Speaker 1: Bloomberg Audio Studios, podcasts, radio News.
Speaker 2: Let's get back to Pittsburgh where the inaugural Pennsylvania Energy
Speaker 2: and Innovation summits underway, and we're going to speak with
Speaker 2: AI and Crypto taking center stage of the energy and
Speaker 2: its digital future. Joining us now delighted, say David Sachs,
Speaker 2: White House, AI and Cryptos, our senior policy advisor to
Speaker 2: the President. David, welcome back. It's great to have you
Speaker 2: as always on the program. The focus is good in video,
Speaker 2: thank you, David. The focus is in video and AMD's
Speaker 2: ability to now sell in a limited way chips back
Speaker 2: into the Chinese markets. Just your reaction generally to that, well, we.
Speaker 1: Saw of a policy of not selling our say of
Speaker 1: the art advanced onmiconductors to China, and the Age twenty
Speaker 1: is not that it's a heavily deprecated CHEF and that's
Speaker 1: why the Biden administration allowed the sale of the Age
Speaker 1: twenty to China. And this is a continuation of the
Speaker 1: part in the larger rubric of the trade negotiations that
Speaker 1: Secretary Besson was talking to you about. So this is
Speaker 1: a heavily deprecated chip. I think that, like Secretary Besson said,
Speaker 1: there are some things that China wants from us, or
Speaker 1: are the things we want from China, And this is
Speaker 1: all part of the overall trade negotiation.
Speaker 2: David, you advised the President on AI policy as well
Speaker 2: as cryptopolicy. Do you have any sense of when he
Speaker 2: met with Jensen one last week at the White House,
Speaker 2: what case mister Wang made to the President that it
Speaker 2: was the right thing to get the American technology stacked
Speaker 2: back into China.
Speaker 1: Well, Jenson has been making the case publicly for competing
Speaker 1: in China, and I think there are a lot of
Speaker 1: merits to the argument. If you look at developments over
Speaker 1: the past year. Huawei has advanced very rapidly. They have
Speaker 1: a new technology called cloud Matrix, which networks together at
Speaker 1: three hundred and eighty four of their Wawei assend chips. Now,
Speaker 1: the Huawei chip is not as good as the Nvidia chip.
Speaker 1: The Nvidia chip is three times more powerful. But if
Speaker 1: you network together enough of those chips, you can route
Speaker 1: force your way to a similar kind of result. And
Speaker 1: that is what Huawei has been developing is is cloud
Speaker 1: Matrix three eighty four. And there have been reports, including
Speaker 1: from Bloomberg, that they've started exporting that technology or they've
Speaker 1: been seeking to export it. So Huawei is becoming much
Speaker 1: more competitive, and if you give the whole Chinese market
Speaker 1: to Whuahwei, it's a huge subsidy for their R and
Speaker 1: D right, and it basically forces Chinese companies that might
Speaker 1: be willing to use AGE twenty to use the Huawei
Speaker 1: chip and to basically figure out basically to figure out
Speaker 1: the bugs, work out the kinks of the cloud matrix system,
Speaker 1: and help Wahwei scale that up. So I think there
Speaker 1: is a compelling argument here that you just don't want
Speaker 1: to hand Huawei the entire Chinese market when Nvidia is
Speaker 1: capable of competing for a big slice of it with
Speaker 1: a deprecated, less capable chip. Again, we're not selling our
Speaker 1: latest greatest chips to China, but we can deprive Whahwei
Speaker 1: of basically having this giant market share in China that
Speaker 1: they can then use to scale up and compete with
Speaker 1: us globally. So I think this policy is nuanced and
Speaker 1: I think it makes a lot of sense.
Speaker 2: The reporter you're referring to that Bloomberg had was that
Speaker 2: Huawei was going out to some of the Gulf nations
Speaker 2: and also some of the Southeast Asian nations and offering
Speaker 2: prior generations of their chip, but also the cloud matrix
Speaker 2: that you mentioned, the concern being that in dealing with
Speaker 2: third countries, you know, there be some Chinese access to
Speaker 2: other nations technology. How involved have you been, David in
Speaker 2: these kinds of talks and in framing that the presidents
Speaker 2: thinking that actually just having direct access to lower performance
Speaker 2: compute is okay with China right now?
