00:09:32,840 Speaker 5: in AI necessarily, and they have tried to set certain guarbraels, 185 00:09:32,840 --> 00:09:36,520 Speaker 5: and we saw years ago even protests by Google employees 186 00:09:36,559 --> 00:09:40,800 Speaker 5: about the company's work with the Defense Lament and Intelligence Establishment. 187 00:09:42,440 --> 00:09:44,240 Speaker 5: We have come a long way from there, Joe, And 188 00:09:44,320 --> 00:09:46,080 Speaker 5: this does give rise to a whole new set of 189 00:09:46,160 --> 00:09:49,240 Speaker 5: questions about where the companies and their rank and file, 190 00:09:49,320 --> 00:09:53,520 Speaker 5: and of course their leadership, who have really approximated themselves 191 00:09:53,600 --> 00:09:57,360 Speaker 5: so much to the Trump administration, since you know the 192 00:09:57,400 --> 00:10:00,840 Speaker 5: president's return to power, it'll be interesting see how those 193 00:10:00,880 --> 00:10:03,320 Speaker 5: boundaries get set in this new environment. 194 00:10:03,520 --> 00:10:06,200 Speaker 2: This is some really high minded stuff and I want 195 00:10:06,280 --> 00:10:08,280 Speaker 2: to let everyone know that in our next hour actually 196 00:10:08,480 --> 00:10:10,800 Speaker 2: we're going to explore these ideas more with Gregory Allen 197 00:10:10,880 --> 00:10:13,440 Speaker 2: from CSIS. There's a great mind and in fact worked 198 00:10:13,720 --> 00:10:15,480 Speaker 2: on the Pentagon's AI program. 199 00:10:16,240 --> 00:10:18,400 Speaker 3: Bring it home for me for tonight, shep. 200 00:10:18,440 --> 00:10:21,360 Speaker 2: Does the President get his arms around AI in the 201 00:10:21,360 --> 00:10:23,480 Speaker 2: State of the Union address and does he have new 202 00:10:23,480 --> 00:10:24,360 Speaker 2: proposals to share? 203 00:10:24,440 --> 00:10:27,000 Speaker 5: Well, Joe, he has had his arms around AI since 204 00:10:27,080 --> 00:10:30,280 Speaker 5: taking office. You remember, in his first full day in office, 205 00:10:30,320 --> 00:10:34,679 Speaker 5: he was there unveiling this Stargate initiative with Sam Altman, 206 00:10:35,120 --> 00:10:38,439 Speaker 5: with other big investors, and every step of the way, 207 00:10:38,480 --> 00:10:41,120 Speaker 5: and he has framed his tariff program the cornerstone is 208 00:10:41,120 --> 00:10:43,640 Speaker 5: an economic agenda as a way to bring a lot 209 00:10:43,640 --> 00:10:47,559 Speaker 5: of that tech heavy AI heavy investment here into the US. 210 00:10:47,640 --> 00:10:50,360 Speaker 5: It's not just the data centers, it's also the chip 211 00:10:50,400 --> 00:10:54,320 Speaker 5: making plants that are producing the processors needed the power AI. 212 00:10:54,920 --> 00:10:58,960 Speaker 5: It is truly a centerpiece of his economic program and plan, 213 00:10:59,360 --> 00:11:02,360 Speaker 5: even as it does raise some affordability issues when it 214 00:11:02,400 --> 00:11:05,520 Speaker 5: comes to the demands on power. So he will definitely 215 00:11:05,559 --> 00:11:08,720 Speaker 5: address this in some fashion. Talk about tariff's have spurred 216 00:11:08,760 --> 00:11:12,440 Speaker 5: investment and talk about the tech side of what that 217 00:11:12,840 --> 00:11:13,199 Speaker 5: is brought. 218 00:11:13,320 --> 00:11:15,640 Speaker 2: Not lost on me that tomorrow is in Nvidio earnings 219 00:11:15,679 --> 00:11:18,640 Speaker 2: right after the bell. So if Jensen Wong's in the gallery, 220 00:11:18,679 --> 00:11:20,800 Speaker 2: he's got to get back to the West Coast presumably 221 00:11:20,840 --> 00:11:21,760 Speaker 2: for the conference call. 222 00:11:21,679 --> 00:11:25,160 Speaker 5: Right so well, he could do it almost from anywhere businesses. 223 00:11:25,200 --> 00:11:29,160 Speaker 5: And it is a red letter week on the calendar. 224 00:11:29,320 --> 00:11:31,559 Speaker 2: With Jensen is in the gallery, is that worth five 225 00:11:31,600 --> 00:11:33,040 Speaker 2: points on the stock the next day? 226 00:11:33,080 --> 00:11:34,920 Speaker 3: That's going to be my question. I think you're not 227 00:11:34,920 --> 00:11:35,679 Speaker 3: allowed to answer that. 228 00:11:35,760 --> 00:11:36,800 Speaker 4: I'm not allowed to answer that. 229 00:11:36,840 --> 00:11:39,000 Speaker 3: Sheep is with us on State of the Union Day 230 00:11:39,040 --> 00:11:41,160 Speaker 3: in Washington. I know you've survived a couple of them. 231 00:11:41,200 --> 00:11:42,920 Speaker 2: It's great to have you here to be like Shepherd 232 00:11:43,120 --> 00:11:46,720 Speaker 2: live from Bloomberg in Washington, our senior editor for Technology 233 00:11:46,760 --> 00:11:49,160 Speaker 2: and Strategic Industries. We've got a lot more common, including 234 00:11:49,160 --> 00:11:51,840 Speaker 2: our political panel. They're with us for the long haul. 235 00:11:51,960 --> 00:11:55,360 Speaker 2: Jeanie Shanzino and Rick Davis, Bloomberg Politics contributors, are on 236 00:11:55,400 --> 00:11:57,880 Speaker 2: the way a half hour from now. Kayley Lions will 237 00:11:57,960 --> 00:12:00,600 Speaker 2: jump in the pool as well. Stay with us of Power. 238 00:12:00,600 --> 00:12:02,360 Speaker 2: We'll have much more coming up after this. 239 00:12:07,800 --> 00:12:11,240 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 240 00:12:11,320 --> 00:12:14,319 Speaker 1: us live weekdays at noon and five pm Eastern on 241 00:12:14,480 --> 00:12:18,160 Speaker 1: Almacarchley and Android Auto with the Bloomberg Business app. Listen 242 00:12:18,240 --> 00:12:21,360 Speaker 1: on demand wherever you get your podcasts, or watch us 243 00:12:21,400 --> 00:12:23,120 Speaker 1: live on YouTube. 244 00:12:24,040 --> 00:12:26,559 Speaker 2: It's a big one today, the Super Bowl of politics, 245 00:12:26,600 --> 00:12:30,240 Speaker 2: State of the Union here in Washington, DC. The President 246 00:12:30,280 --> 00:12:33,680 Speaker 2: will speak round nine pm Eastern as he enters the chamber. 247 00:12:33,720 --> 00:12:36,840 Speaker 2: We'll have special coverage under way long before then with 248 00:12:37,000 --> 00:12:41,120 Speaker 2: our signature panel, Bloomberg Politics contributors Genie Shanzano and Rick 249 00:12:41,200 --> 00:12:43,480 Speaker 2: Davis will be with us, and glad to say they're 250 00:12:43,520 --> 00:12:46,160 Speaker 2: with us throughout the day as we gear up for 251 00:12:46,200 --> 00:12:48,320 Speaker 2: the big speech. The president's schedule at least to be 252 00:12:48,360 --> 00:12:51,959 Speaker 2: having lunch with the network news anchors right now at 253 00:12:52,000 --> 00:12:53,840 Speaker 2: the White House, and he's got a couple of things 254 00:12:53,840 --> 00:12:56,439 Speaker 2: to do. They'll be polishing the speech, then they need 255 00:12:56,440 --> 00:12:58,480 Speaker 2: to load it into the prompter, and of course guests 256 00:12:58,520 --> 00:13:00,959 Speaker 2: will be arriving to spend time with the president. The 257 00:13:01,000 --> 00:13:03,640 Speaker 2: first lady, everybody gets to the other end of Pennsylvania 258 00:13:03,679 --> 00:13:05,840 Speaker 2: Avenue in the eight o'clock hour, you'll hear and see 259 00:13:05,840 --> 00:13:08,360 Speaker 2: the motorcade on its way up there as part of 260 00:13:08,400 --> 00:13:11,040 Speaker 2: our special coverage. When the President arrives, the carriage entrance 261 00:13:11,080 --> 00:13:14,040 Speaker 2: will follow him straight into the chamber for what's going 262 00:13:14,120 --> 00:13:18,400 Speaker 2: to be maybe a record. You're ready for This president 263 00:13:18,440 --> 00:13:21,040 Speaker 2: at ninety nine minutes last year set a record, and 264 00:13:21,080 --> 00:13:23,559 Speaker 2: he is already saying it's going to be a long 265 00:13:23,600 --> 00:13:24,240 Speaker 2: one because. 