Speaker 1: Bloomberg Audio Studios, podcasts, radio news is.
Speaker 2: Your first have a AI expo for national competitiveness. So
Speaker 2: where are we in US competitiveness when it comes to
Speaker 2: out of show intelligence.
Speaker 3: Well, the good news is the US is way ahead
Speaker 3: of China and everybody else, and I think that's going
Speaker 3: to continue for a while. To me, national competitiveness is
Speaker 3: the challenge for the next ten or twenty years because
Speaker 3: the Chinese are really focused on dominating certain industries and
Speaker 3: we need to compete with them and make sure we win.
Speaker 3: In the case of artificial intelligence, we are well ahead
Speaker 3: two or three years. Probably we have China, which in
Speaker 3: my world is in eternity. I think we're in pretty
Speaker 3: good shape. And the crazy valuations, all the money, all
Speaker 3: the new experimentation, this sort of enormous adoption of AI
Speaker 3: that's occurring. We have a lot of implications on society
Speaker 3: and very good for business.
Speaker 2: What about well, ultimately, the of regulating artificial intelligence, is
Speaker 2: there any risk that we stifle innovation and.
Speaker 1: So doing.
Speaker 3: There's always a risk of premature regulation. My simplest example
Speaker 3: there is Europe. I've spent ten years trying to convince
Speaker 3: Europe to actually innovate instead of regulate, and they just
Speaker 3: keep regulating. The current act AI EU act is essentially regulation,
Speaker 3: not investment in the future. So you can see that
Speaker 3: Europe is highly unlikely to be relevant. China, of course,
Speaker 3: is struggling because of chips shortages and so forth. All
Speaker 3: that they're ready to win if they can get the
Speaker 3: harder that they need, and the rest of the world.
Speaker 1: Is not focused enough on this.
Speaker 3: So the good news from myself my position in terms
Speaker 3: of America here we are in DC for national competitiveness.
Speaker 1: We're the likely winner if we don't screw it up.
Speaker 1: What could screw it up?
Speaker 2: Could it be a lack of government focus? How much
Speaker 2: you how would you grade the current administration when it
Speaker 2: comes to a focus on innovation and funding it.
Speaker 3: We've been working with the US government and they've taken
Speaker 3: a largely handoff, hands off, you know, tell us what's
Speaker 3: going on approach, which has worked pretty well. There are
Speaker 3: now voluntary commitments from all the companies. That's a good
Speaker 3: first step. I'm sure there will be areas of real problems,
Speaker 3: you know, cyber dangers, biological dangers and so forth, and
Speaker 3: I would expect in the next ten years you'll see
Speaker 3: real regulations in some of these spaces because of potential harm. Today,
Speaker 3: it's unlikely you're going to have serious harm unless you
Speaker 3: think that the deep fakes are a serious harm, which
Speaker 3: they may be in some cases.
Speaker 1: So we're okay at the moment.
Speaker 2: Would you worry about the next administration if it was
Speaker 2: indeed Underbiden, if it was a Trump administration.
Speaker 3: We are steadfastly bipartisan on this issue because the development
Speaker 3: of AI benefits everybody in the nation. It benefits in
Speaker 3: terms of, you know, curing cancer, helping with climate change,
Speaker 3: new materials, making energy more efficient, distribution use, and so forth,
Speaker 3: and so on. Actional competitiveness should be a bipartisan issue
Speaker 3: in each administration. You have to get to know them,
Speaker 3: you have to get them up to speed. One of
Speaker 3: the strange things about America is that we change over
Speaker 3: the entire government every four or eight years, and then
Speaker 3: you have this whole new bunch of people who have
Speaker 3: to learn both how the government works and also they
Speaker 3: come in with an agenda. I'm not too worried about
Speaker 3: it because everybody benefits from this, whether you're a Republican
Speaker 3: or a Democrat, whether you're a liberal or a conservatives.
Speaker 2: Nuanced and it's also a nuanced relationship that corporates have
Speaker 2: to work with the United States and indeed with China
Speaker 2: at the moment. And I'm really interested you say, perhaps
Speaker 2: China is being pushed behind because of its lack of
Speaker 2: access to chips all we currently navigating that nuance.
Speaker 3: Well, Well, the Trump administration followed by the Biden administration
Speaker 3: did a good job in getting those rules in place.