Speaker 1: Well, look, I don't want to I'm not going to
Speaker 1: discuss what I talked to the President about, but I
Speaker 1: mean I can tell you what I think, which is
Speaker 1: that the Bloomberg story discussed how Huawei was basically trying
Speaker 1: to make available the Huawei are certain CHEF, which is
Speaker 1: their current chip, which is basically put together an a
Speaker 1: rack system with cloud matrix to create a viable competitor
Speaker 1: to in Nvidia, and I think it is a viable competitor.
Speaker 1: I think in Nvidia and AMD and other American companies
Speaker 1: have a better product. But if we don't compete across
Speaker 1: the world, then we will hand the market to China.
Speaker 1: And one of the reasons that the President went to
Speaker 1: the Gold States on that trip is to encourage business
Speaker 1: relations between the US and the Gold State, he signed
Speaker 1: massive investment deals, and one of the deals that we
Speaker 1: signed was this new AI Acceleration Partnership where we want
Speaker 1: to create a pathway for the Gold States like UAE
Speaker 1: to buy American technology, to buy American chips, and to
Speaker 1: create data centers on the American tech stack. And I
Speaker 1: can tell you that I don't quite understand why this
Speaker 1: has proven to be so controversial in Washington, But where
Speaker 1: these nations, like the Gold States, they have two choices.
Speaker 1: They can go with an American technology or they can
Speaker 1: go with a Chinese technology. And if you don't let
Speaker 1: them buy the American technolog you're pushing them into the
Speaker 1: arms of China. And a lot of people said, well,
Speaker 1: China won't be ready to sell for years, But now
Speaker 1: we see that there are reports that Huawei is out
Speaker 1: there trying to sell an export the Huawei Assen chip.
Speaker 1: So I think it's very important that we enable our
Speaker 1: American companies to compete in the global market, that we
Speaker 1: don't tie their hands, that we don't hobble them, because again,
Speaker 1: this is zero sum game. That market share will either
Speaker 1: belong to our companies like Nvidia, or it's going to
Speaker 1: belong to Chinese companies like Huawei. There's a very simple
Speaker 1: test for this, just look at market share. If five
Speaker 1: years from now we look across the world and we
Speaker 1: see that in Nvidia or other American companies have eighty
Speaker 1: percent market share, it means that we won the AI race.
Speaker 1: But if we look across the world in five years
Speaker 1: and see that Huawei has eighty percent market share, then
Speaker 1: it means that we lost the AI race. So I
Speaker 1: think it's very important that we do everything we can
Speaker 1: to encourage American exports to be sure. We can name
Speaker 1: our security standards. But this is a very easy trust
Speaker 1: but verify situation. You know, the chips that we're talking
Speaker 1: about are really mainframe computers. They're eight feet tall, they're
Speaker 1: thirty six hundred pounds. It's very easy to send inspectors
Speaker 1: into data centers and count the server racks to make
Speaker 1: sure that they're where they're supposed to be, so the
Speaker 1: security concerns can be addressed. I understand that there are
Speaker 1: some security concerns, but I think they're very easily handled,
Speaker 1: and what we need to be doing is making sure
Speaker 1: that we win the AI race globally by making American
Speaker 1: technology the global standard and not Letting not creating a
Speaker 1: Huawei Bolton Road.
Speaker 2: Live on Bloomberg Television and radio worldwide, we're in conversation
Speaker 2: with David Sack, Senior policy advisor for AI and Crypto.
Speaker 2: The AI and cryptos are David. I wrote my news
Speaker 2: that earlier this week about the analogy that Jensen Wong
Speaker 2: has been using that the American technology stack should be
Speaker 2: akin to the US dollar as the world's reserve currency.
Speaker 2: That's how he would like the administration to approach it.
Speaker 2: Do you share that view and see some truth in
Speaker 2: that analogy.
Speaker 1: Well, here's the way I see it, and this is
Speaker 1: really I think a Silicon Valley view, because I'm ultimately
Speaker 1: I've been a founder and investor in Silicon Valley for
Speaker 1: twenty five years. And what we see is that the
Speaker 1: winning technology companies are always the ones that create the
Speaker 1: biggest ecosystem. They have the most developers on their platform,
Speaker 1: they have the most apps in their app store, and
Speaker 1: so they work very, very hard to create a partner ecosystem.