266 00:13:24,000 --> 00:13:25,560 Speaker 3: He's got a lot to talk about tonight. 267 00:13:25,640 --> 00:13:31,720 Speaker 2: So yeah, we could be in uncharted territory as we 268 00:13:31,800 --> 00:13:34,720 Speaker 2: mark four years of war. Here's one that not a 269 00:13:34,720 --> 00:13:36,760 Speaker 2: lot of people are talking about today because there's so 270 00:13:36,840 --> 00:13:39,720 Speaker 2: much else to get to, whether it's starting a new 271 00:13:39,720 --> 00:13:43,400 Speaker 2: war in Iran or dealing with the tariff picture. The 272 00:13:43,440 --> 00:13:48,640 Speaker 2: President's efforts to address affordability. Four years of war in 273 00:13:48,760 --> 00:13:52,000 Speaker 2: Ukraine as of today, the war the President promised to 274 00:13:52,160 --> 00:13:56,600 Speaker 2: end on his first day back in office, with nearly 275 00:13:56,679 --> 00:14:01,600 Speaker 2: two million people killed or injured in the biggest land 276 00:14:01,600 --> 00:14:04,040 Speaker 2: war in Europe since World War Too. The President did 277 00:14:04,040 --> 00:14:05,920 Speaker 2: speak about it a year ago and is addressed to 278 00:14:05,960 --> 00:14:07,240 Speaker 2: a joint session of Congress. 279 00:14:07,240 --> 00:14:11,640 Speaker 6: Listen regarding the agreement on minerals in Security. Ukraine is 280 00:14:11,679 --> 00:14:15,959 Speaker 6: ready to sign it at any time that is convenient 281 00:14:16,000 --> 00:14:20,840 Speaker 6: for you. Simultaneously, we've had serious discussions with Russia that 282 00:14:21,000 --> 00:14:23,920 Speaker 6: have received strong signals that they are ready for peace. 283 00:14:24,200 --> 00:14:25,360 Speaker 3: Wouldn't that be beautiful. 284 00:14:25,480 --> 00:14:28,400 Speaker 6: It's time to stop this madness. It's time to halt 285 00:14:28,440 --> 00:14:28,920 Speaker 6: the killing. 286 00:14:30,520 --> 00:14:32,280 Speaker 3: No, that of course. 287 00:14:33,720 --> 00:14:36,360 Speaker 2: Is not how it played out, and talks have continued 288 00:14:36,400 --> 00:14:40,960 Speaker 2: with no evidence that Vladimir Putin or those negotiating for 289 00:14:41,120 --> 00:14:44,760 Speaker 2: Russia have any interest in acquiescing to any of the 290 00:14:44,800 --> 00:14:47,400 Speaker 2: conditions that would satisfy Ukraine. 291 00:14:47,600 --> 00:14:49,440 Speaker 3: So let's bring them in our panels in for the 292 00:14:49,480 --> 00:14:49,920 Speaker 3: long haul. 293 00:14:50,000 --> 00:14:53,600 Speaker 2: Rick Davis's republican strategist and partner at Stone Court Capital, 294 00:14:54,080 --> 00:14:57,640 Speaker 2: and Genie Schanzeno is our democratic analyst and democracy visiting 295 00:14:57,680 --> 00:15:01,280 Speaker 2: fellow at Harvard Kennedy School's ash Happy State of the 296 00:15:01,360 --> 00:15:04,440 Speaker 2: Union Day to both of you. Rick, I'll start with 297 00:15:04,480 --> 00:15:08,080 Speaker 2: you on Ukraine. The President, according to Bloomberg News, is 298 00:15:08,080 --> 00:15:11,480 Speaker 2: now pushing for a deal before he hosts the two 299 00:15:11,600 --> 00:15:15,200 Speaker 2: hundred and fiftieth birthday celebrations for American Independence. He wants 300 00:15:15,200 --> 00:15:17,560 Speaker 2: a deal by the fourth of July. And I don't 301 00:15:17,560 --> 00:15:21,840 Speaker 2: know why he's bypassing Easter. Remember the big reopening for 302 00:15:21,920 --> 00:15:25,320 Speaker 2: COVID that he wanted to coincide with the Easter holiday. 303 00:15:25,840 --> 00:15:29,320 Speaker 2: Is he capable of ending the war in his second 304 00:15:29,400 --> 00:15:30,520 Speaker 2: year back in office. 305 00:15:31,960 --> 00:15:34,800 Speaker 7: I really doubt that he can do that. Obviously, we 306 00:15:34,840 --> 00:15:37,040 Speaker 7: all want this war to end. Four years is too 307 00:15:37,040 --> 00:15:41,400 Speaker 7: long for this conflict. But I think the primary thing 308 00:15:41,440 --> 00:15:44,400 Speaker 7: that's been missing in that period of time, both with 309 00:15:44,440 --> 00:15:47,800 Speaker 7: the Biden administration and the Trump administration, is a real 310 00:15:47,880 --> 00:15:51,480 Speaker 7: clear eyed understanding that Vladimir Putin has absolutely no interest 311 00:15:51,720 --> 00:15:56,400 Speaker 7: in settling this war. And I think there's lots of 312 00:15:56,440 --> 00:16:00,480 Speaker 7: evidence to indicate that there's only one resolve this and 313 00:16:00,520 --> 00:16:03,440 Speaker 7: that is the defeat of Vladimir Putin and the Russian 314 00:16:03,520 --> 00:16:08,080 Speaker 7: war machine. And that will come when real sanctions are applied, 315 00:16:08,520 --> 00:16:12,960 Speaker 7: that there is a real effort to try and squash 316 00:16:13,080 --> 00:16:16,120 Speaker 7: the Russian economy. You know, there's as much oil being 317 00:16:16,160 --> 00:16:18,920 Speaker 7: pumped and sold out of Russia today than when they 318 00:16:19,000 --> 00:16:20,440 Speaker 7: started the war four years ago. 319 00:16:21,360 --> 00:16:22,920 Speaker 3: What is wrong with that picture? 320 00:16:23,040 --> 00:16:27,320 Speaker 7: Why can't we get our allies and friends to really 321 00:16:27,480 --> 00:16:32,280 Speaker 7: impose strict and painful sanctions. There's a bill in the 322 00:16:32,320 --> 00:16:36,920 Speaker 7: Senate sponsored by Lindsey Graham and others. Eighty five senators 323 00:16:36,960 --> 00:16:42,240 Speaker 7: have signed onto this bill to really slam home painful 324 00:16:42,800 --> 00:16:45,880 Speaker 7: sanctions on the Russian economy to try and end this war. 325 00:16:46,120 --> 00:16:49,400 Speaker 7: This administration owes it to the American people who've invested 326 00:16:49,440 --> 00:16:51,120 Speaker 7: in this and the Russian people are fighting for their 327 00:16:51,120 --> 00:16:53,320 Speaker 7: freedom to pass that bill and sign. 328 00:16:53,160 --> 00:16:53,680 Speaker 3: It in a law. 329 00:16:55,200 --> 00:16:58,520 Speaker 2: Really interesting, genie. We heard from the UK this morning 330 00:16:58,920 --> 00:17:03,320 Speaker 2: targeting the Russian oil fleet with biggest sanctions in years. 331 00:17:04,240 --> 00:17:06,479 Speaker 2: Is the President of the United States ready to do 332 00:17:06,560 --> 00:17:08,800 Speaker 2: something like that, to make an announcement like that tonight. 