Speaker 3: It's a good example and not a common example, of
Speaker 3: how a targeted intervention has a positive measured outcome from
Speaker 3: the standpoint of the national security.
Speaker 1: So I think we're good there. It's very important.
Speaker 3: And I led the National Security Commission on Artificial Intelligence
Speaker 3: a few years ago for the Congress. It's very important
Speaker 3: that we get more basic money out of the government
Speaker 3: for basic research.
Speaker 1: We're building intelligence.
Speaker 3: We're building a new form of non human intelligence that
Speaker 3: will change the world forever in a good way. And furthermore,
Speaker 3: it needs to be done with our partner countries. These
Speaker 3: are the five Eyes of the UK, that sort of
Speaker 3: thing some of the European countries. And also it needs
Speaker 3: to be done with American values. So using China as
Speaker 3: the bogeyman, imagine if they were in charge of the Internet,
Speaker 3: and they were in charge of the rules. And you
Speaker 3: imagine how very different your experience as a user on
Speaker 3: the Internet would be today. You can show up, you
Speaker 3: can be anonymous, you can do whatever you want within reason.
Speaker 3: That kind of freedom is central to the spirit of
Speaker 3: the Internet, and it's important to be preserved.
Speaker 2: Talking about a bogeyman and a Chinese related bogaman, TikTok
Speaker 2: became the bogaman that many are now trying to regulate,
Speaker 2: to indeed ban, or to sell. There's been some reporting
Speaker 2: that you've been interested, alongside Manution in potentially purchasing us TikTok.
Speaker 1: Would you still be.
Speaker 3: I'm not currently looking at that. I looked at it
Speaker 3: for a while. My personal view on this is you're
Speaker 3: better off regulating than banning or a judicial action. All
Speaker 3: the big tech companies are now in the hands of
Speaker 3: the DOJ in various legal fights. I would prefer to
Speaker 3: see a regulatory regime that is sort of has the
Speaker 3: right incentives and the right prohibitions for all of these things.
Speaker 3: My own view of TikTok is that TikTok is not
Speaker 3: really social media, it's really television, and that you can
Speaker 3: regulate television by the equivalent of the equal time rule,
Speaker 3: but somehow we're not having that conversation.
Speaker 2: What's interesting is, of course, you say, many big tech
Speaker 2: companies are currently well entangled from a time perspective with
Speaker 2: the DOJ one of them being where we know you
Speaker 2: holm from? Of course the previous CEO of Google. Where
Speaker 2: did you rate from a personal perspective? Where Google is
Speaker 2: in the AI competition race.
Speaker 3: Well, it's interesting that almost all of the technology you're
Speaker 3: seeing today was invented at Google about five to ten
Speaker 3: years ago. And it's one of the sort of great
Speaker 3: things that during that period Google had a roughly in
Speaker 3: my estimate, two thirds of the world's talent in AI
Speaker 3: was working at so Google had a very very strong
Speaker 3: head start. I think Google is a complicated place, is
Speaker 3: a lot going on. Open Ai, in particular came out
Speaker 3: with GPT three three point five and four and did
Speaker 3: a fantastic job. I think that was the competitive nudge
Speaker 3: that has gotten Google back in the game. What I
Speaker 3: like now is you have these two huge companies, Microsoft
Speaker 3: and open Ai together and Google Google Alphabet again operating together,
Speaker 3: and you have them putting billions of dollars hardware and
Speaker 3: enormous software teams to invent this new future. This is
Speaker 3: not to take away from Anthropic, another competitor. Obviously, whatever
Speaker 3: Elon is doing with x dot ai, he's raising a
Speaker 3: huge amount of money, and Meta has recently released a
Speaker 3: four hundred billion parameter modelers and the process of releading
Speaker 3: it that looks really, really good. So that competition is
Speaker 3: the right answer to the regulators and to everyone's question.
Speaker 3: Competition brings out enormous value to consumers. And eventually people
Speaker 3: will see this and they'll say, oh my god, look
Speaker 3: at what this does. And it's free. And of course
Speaker 3: all that money was paid out of the markets. Billions
Speaker 3: of dollars that's going in right now, and they'll monetize
Speaker 3: it somehow.
Speaker 1: Does it have to.