Speaker 1: And I think that the United States needs to do
Speaker 1: something similar with the American technology stack. We want the
Speaker 1: most other countries using our technology, because again, it's a
Speaker 1: zero sum game and It's not just the chips, it's
Speaker 1: the operating system that runs on those chips, it's the
Speaker 1: AI models that then are run in these data centers.
Speaker 1: We want all of that to be American made and
Speaker 1: American powered, and look to be sure. There are security
Speaker 1: concerns and we can address them. I don't think that's
Speaker 1: that hard. But if we hobble our American companies and
Speaker 1: don't let them participate in the global market again, we
Speaker 1: are creating. We are playing into China's arms and playing
Speaker 1: into their digital soul. Wrote So I think, to me,
Speaker 1: this is a pretty easy question. I think we do
Speaker 1: want American technology to be the global standard. It is
Speaker 1: a little bit like the dollar. There is a network
Speaker 1: effect there. The reason why everyone loves the dollars because
Speaker 1: they know that everybody else will accept it as well.
Speaker 1: So we do want to have the strongest dollar. We
Speaker 1: want to be the reserve currency, and we do want
Speaker 1: our technology to be the global standard.
Speaker 2: David Bloomberg reported this morning that on July twenty third,
Speaker 2: the President's going to speak in an event titled Winning
Speaker 2: the AI Race, which you and the rest of the
Speaker 2: All In Pod team will be posting. Essentially, I guess
Speaker 2: that's going to be a moment where we'll have a
Speaker 2: more a fuller sense of what the President and this
Speaker 2: administration's big picture AI policy is going to be, what
Speaker 2: the big goals are going to be.
Speaker 1: That's right. That's the President will be giving a keynote
Speaker 1: address at the One Day AI Conference in Washington, DC
Speaker 1: on July twenty third. It's co hosted by all In
Speaker 1: and Hill and Valley Form, which is also a DC
Speaker 1: and Silicon Valley policy group, and I think we'll be
Speaker 1: giving us first major address on the topic of artificial
Speaker 1: intelligence building on. There are mark studies giving here in
Speaker 1: Pennsylvania today which are also AI related and related to
Speaker 1: energy investment, the kinds of investments we have to make
Speaker 1: to power the next generation of AI.
Speaker 2: David, you've been speaking there in Pittsburgh this morning. What's
Speaker 2: the main focus on the energy side of this AI story?
Speaker 2: Energy security is a national security priority, but just simply
Speaker 2: whether or enough whether we will have enough energy resources
Speaker 2: to power the goals of META and the other hyperscalers.
Speaker 1: Well, Pennsylvania is a huge energy producing state. I think
Speaker 1: it's our second biggest energy producing state. They have abundant
Speaker 1: natural gas, which I think in the near term is
Speaker 1: going to be the power source for these data centers.
Speaker 1: I think, you know, in about five years we could
Speaker 1: start seeing nuclear scale up, and the administration believes in
Speaker 1: that too. We want on all of the above approach.
Speaker 1: But Pennsylvania is very big in natural gas, and there
Speaker 1: are major investments being announced here for more for more
Speaker 1: basically fracking, for more grid infrastructure, for more power generation.
Speaker 1: All those things are needed to power data centers. AI
Speaker 1: runs on GPUs that are incredibly power intensive, and these
Speaker 1: data centers in the future are going to need more power.
Speaker 1: And the one area I think where America is a
Speaker 1: little bit behind. I mean, I think we're winning the
Speaker 1: AI race pretty much at every level of the stack,
Speaker 1: except that the size of our power grid has not
Speaker 1: increased very much over the past decade. If you go
Speaker 1: over to China, they've roughly double the size of their
Speaker 1: electric grid over the past decade, where ours is only
Speaker 1: gone up by a couple of percent a year. So
Speaker 1: this is an area where we need to make major
Speaker 1: new investments, and the President is coming to Pennsylvania today
Speaker 1: to announce many of those investments. And I think this
Speaker 1: has been a major priority the administration, and I think
Speaker 1: You're going to see a lot more
Speaker 2: Of this White House, AI and cryptos are David Sacks,
Speaker 2: thank you very much, coming back on Bloomberg Tech