333 00:17:10,680 --> 00:17:13,080 Speaker 8: I don't see any evidence of that. In fact, we've 334 00:17:13,119 --> 00:17:16,879 Speaker 8: been moving in exactly the opposite direction. And of course 335 00:17:16,960 --> 00:17:20,120 Speaker 8: we are four years in by some counts, two million 336 00:17:20,320 --> 00:17:24,240 Speaker 8: or more casualties, and there doesn't look to be any 337 00:17:24,440 --> 00:17:27,359 Speaker 8: end in sight to this conflict. And the reason is 338 00:17:27,440 --> 00:17:31,639 Speaker 8: pretty simple because neither side and I think we should 339 00:17:31,840 --> 00:17:35,440 Speaker 8: underscore neither side. It's not just Russia, it is Ukraine 340 00:17:35,480 --> 00:17:38,959 Speaker 8: as well are willing to come to the negotiating table 341 00:17:39,240 --> 00:17:41,119 Speaker 8: and to give up their demands. 342 00:17:41,600 --> 00:17:43,840 Speaker 3: And of course, had. 343 00:17:43,640 --> 00:17:47,439 Speaker 8: Ukraine agreed to what Joe Biden quite frankly talked them 344 00:17:47,480 --> 00:17:50,159 Speaker 8: out of with Boris Johnson in twenty twenty two, and 345 00:17:50,240 --> 00:17:52,879 Speaker 8: that one hundred and twenty six page deal that was 346 00:17:52,920 --> 00:17:56,720 Speaker 8: on the table, they would still have those four oblosts. 347 00:17:57,040 --> 00:18:02,240 Speaker 8: They've lost land since then, and the probably really difficult 348 00:18:02,280 --> 00:18:06,119 Speaker 8: reality is they would be in a good position now. 349 00:18:07,240 --> 00:18:09,480 Speaker 8: It's a terrible position, but it's the best they're probably 350 00:18:09,520 --> 00:18:12,040 Speaker 8: going to get to make a deal now to give 351 00:18:12,119 --> 00:18:15,000 Speaker 8: up some of that land and return. But we've heard 352 00:18:15,040 --> 00:18:18,880 Speaker 8: for Zelenski he's unwilling to do that. So I don't 353 00:18:18,960 --> 00:18:21,800 Speaker 8: see the President of the United States stepping out at 354 00:18:21,800 --> 00:18:25,560 Speaker 8: this point. And of course, without the US, Europe is 355 00:18:25,640 --> 00:18:28,879 Speaker 8: not in a position to push back, and so we 356 00:18:28,920 --> 00:18:30,840 Speaker 8: are at a stalemate. This thing is going to be 357 00:18:30,920 --> 00:18:34,359 Speaker 8: won or lost on the battlefield, and at this point 358 00:18:34,400 --> 00:18:37,280 Speaker 8: it looks like Russia has the upper hand and they 359 00:18:37,320 --> 00:18:40,360 Speaker 8: know it. They're talking when you listen to Russian media 360 00:18:40,400 --> 00:18:44,760 Speaker 8: about a new Russia. New Russia includes a whole host 361 00:18:44,800 --> 00:18:49,240 Speaker 8: of land in Ukraine, and that is something that Ukrainians 362 00:18:49,320 --> 00:18:52,480 Speaker 8: are going to have to make some really difficult decisions about. 363 00:18:52,840 --> 00:18:55,120 Speaker 8: If you just look at it from one perspective, they 364 00:18:55,160 --> 00:18:59,920 Speaker 8: don't have the manpower in the military to combat Russia 365 00:19:00,080 --> 00:19:02,320 Speaker 8: for a prolonged war at this point. 366 00:19:03,520 --> 00:19:07,440 Speaker 2: Well, I do wonder what the President will say about this, 367 00:19:07,640 --> 00:19:10,760 Speaker 2: beyond calling parties to the table. Rick, you never know 368 00:19:10,840 --> 00:19:13,280 Speaker 2: exactly which President Trump you're going to get on this issue. 369 00:19:13,280 --> 00:19:15,760 Speaker 2: He most recently said that it was up to Vladimir 370 00:19:15,880 --> 00:19:18,760 Speaker 2: Zelenski to get back to the negotiating table, that it 371 00:19:18,800 --> 00:19:23,040 Speaker 2: was Ukraine that was somehow dragging its feet on a deal. 372 00:19:24,720 --> 00:19:25,760 Speaker 3: But he's also got the. 373 00:19:25,720 --> 00:19:27,800 Speaker 2: Matter of Iran to deal with, and I'm wondering how 374 00:19:27,840 --> 00:19:30,639 Speaker 2: you think he balances these two. Well, calling for peace 375 00:19:30,680 --> 00:19:34,639 Speaker 2: in one war and threatening the possibility of starting another. 376 00:19:36,119 --> 00:19:38,520 Speaker 7: Yeah, you just got to say, for the record, there's 377 00:19:38,560 --> 00:19:42,959 Speaker 7: only one person that has been not negotiating any terms 378 00:19:43,400 --> 00:19:47,840 Speaker 7: other than complete capitulation of the rush of the Ukrainian people, 379 00:19:47,960 --> 00:19:50,960 Speaker 7: and that's Vladimir Putin. So if there's anybody to blame. 380 00:19:51,000 --> 00:19:53,040 Speaker 7: There's only one person to blame. And the fact that 381 00:19:53,080 --> 00:19:56,560 Speaker 7: the administration can't seem to understand that and waste their 382 00:19:56,560 --> 00:20:00,679 Speaker 7: time trying to negotiate with somebody like him is fathomable. 383 00:20:01,440 --> 00:20:01,920 Speaker 3: You're right. 384 00:20:02,080 --> 00:20:04,040 Speaker 7: I mean, we start to look like we're getting spread 385 00:20:04,080 --> 00:20:09,000 Speaker 7: thin with another conflict in the Middle East. Irand very 386 00:20:09,040 --> 00:20:12,600 Speaker 7: bad group of people. They deserve to be toppled. There 387 00:20:12,640 --> 00:20:15,080 Speaker 7: needs to be support in the country to do so. 388 00:20:15,640 --> 00:20:19,760 Speaker 7: Colleges are back now, students are already starting to protest again. 389 00:20:20,359 --> 00:20:22,320 Speaker 7: The President's going to have to make some tough decisions. 390 00:20:22,640 --> 00:20:26,439 Speaker 7: This is not Venezuela. There's real resistance. It could be 391 00:20:26,520 --> 00:20:30,399 Speaker 7: destabilizing to the Middle East. And I think this is 392 00:20:30,400 --> 00:20:34,960 Speaker 7: probably one of the most important, if not difficult, decisions 393 00:20:34,960 --> 00:20:37,320 Speaker 7: that the President's going to make in order to try 394 00:20:37,400 --> 00:20:41,920 Speaker 7: and keep the Middle East from having a nuclear rant. Look, 395 00:20:42,000 --> 00:20:44,440 Speaker 7: Iran wants to be North Korea of the Middle East. 396 00:20:45,240 --> 00:20:48,359 Speaker 7: We see how that's worked out for people who have 397 00:20:48,400 --> 00:20:51,160 Speaker 7: been under the thumb of the North Koreans, the South Koreans, 398 00:20:51,200 --> 00:20:54,199 Speaker 7: the Japanese, other free people in the region who have 399 00:20:54,280 --> 00:20:58,280 Speaker 7: to forego all these nuclear tests and and and it's 400 00:20:58,359 --> 00:21:02,119 Speaker 7: just it's outrageous could you imagine that happening, you know, 401 00:21:02,200 --> 00:21:05,959 Speaker 7: with Iran in the Middle East. So it is an 402 00:21:05,960 --> 00:21:10,120 Speaker 7: important decision by the president, but one that we think 403 00:21:10,160 --> 00:21:14,600 Speaker 7: he's not taking lightly. But nobody has a clue how 404 00:21:14,640 --> 00:21:15,880 Speaker 7: this is going to resolve itself. 