Speaker 2: Be led by the big corporates? How much well optimism
Speaker 2: do you have that the startup culture is what's going
Speaker 2: to breed the innovation as well you as an active
Speaker 2: investor as well as someone who's trying to breed competitiveness
Speaker 2: from a national perspective.
Speaker 3: I've tried to invest in most of the companies because
Speaker 3: I frankly can't figure out which ones are going to
Speaker 3: be successful. One of the most interesting startup successes is Anthropic,
Speaker 3: which is now valued very high, started off as a
Speaker 3: bunch of founders who came out of open Ai, who
Speaker 3: had invented some of the technology but not all of it,
Speaker 3: and they built an unusually good product. Their big partner
Speaker 3: is Amazon, and that again makes sense to me, right
Speaker 3: because they can do it faster than Amazon. They're very,
Speaker 3: very focused. So this new industrial structure of these deep
Speaker 3: partnerships is not a bad thing.
Speaker 1: Look.
Speaker 3: The important thing is the arrival of these large language
Speaker 3: models is a new economic problem in our industry because
Speaker 3: the amount of capital. In my fifty years of doing software,
Speaker 3: we never had capital constraints. We just had software people
Speaker 3: and the software. We always had whatever capital we need.
Speaker 3: Now in order to do anything, you need ten thousand
Speaker 3: or twenty thousand in video H one hundreds B two hundreds,
Speaker 3: which cost forty thousand dollars a pop.
Speaker 1: So you do the math.
Speaker 3: All of a sudden, your idea to get started has
Speaker 3: to have a billion dollar valuation. That's event in a
Speaker 3: software industry, and an unfortunately one which I think tends
Speaker 3: to reward large companies as a bush of the smaller companies.
Speaker 3: The best scenarios where the large companies are investing heavily,
Speaker 3: and the small companies are right up trying to invent
Speaker 3: the new future. And every once in a while one
Speaker 3: of those small companies becomes some huge monolith. Look at Meta,
Speaker 3: look at TikTok. You get the idea and.
Speaker 2: You mentioned, well a global company there with TikTok. What
Speaker 2: about European startups? Could we have a giant out of
Speaker 2: Europe or is regulation just ended up? Would you invest
Speaker 2: in a European startup?
Speaker 1: I have been.
Speaker 3: Investing in France personally because the French ecosystem, in particular
Speaker 3: under President Macron, is much more silk and valley like.
Speaker 3: It's going to be rare to see the successes in
Speaker 3: Europe that you see in America in the UK, and
Speaker 3: the fundamental reason is they can't get the capital and
Speaker 3: the regulatory structure is so prohibitive. It's really sad because
Speaker 3: the European talent pool is amazing. The opportunity to build
Speaker 3: companies in terms of impact is huge, and I think
Speaker 3: frankly the government and the regulation is slowing them down.
Speaker 1: So I'm not writing them off.
Speaker 3: I'm doing some investing, but so far the action will
Speaker 3: be in the US, the UK and Canada, where the
Speaker 3: regulatory structures are much more permissible to economic investment.
Speaker 2: And when we started this conversation, you said, the US
Speaker 2: is leading as long as they don't screw it up.
Speaker 2: One piece of advice to ensure that the US doesn't.
Speaker 3: Let's start by saying, the US capital system is extraordinary.
Speaker 3: You can raise billions of dollars based on an idea
Speaker 3: and a promise of a scale business.
Speaker 1: Let's not screw that up.
Speaker 3: The second thing is, let's not regulate these companies before
Speaker 3: they do something. Give them a chance to figure out
Speaker 3: how to monetize these spaces and build new businesses. Look
Speaker 3: at the tech companies that define the US stock market.
Speaker 1: Look at the value created. For the last couple of years, the.
Speaker 3: Sort of Lucky seven, the Famous four, whatever you want
Speaker 3: to call them, have driven the US stock market as
Speaker 3: the primary drivers of wealth for the whole nation. Right,
Speaker 3: So the game that we're in is one where we
Speaker 3: want to create another one, and another one and another one.
Speaker 3: That opportunity is how economics works in America, and we're
Speaker 3: in a position to provide global platforms at scale using
Speaker 3: the combination of American research, American policy, and all of
Speaker 3: this money that's raisable This is a godsend. Every other
Speaker 3: country in the world would want this. Let's keep it going.