405 00:21:17,080 --> 00:21:20,600 Speaker 2: Wow, that's saying a lot, Jeanie. How does Abigail Spanberger 406 00:21:20,720 --> 00:21:22,760 Speaker 2: manage all of this? She's going to talk about her 407 00:21:22,840 --> 00:21:26,840 Speaker 2: national security bona fides, Right, she was a CIA officer 408 00:21:27,040 --> 00:21:29,880 Speaker 2: and of course spent time as a member of Congress 409 00:21:29,880 --> 00:21:31,080 Speaker 2: dealing with these issues. 410 00:21:32,119 --> 00:21:33,040 Speaker 3: She's supposed to be. 411 00:21:33,040 --> 00:21:37,119 Speaker 2: Talking about affordability, Right, this is the moderate Democrat who 412 00:21:37,160 --> 00:21:38,720 Speaker 2: is going to talk about domestic issues. 413 00:21:38,760 --> 00:21:40,240 Speaker 3: Does does she spend time on this? 414 00:21:42,359 --> 00:21:44,359 Speaker 8: I think most of her time is going to be 415 00:21:44,400 --> 00:21:48,639 Speaker 8: spent contrasting her vision, this moderate democratic vision, with that 416 00:21:48,760 --> 00:21:52,159 Speaker 8: of Donald Trunk, beginning with chaos and costs to your 417 00:21:52,200 --> 00:21:58,399 Speaker 8: point about affordability. But given her background in national security, 418 00:21:58,480 --> 00:22:01,719 Speaker 8: in foreign policy, I may hear her talk about this. 419 00:22:01,840 --> 00:22:04,600 Speaker 8: I think if she does, it'll be in the context 420 00:22:04,680 --> 00:22:10,080 Speaker 8: of issues of chaos, issues of promises unkept by this 421 00:22:10,240 --> 00:22:12,880 Speaker 8: president who said he wasn't going to get us involved 422 00:22:12,920 --> 00:22:16,480 Speaker 8: in foreign entanglements. And I think the president owes it 423 00:22:16,560 --> 00:22:20,880 Speaker 8: to us on the issue of Iran to explain his thinking, 424 00:22:21,240 --> 00:22:24,120 Speaker 8: why are we why have we built up as much 425 00:22:24,119 --> 00:22:27,320 Speaker 8: as we have military over there, and what is the 426 00:22:27,440 --> 00:22:30,719 Speaker 8: end goal? What does he hope to achieve? And just 427 00:22:30,760 --> 00:22:33,879 Speaker 8: to get back to Ukraine and Russia for a moment. 428 00:22:34,320 --> 00:22:36,840 Speaker 8: As much as we may like to pretend there's only 429 00:22:36,880 --> 00:22:40,159 Speaker 8: one side here, there are two sides here, and it 430 00:22:40,240 --> 00:22:45,040 Speaker 8: is Russia versus Ukraine, and Vladimir Zelenski is in a 431 00:22:45,160 --> 00:22:48,440 Speaker 8: horrible position, as is Ukraine. They were invaded in twenty 432 00:22:48,480 --> 00:22:51,840 Speaker 8: fourteen again in twenty twenty two. But the reality on 433 00:22:51,920 --> 00:22:56,160 Speaker 8: the battlefield is had they agreed in twenty twenty two 434 00:22:56,200 --> 00:22:59,240 Speaker 8: to that one hundred and twenty six page document, those 435 00:22:59,280 --> 00:23:02,359 Speaker 8: four all blocks that Russia has taken would not have 436 00:23:02,480 --> 00:23:05,200 Speaker 8: been taken and they would be in a better position. 437 00:23:05,560 --> 00:23:09,760 Speaker 8: At this point, they are risking losing their access to 438 00:23:09,840 --> 00:23:13,480 Speaker 8: the sea and becoming a rumped state. There is no 439 00:23:13,600 --> 00:23:16,639 Speaker 8: thinking person who wants them to end up like that, 440 00:23:16,800 --> 00:23:19,640 Speaker 8: and that's where hard decisions have to be made. And 441 00:23:19,720 --> 00:23:22,800 Speaker 8: so you can cast blame on anybody you want, but 442 00:23:22,840 --> 00:23:25,560 Speaker 8: the reality is both sides are going to have to 443 00:23:25,600 --> 00:23:28,320 Speaker 8: concede or this thing is going to end on the battlefield, 444 00:23:28,560 --> 00:23:32,560 Speaker 8: and by all estimates, if the US doesn't back Ukraine 445 00:23:32,560 --> 00:23:35,000 Speaker 8: on this in a much more concerned way than the 446 00:23:35,040 --> 00:23:38,119 Speaker 8: President has shown he wants to, it is going to 447 00:23:38,119 --> 00:23:41,359 Speaker 8: be unlikely that they can prevail on the battlefield because 448 00:23:41,359 --> 00:23:43,360 Speaker 8: Europe's not in a position to do it and they 449 00:23:43,400 --> 00:23:46,800 Speaker 8: have been unwilling to do it. So it is a 450 00:23:46,960 --> 00:23:49,000 Speaker 8: very tough situation for Ukraine. 451 00:23:50,359 --> 00:23:50,560 Speaker 3: Rick. 452 00:23:50,920 --> 00:23:52,879 Speaker 2: The President's going to have to play trioge with the 453 00:23:52,920 --> 00:23:55,359 Speaker 2: topics unless he wants to talk until tomorrow here, and 454 00:23:55,400 --> 00:23:58,080 Speaker 2: knowing that Abigail Spanberger is going to be heading to 455 00:23:58,160 --> 00:24:01,840 Speaker 2: Leesburg the very next morning to kick off a Democratic retreat. 456 00:24:02,119 --> 00:24:04,800 Speaker 2: They're going down a landsdowne resort, Rick, to talk about 457 00:24:05,280 --> 00:24:06,920 Speaker 2: fighting for an affordable America. 458 00:24:06,960 --> 00:24:08,240 Speaker 3: That's the theme of the event. 459 00:24:09,080 --> 00:24:12,560 Speaker 2: How does Donald Trump proportion the speech between foreign policy 460 00:24:12,600 --> 00:24:13,800 Speaker 2: and domestic. 461 00:24:13,400 --> 00:24:14,960 Speaker 3: Agenda in our remaining moment. 462 00:24:14,760 --> 00:24:18,680 Speaker 7: Here, Well, I think, you know, the president has no limitations. 463 00:24:18,880 --> 00:24:21,280 Speaker 7: He may be talking until one o'clock in the morning, 464 00:24:22,320 --> 00:24:24,920 Speaker 7: you know, and so I think he's going to try 465 00:24:24,920 --> 00:24:27,840 Speaker 7: to include everything. I mean, he's a president who ran 466 00:24:27,880 --> 00:24:30,359 Speaker 7: on America first, and yet at the same time has 467 00:24:30,359 --> 00:24:32,920 Speaker 7: spent an enormous amount of time on foreign policy, national 468 00:24:32,960 --> 00:24:37,320 Speaker 7: security issues, trade things that are not considered core America 469 00:24:37,359 --> 00:24:41,480 Speaker 7: first or issues. And I'm sure there are advisors telling 470 00:24:41,560 --> 00:24:43,560 Speaker 7: him we've got to get back to that theme. So 471 00:24:44,000 --> 00:24:45,920 Speaker 7: we'll see how he portions it out. But my guess 472 00:24:45,960 --> 00:24:47,240 Speaker 7: is we get a little bit of everything. 473 00:24:48,359 --> 00:24:50,520 Speaker 2: No, we're going to be running the office pool on 474 00:24:50,640 --> 00:24:53,080 Speaker 2: length here, guys, So think about that. Before our second 475 00:24:53,160 --> 00:24:56,199 Speaker 2: hour was ninety nine minutes last year. Everybody in the 476 00:24:56,200 --> 00:24:58,199 Speaker 2: control room is hoping he's good till at least one 477 00:24:58,200 --> 00:25:00,960 Speaker 2: o'clock in the morning. But we'll figure that out together 478 00:25:01,280 --> 00:25:04,160 Speaker 2: in real time tonight. Stay with us on Balance of Power. 479 00:25:04,200 --> 00:25:05,960 Speaker 2: We'll have much more coming up after this. 480 00:25:10,280 --> 00:25:13,920 Speaker 1: You're listening to the Bloomberg Balance of Power podcast ketchas 481 00:25:14,000 --> 00:25:16,240 Speaker 1: live weekdays at noon and five pm. 482 00:25:16,240 --> 00:25:17,000 Speaker 4: E's durn on. 483 00:25:17,000 --> 00:25:20,240 Speaker 1: Apple Cocklay and Android Auto with the Bloomberg Business App. 484 00:25:20,280 --> 00:25:23,320 Speaker 1: You can also listen live on Amazon Alexa from our 485 00:25:23,359 --> 00:25:27,879 Speaker 1: flagship New York station. Just say Alexa play Bloomberg eleven thirty. 486 00:25:29,119 --> 00:25:32,040 Speaker 9: I'm Kaylee Lines alongside Joe Matthew here in Washington, where 487 00:25:32,040 --> 00:25:35,240 Speaker 9: if it were any other day other than being State 488 00:25:35,280 --> 00:25:37,439 Speaker 9: of the Union day, we probably would have dedicated a 489 00:25:37,440 --> 00:25:39,280 Speaker 9: lot more time already this hour to a meeting that 490 00:25:39,280 --> 00:25:42,400 Speaker 9: took place at the Pentagon today between the Defense Secretary 491 00:25:42,440 --> 00:25:46,720 Speaker 9: Pete Hexath and the CEO of Anthropic. What's in question 492 00:25:46,840 --> 00:25:50,879 Speaker 9: here is Claude and it's a cooperation or lack thereof 493 00:25:50,920 --> 00:25:53,800 Speaker 9: with the DoD when it comes to concerns that at 494 00:25:53,880 --> 00:25:58,040 Speaker 9: least Anthropic has around safeguards around its AI modeling. Apparently 495 00:25:58,080 --> 00:26:00,600 Speaker 9: the Defense Secretary this is, according to reporting from Axios, 496 00:26:01,200 --> 00:26:04,920 Speaker 9: gave Anthropic until Friday evening to give the military unf 497 00:26:05,280 --> 00:26:07,120 Speaker 9: fettered access to its AI model or. 498 00:26:07,080 --> 00:26:08,000 Speaker 3: Face harsh penalties. 499 00:26:08,040 --> 00:26:10,879 Speaker 9: The harsh penalties we know, Joe that could be in 500 00:26:11,000 --> 00:26:14,560 Speaker 9: question here are including declaring Anthropic a supply chain risk, 501 00:26:14,680 --> 00:26:17,440 Speaker 9: or even according to Axios, invoking the Defense Production Act 502 00:26:17,480 --> 00:26:20,040 Speaker 9: to force the company to tailor its models to the 503 00:26:20,040 --> 00:26:20,800 Speaker 9: military's needs. 504 00:26:20,920 --> 00:26:26,000 Speaker 2: The CEO at Anthropic, Dario Amiday, has spoken eloquently, in 505 00:26:26,040 --> 00:26:29,280 Speaker 2: some cases in a very scary fashion about the risks 506 00:26:29,640 --> 00:26:32,200 Speaker 2: and the challenges that AI brings to the table here, 507 00:26:32,560 --> 00:26:34,639 Speaker 2: and this is for him a part of a moral 508 00:26:35,520 --> 00:26:39,320 Speaker 2: question about using the technology for mass surveillance or for 509 00:26:39,520 --> 00:26:43,880 Speaker 2: human free weapons autonomous weaponry. And this is the conversation 510 00:26:43,920 --> 00:26:46,160 Speaker 2: apparently a very tense meeting with hag Seth. 511 00:26:46,200 --> 00:26:47,600 Speaker 3: He's got all Friday now. 512 00:26:47,440 --> 00:26:49,800 Speaker 2: Knowing and this is important, as the New York Times 513 00:26:50,520 --> 00:26:53,840 Speaker 2: scoop today, GROC has been cleared the XAI tool to 514 00:26:53,880 --> 00:26:56,240 Speaker 2: be used in classified systems, so there could be a 515 00:26:56,280 --> 00:26:59,360 Speaker 2: replacement if Anthropic is shown the door here and it's 516 00:26:59,359 --> 00:27:01,720 Speaker 2: where we start our conversation with one of the most 517 00:27:01,760 --> 00:27:04,840 Speaker 2: important minds in the business on this technology. Gregory Allen 518 00:27:04,960 --> 00:27:09,160 Speaker 2: is back senior Advisor at the Wadwani AI Center at CSIS, 519 00:27:09,200 --> 00:27:11,800 Speaker 2: the Center for Strategic and International Studies. I will remind 520 00:27:11,840 --> 00:27:14,480 Speaker 2: you he was director of Strategy and Policy at the 521 00:27:14,480 --> 00:27:17,919 Speaker 2: Department of Defense Joint Artificial Intelligence Center and would have 522 00:27:17,920 --> 00:27:20,080 Speaker 2: been in the room for this meeting if he still 523 00:27:20,080 --> 00:27:21,800 Speaker 2: had that job today. It's great to have you back 524 00:27:21,800 --> 00:27:23,480 Speaker 2: with us on Bloomberg TV and Radio. 525 00:27:23,560 --> 00:27:24,160 Speaker 3: Great to be here. 526 00:27:24,600 --> 00:27:26,880 Speaker 2: I don't want to turn you into someone who needs 527 00:27:26,880 --> 00:27:28,800 Speaker 2: to make moral judgment on the air, but talk to 528 00:27:28,880 --> 00:27:31,600 Speaker 2: us about how important it is to have this access 529 00:27:31,600 --> 00:27:35,680 Speaker 2: and what exactly the Pentagon is doing with this software. 530 00:27:35,720 --> 00:27:38,520 Speaker 2: We're not at the point of having human free weapons. 531 00:27:38,520 --> 00:27:41,639 Speaker 2: What is Pete Hegseth asking Anthropic to do well. 532 00:27:41,680 --> 00:27:44,000 Speaker 10: I think there's a few things worth unpacking here, the 533 00:27:44,000 --> 00:27:48,800 Speaker 10: first of which is that unclassified DoD military computer networks 534 00:27:49,200 --> 00:27:53,240 Speaker 10: Claude is the only active AI model that is really 535 00:27:53,359 --> 00:28:00,000 Speaker 10: already providing meaningful military and intelligence advantage using advanced AI capabilities. Example, 536 00:28:00,240 --> 00:28:02,560 Speaker 10: we've seen in reporting by the Wall Street Journal that 537 00:28:02,680 --> 00:28:06,960 Speaker 10: the raid on Maduro was enabled by offensive cyber capabilities 538 00:28:07,080 --> 00:28:10,000 Speaker 10: that would not have been possible had Claude not been involved, 539 00:28:10,000 --> 00:28:13,119 Speaker 10: had Entthropic not been involved. And since Anthropic won that 540 00:28:13,160 --> 00:28:16,199 Speaker 10: two hundred million dollar contract to work with the Department 541 00:28:16,280 --> 00:28:20,040 Speaker 10: of Defense, they have been leaning forward among all the 542 00:28:20,040 --> 00:28:24,959 Speaker 10: frontier AI companies in most aggressively supporting national security. So 543 00:28:25,240 --> 00:28:28,399 Speaker 10: this dispute comes at an awkward time because, on the 544 00:28:28,440 --> 00:28:31,679 Speaker 10: one hand, the user base within the Department of Defense 545 00:28:32,040 --> 00:28:36,080 Speaker 10: loves Anthropic, loves Claude, and says that their restrictions on usage, 546 00:28:36,119 --> 00:28:38,080 Speaker 10: at least from the conversations that I have been having, 547 00:28:38,200 --> 00:28:40,640 Speaker 10: have never been triggered. There has never been a time 548 00:28:40,760 --> 00:28:43,640 Speaker 10: where Anthropic said no. And it's worth pointing out that 549 00:28:43,680 --> 00:28:46,840 Speaker 10: when Anthropic first negotiated this contract back in July twenty 550 00:28:46,880 --> 00:28:50,520 Speaker 10: twenty five, the DoD was comfortable with a much longer 551 00:28:50,640 --> 00:28:54,160 Speaker 10: set of restrictions than what Anthropic is asking for. Right now, 552 00:28:54,400 --> 00:28:58,520 Speaker 10: they have already walked back so many of their requests. Now, 553 00:28:58,560 --> 00:29:01,040 Speaker 10: all they're saying is, we don't want our tool being 554 00:29:01,160 --> 00:29:04,160 Speaker 10: used for mass domestic surveillance, and we don't want our 555 00:29:04,240 --> 00:29:08,040 Speaker 10: tools being used for autonomous lethal weapons without a human 556 00:29:08,120 --> 00:29:10,800 Speaker 10: on the loop. That's a pretty modest set of requests. 557 00:29:10,960 --> 00:29:14,040 Speaker 10: And the DoD views that as so unreasonable that they're 558 00:29:14,040 --> 00:29:16,720 Speaker 10: now threatening to designate Anthropic a supply chain risk, which 559 00:29:16,760 --> 00:29:18,080 Speaker 10: is a dramatic escalation. 560 00:29:18,200 --> 00:29:21,240 Speaker 9: So do you think it's unreasonable? Would this severely hamper 561 00:29:21,280 --> 00:29:24,800 Speaker 9: the ability of the DoD to keep the country safe? 562 00:29:25,240 --> 00:29:27,920 Speaker 10: So, to be fair to the DoD, what they're saying 563 00:29:28,040 --> 00:29:31,120 Speaker 10: is they want a contract that allows Anthropic or sorry 564 00:29:31,160 --> 00:29:35,200 Speaker 10: requires Anthropic to make their tools available for all lawful uses. 565 00:29:35,440 --> 00:29:38,360 Speaker 10: Now why might they want that? You can understand that 566 00:29:38,440 --> 00:29:41,840 Speaker 10: the DoD, when lives are on the line, when national 567 00:29:41,840 --> 00:29:44,320 Speaker 10: security is on the line, they do not want to 568 00:29:44,320 --> 00:29:47,880 Speaker 10: be having a debate with their company providers about can 569 00:29:47,920 --> 00:29:50,040 Speaker 10: we use it for this? Can we use it for that? 570 00:29:50,520 --> 00:29:55,600 Speaker 10: They need flexibility and I understand that, However, the DoD 571 00:29:56,160 --> 00:29:58,560 Speaker 10: already agreed to a much more of a restrictive set 572 00:29:58,560 --> 00:30:00,960 Speaker 10: of terms back in July twenty twenty. And so, while 573 00:30:00,960 --> 00:30:04,160 Speaker 10: I'm sympathetic to the DoD In saying it needs flexibility 574 00:30:04,240 --> 00:30:07,480 Speaker 10: in these contract terms, what I think is an unreasonable 575 00:30:07,600 --> 00:30:11,560 Speaker 10: escalation is threatening to designate Anthropic as a supplying chain risk. 576 00:30:11,760 --> 00:30:14,000 Speaker 10: That's what we do when we find out companies are 577 00:30:14,040 --> 00:30:18,440 Speaker 10: secretly have Chinese or Russian ownership to take a domestic 578 00:30:18,680 --> 00:30:21,360 Speaker 10: AI champion at a time when the White House is 579 00:30:21,360 --> 00:30:24,120 Speaker 10: saying that the AI race with China is equivalent to 580 00:30:24,120 --> 00:30:26,680 Speaker 10: the space race during the Cold War with the Soviet Union. 581 00:30:26,960 --> 00:30:28,800 Speaker 10: You do not want to take one of the crown 582 00:30:28,880 --> 00:30:32,080 Speaker 10: jewels of your industry and light it on fire over 583 00:30:32,160 --> 00:30:35,080 Speaker 10: something like this. There is a better way to resolve 584 00:30:35,080 --> 00:30:38,240 Speaker 10: this dispute than the absolutist stance the administration has taken. 585 00:30:38,280 --> 00:30:41,280 Speaker 2: Well, this has been an incredible turn from twenty eighteen 586 00:30:41,600 --> 00:30:44,400 Speaker 2: when Google saw itself out here. Now these companies are 587 00:30:44,400 --> 00:30:46,720 Speaker 2: breaking the door down to get in. Or is Anthropic 588 00:30:46,880 --> 00:30:51,680 Speaker 2: just the exception because Gemini's ready XAI or they're all 589 00:30:51,720 --> 00:30:53,960 Speaker 2: ready to replace Aanthropic at a moment's notice. 590 00:30:54,000 --> 00:30:57,320 Speaker 10: It seems yes, at least on unclassified military networks. All 591 00:30:57,400 --> 00:31:01,800 Speaker 10: the leading US model providers are already active on platforms 592 00:31:01,840 --> 00:31:05,240 Speaker 10: like Genai dot Mill, But where Entthropic really stands out 593 00:31:05,320 --> 00:31:09,640 Speaker 10: is these enterprise coding capabilities, and through a partnership with Palenteer, 594 00:31:09,960 --> 00:31:12,560 Speaker 10: is made available to some of the most important use 595 00:31:12,640 --> 00:31:17,040 Speaker 10: cases across the intelligence and war fighting communities. So Anthropic 596 00:31:17,200 --> 00:31:19,960 Speaker 10: is right now delivering the best bang for buck. They're 597 00:31:20,000 --> 00:31:23,240 Speaker 10: involved in the most high profile operations, and so far 598 00:31:23,440 --> 00:31:26,400 Speaker 10: the user community really likes what they're getting and has 599 00:31:26,440 --> 00:31:29,479 Speaker 10: said that since July twenty twenty five they are not 600 00:31:29,840 --> 00:31:33,320 Speaker 10: encountering these restrictions in a realistic scenario. Now, one thing 601 00:31:33,360 --> 00:31:36,200 Speaker 10: I want to say about the use cases that Anthropic 602 00:31:36,320 --> 00:31:41,200 Speaker 10: is currently negotiating around, for example, lethal autonomous weapons. It 603 00:31:41,320 --> 00:31:43,720 Speaker 10: is true that that is a capability that Russia is 604 00:31:43,760 --> 00:31:47,720 Speaker 10: operating right now in Ukraine with systems like the V 605 00:31:47,920 --> 00:31:52,160 Speaker 10: two U unmanaged drone that does operate autonomously, does use 606 00:31:52,200 --> 00:31:55,640 Speaker 10: AI for lethal capabilities. So I can see why the 607 00:31:55,720 --> 00:31:58,200 Speaker 10: DoD would say to a company, we don't want you 608 00:31:58,600 --> 00:32:01,040 Speaker 10: to decide whether or not we can match the capabilities 609 00:32:01,040 --> 00:32:04,480 Speaker 10: of our adversaries. That's a decision that we need to make. 610 00:32:05,000 --> 00:32:08,040 Speaker 10: But as you're having that debate, do you really need 611 00:32:08,080 --> 00:32:11,080 Speaker 10: to threaten to designate the company as a foreign supply 612 00:32:11,240 --> 00:32:13,160 Speaker 10: chain risk, or at least the equivalent of a forward 613 00:32:13,200 --> 00:32:15,240 Speaker 10: supply chain risk. There's a much better way to have 614 00:32:15,280 --> 00:32:15,920 Speaker 10: this conversation. 615 00:32:16,080 --> 00:32:18,840 Speaker 9: Well, it just remind us Gregory, what would happen if, 616 00:32:18,880 --> 00:32:22,560 Speaker 9: indeed Anthropic is given that designation. It goes far beyond 617 00:32:22,600 --> 00:32:24,280 Speaker 9: just eliminating the contract with the DoD. 618 00:32:24,520 --> 00:32:27,560 Speaker 10: Yes, the biggest risk for Anthropic, which has a very 619 00:32:27,760 --> 00:32:32,080 Speaker 10: large and rapidly growing base of commercial customers billions of 620 00:32:32,080 --> 00:32:36,120 Speaker 10: dollars of revenue every year, increasing exponentially every year. The 621 00:32:36,160 --> 00:32:38,520 Speaker 10: big threat is not this two hundred million dollars d 622 00:32:38,720 --> 00:32:41,440 Speaker 10: D contract. The biggest threat of that supply chain risk 623 00:32:41,480 --> 00:32:44,800 Speaker 10: designation is that it could prevent other companies that supply 624 00:32:44,960 --> 00:32:47,920 Speaker 10: to the d D from doing business with Anthropic. In 625 00:32:47,960 --> 00:32:50,880 Speaker 10: a worst case scenario, that could make Anthropic a non 626 00:32:50,960 --> 00:32:54,880 Speaker 10: starter for a whole huge segment of the American economy 627 00:32:55,040 --> 00:32:58,040 Speaker 10: and could be almost fatal to their business. And that's 628 00:32:58,040 --> 00:33:00,280 Speaker 10: why I think you should not even be casually rowing 629 00:33:00,320 --> 00:33:03,120 Speaker 10: around threats like that. If you're trying to get startups 630 00:33:03,160 --> 00:33:05,800 Speaker 10: excited about working with the DoD, do you really want 631 00:33:05,840 --> 00:33:07,520 Speaker 10: to tell them that if you even dip your toe 632 00:33:07,520 --> 00:33:09,400 Speaker 10: in the water, We're going to grab you and pull 633 00:33:09,440 --> 00:33:11,520 Speaker 10: you all the way in. That's not a great message. 634 00:33:11,200 --> 00:33:13,880 Speaker 3: To be sending, isn't that something. Let's zoom out for 635 00:33:13,960 --> 00:33:14,600 Speaker 3: a moment here. 636 00:33:14,640 --> 00:33:17,520 Speaker 2: You mentioned Palins here, and it has been wild just 637 00:33:17,560 --> 00:33:20,480 Speaker 2: the last couple of weeks to watch the reaction in 638 00:33:20,520 --> 00:33:23,720 Speaker 2: the markets from our vantage point here on Bloomberg, but 639 00:33:23,720 --> 00:33:25,840 Speaker 2: even the conversation within the industry when it comes to 640 00:33:25,880 --> 00:33:31,320 Speaker 2: a gentic AI. We have written off entire industries since 641 00:33:31,360 --> 00:33:34,520 Speaker 2: you last joined us. Anyway, software now we're moving on 642 00:33:34,640 --> 00:33:37,720 Speaker 2: to cyber Now we're seeing palents here fall out of 643 00:33:37,720 --> 00:33:41,920 Speaker 2: bed because apparently this incredibly unique service that it once 644 00:33:42,000 --> 00:33:45,120 Speaker 2: provided the Pentagon can be dreamt up by an AI 645 00:33:45,200 --> 00:33:46,000 Speaker 2: bot overnight. 646 00:33:46,080 --> 00:33:47,760 Speaker 3: Are we getting ahead of ourselves? 647 00:33:47,880 --> 00:33:49,680 Speaker 10: Well, you know you're asking me to draw out my 648 00:33:49,720 --> 00:33:53,080 Speaker 10: old NBA experience. It's not my public policy experiences, but 649 00:33:53,120 --> 00:33:55,360 Speaker 10: I'm happy to go there. Let me just say that 650 00:33:55,400 --> 00:33:58,600 Speaker 10: the software industry of the United States and China looks 651 00:33:58,760 --> 00:34:01,760 Speaker 10: very different, and it's because the United States software industry 652 00:34:01,760 --> 00:34:04,720 Speaker 10: has had a shortage of software engineers, which is why 653 00:34:04,800 --> 00:34:07,360 Speaker 10: software as a service as a business model has been 654 00:34:07,400 --> 00:34:11,000 Speaker 10: really attractive in China, they have an abundance of software engineers, 655 00:34:11,200 --> 00:34:13,800 Speaker 10: so there's not really a software as a service business model. 656 00:34:13,960 --> 00:34:16,520 Speaker 10: In fact, most companies just have in house developers who 657 00:34:16,520 --> 00:34:20,319 Speaker 10: develop custom stuff just for them, So SaaS like salesforce 658 00:34:20,680 --> 00:34:23,680 Speaker 10: is practically non existent in China, even though the companies 659 00:34:23,719 --> 00:34:27,160 Speaker 10: still perform those functions. Well, what if agentic Ai makes 660 00:34:27,160 --> 00:34:30,920 Speaker 10: the US software ecosystem look like the Chinese software ecosystem 661 00:34:31,080 --> 00:34:33,719 Speaker 10: with an abundance of software engineers. So do you really 662 00:34:33,760 --> 00:34:36,920 Speaker 10: need to pay Salesforce to use a tiny sliver of 663 00:34:36,960 --> 00:34:39,799 Speaker 10: their service that isn't even customized for you when you 664 00:34:39,800 --> 00:34:42,040 Speaker 10: can just bring in some agentic Ai agents who can 665 00:34:42,080 --> 00:34:45,120 Speaker 10: create the exact, perfect, highly customized set of software that 666 00:34:45,200 --> 00:34:47,640 Speaker 10: everybody in your company wants to use. It could be 667 00:34:47,680 --> 00:34:51,600 Speaker 10: a whole reorientation of the industry because that bottleneck might 668 00:34:51,640 --> 00:34:51,959 Speaker 10: be broken. 669 00:34:52,040 --> 00:34:55,400 Speaker 2: So it sounds like you think that skepticism is warranted 670 00:34:55,440 --> 00:34:56,520 Speaker 2: in this case Ti Yure's dow. 671 00:34:56,520 --> 00:34:59,400 Speaker 10: At a minimum, every company needs to have a justification 672 00:34:59,480 --> 00:35:01,640 Speaker 10: for how that's unami is not wanting. 673 00:35:01,360 --> 00:35:04,280 Speaker 9: Around them well, and so it obviously raises massive questions 674 00:35:04,280 --> 00:35:06,440 Speaker 9: for the labor market. We've had fed governors left and 675 00:35:06,520 --> 00:35:08,480 Speaker 9: right talking about this in recent weeks that they don't 676 00:35:08,480 --> 00:35:10,799 Speaker 9: even know how to properly assess what is going to 677 00:35:10,800 --> 00:35:12,680 Speaker 9: do to productivity, what it's going to do to the 678 00:35:12,760 --> 00:35:15,279 Speaker 9: labor force. Lisa Cook suggested today she doesn't even know 679 00:35:15,360 --> 00:35:17,520 Speaker 9: if monetary policy is a tool that is going to 680 00:35:17,520 --> 00:35:20,360 Speaker 9: be able to offset what AI could do to the economy, 681 00:35:20,400 --> 00:35:23,560 Speaker 9: which raises putting your policy hat back on what policy 682 00:35:23,560 --> 00:35:25,600 Speaker 9: tools can do that? And I would assume it has 683 00:35:25,640 --> 00:35:27,560 Speaker 9: to come in the fiscal realm and from the government. 684 00:35:28,040 --> 00:35:30,600 Speaker 9: So to do so, does President Trump need to get 685 00:35:30,600 --> 00:35:32,600 Speaker 9: on this like tonight in the State of the Union 686 00:35:32,640 --> 00:35:34,479 Speaker 9: to get ahead of this? Is it even possible still 687 00:35:34,480 --> 00:35:35,040 Speaker 9: to be ahead of it? 688 00:35:35,280 --> 00:35:38,080 Speaker 10: I expect President Trump to have a very optimistic message 689 00:35:38,120 --> 00:35:43,440 Speaker 10: about AI because this is a massive opportunity for productivity enhancement. 690 00:35:44,239 --> 00:35:47,600 Speaker 10: This is equivalent to the invention of the tractor. But 691 00:35:47,640 --> 00:35:49,520 Speaker 10: it's worth thinking about. You know, if you've ever read 692 00:35:49,560 --> 00:35:52,160 Speaker 10: the book The Grapes of Wrath, which is about farmers 693 00:35:52,239 --> 00:35:56,719 Speaker 10: in that era experiencing mechanization, it was a really difficult 694 00:35:56,760 --> 00:36:01,400 Speaker 10: time for them because that increase in productivity over the 695 00:36:01,480 --> 00:36:04,720 Speaker 10: long term that led to more economic growth, more jobs, 696 00:36:04,880 --> 00:36:08,200 Speaker 10: but in different sectors. You know, the population of America's 697 00:36:08,239 --> 00:36:10,879 Speaker 10: workforce that was working on farms with something like one 698 00:36:10,920 --> 00:36:14,399 Speaker 10: out of every three laborers in the nineteen twenties. Today 699 00:36:14,440 --> 00:36:16,919 Speaker 10: it's closer to one out of every one hundred, even 700 00:36:16,960 --> 00:36:19,799 Speaker 10: though we produce way more food. Now, here's the thing. 701 00:36:20,239 --> 00:36:22,520 Speaker 10: Humans in that story. We're able to go work in 702 00:36:22,600 --> 00:36:25,920 Speaker 10: manufacturing sectors or in service sectors because they could retrain 703 00:36:26,080 --> 00:36:28,920 Speaker 10: and go have skills that tractors didn't. But you know 704 00:36:28,960 --> 00:36:32,920 Speaker 10: who didn't retrain to find new skills horses, And the 705 00:36:32,960 --> 00:36:36,880 Speaker 10: population of workhorses in the American economy went from tens 706 00:36:36,920 --> 00:36:40,680 Speaker 10: of millions to effectively zero because they could not retrain. 707 00:36:40,760 --> 00:36:45,080 Speaker 10: There was no comparative advantageers. Yeah, this is the key question. 708 00:36:45,719 --> 00:36:49,240 Speaker 10: Is AI a normal technology that is mostly about increasing 709 00:36:49,280 --> 00:36:52,840 Speaker 10: the productivity of humans or do we cross that threshold 710 00:36:52,920 --> 00:36:55,160 Speaker 10: where AI can do everything that a human can do 711 00:36:55,600 --> 00:36:59,440 Speaker 10: better and cheaper? Why would people be employing people? And 712 00:36:59,480 --> 00:37:02,160 Speaker 10: if you listen into the leading lights of AI, including 713 00:37:02,360 --> 00:37:05,640 Speaker 10: dario Amidae, but including his compatriots at every other company, 714 00:37:06,640 --> 00:37:09,560 Speaker 10: I think the skeptic of the group at this stage 715 00:37:09,600 --> 00:37:11,760 Speaker 10: is the CEO of Google Deep Mind, who is predicting 716 00:37:11,760 --> 00:37:14,560 Speaker 10: will cross that threshold in ten years. Dario thinks we'll 717 00:37:14,560 --> 00:37:16,120 Speaker 10: cross it in eighteen to twenty four months. 718 00:37:16,120 --> 00:37:17,840 Speaker 2: Do you go to bed at night thinking that you 719 00:37:17,880 --> 00:37:21,280 Speaker 2: are working on the very technology, then that will spell 720 00:37:21,320 --> 00:37:21,880 Speaker 2: our demise. 721 00:37:22,320 --> 00:37:24,640 Speaker 10: You know. There's a line that Jeff Bezos said in 722 00:37:24,680 --> 00:37:28,920 Speaker 10: the Rise of the Amazon as a book retailer, the 723 00:37:29,040 --> 00:37:33,200 Speaker 10: earlier incarnation of Amazon, and what he said is that 724 00:37:33,320 --> 00:37:36,319 Speaker 10: Amazon is not putting brick and mortar book companies out 725 00:37:36,320 --> 00:37:39,640 Speaker 10: of business. The future is putting brick and mortar book 726 00:37:39,680 --> 00:37:43,000 Speaker 10: companies out of business. Amazon is merely the herald of 727 00:37:43,120 --> 00:37:46,440 Speaker 10: the future. And I think that there is a real 728 00:37:47,000 --> 00:37:50,840 Speaker 10: chance that AI actually meets all the hype and we 729 00:37:50,960 --> 00:37:54,320 Speaker 10: actually are living in that transformative moment. And it's crazy 730 00:37:54,360 --> 00:37:57,160 Speaker 10: because every generation says that they're living through some radical 731 00:37:57,160 --> 00:37:59,960 Speaker 10: transformative moment, but this one might really be different. 732 00:38:00,520 --> 00:38:02,400 Speaker 9: Okay, So for those who are driving in their car 733 00:38:02,480 --> 00:38:04,520 Speaker 9: right now, listening or watching us on TV and thinking, 734 00:38:04,600 --> 00:38:06,160 Speaker 9: oh my god, oh my god, my job is not 735 00:38:06,239 --> 00:38:08,879 Speaker 9: going to be safe, can you provide them any real 736 00:38:08,960 --> 00:38:13,040 Speaker 9: reassurance if you're someone who works on spreadsheets all day 737 00:38:13,239 --> 00:38:16,279 Speaker 9: or looks at legal paperwork, I mean the kind of 738 00:38:16,719 --> 00:38:19,600 Speaker 9: jobs that we're told our official intelligence easily could replace. 739 00:38:20,000 --> 00:38:22,600 Speaker 10: So I would say you can sort of categorize jobs 740 00:38:22,600 --> 00:38:25,600 Speaker 10: based on how difficult or easy it is to automate. 741 00:38:25,800 --> 00:38:29,520 Speaker 10: It's not an accident that Claud code is kind of 742 00:38:29,560 --> 00:38:32,439 Speaker 10: the breakout moment for a gentic AI. And that's true 743 00:38:32,440 --> 00:38:35,480 Speaker 10: because the Internet is full of extremely high quality training 744 00:38:35,600 --> 00:38:38,640 Speaker 10: data like everything on GitHub for here's how to do 745 00:38:38,680 --> 00:38:42,320 Speaker 10: incredibly high quality coding work. But it's also that code 746 00:38:42,360 --> 00:38:46,960 Speaker 10: is amenable to instant verification, which means that Claud can 747 00:38:47,040 --> 00:38:49,680 Speaker 10: generate an answer and then run a test. Does this 748 00:38:49,760 --> 00:38:52,239 Speaker 10: program actually do what I'm trying to get it to do? 749 00:38:52,520 --> 00:38:54,759 Speaker 10: And that means it can generate its own training data 750 00:38:54,760 --> 00:38:57,200 Speaker 10: by running these tens of millions of tests. But if 751 00:38:57,239 --> 00:38:59,799 Speaker 10: you work in a field, whether it's not a lot 752 00:38:59,800 --> 00:39:02,200 Speaker 10: of training data available on the Internet, or it is 753 00:39:02,280 --> 00:39:04,719 Speaker 10: not amenable to this automated testing, it's going to be 754 00:39:04,760 --> 00:39:07,720 Speaker 10: a lot longer before that sort of thing can actually 755 00:39:07,760 --> 00:39:10,399 Speaker 10: be automated. But over a hundred year timeframe, it's very 756 00:39:10,400 --> 00:39:11,480 Speaker 10: hard for me to say why. 757 00:39:11,400 --> 00:39:12,319 Speaker 3: Anyone would be safe. 758 00:39:12,440 --> 00:39:15,120 Speaker 9: All right, Greg Allen, scaring us all from the centers 759 00:39:15,719 --> 00:39:17,680 Speaker 9: your International Studies. Thanks for being here. 760 00:39:17,719 --> 00:39:22,520 Speaker 3: On Balance of Power on Bloomberg TV and radio. Thanks 761 00:39:22,520 --> 00:39:24,680 Speaker 3: for listening to the Balance of Power podcast. 762 00:39:25,320 --> 00:39:28,440 Speaker 2: Make sure to subscribe if you haven't already, at Apple, Spotify, 763 00:39:28,520 --> 00:39:31,120 Speaker 2: or wherever you get your podcasts, and you can find 764 00:39:31,200 --> 00:39:34,440 Speaker 2: us live every weekday from Washington, DC at noontime Eastern 765 00:39:34,719 --> 00:39:36,200 Speaker 2: at Bloomberg dot com.