Speaker 1: For all the focus on deficits and tariffs, you might
Speaker 1: think economic ties between the US and China are just
Speaker 1: about how much stuff is put on a ship, how
Speaker 1: much it costs, where it's made, and where it's going.
Speaker 1: You would be mistaken. The future belongs to data, not merchandise,
Speaker 1: and the world economy is a duopoly. America and China
Speaker 1: own it. Welcome to Benjamin, a show about the global econome.
Speaker 1: I'm Daniel Moss, columnist at Bloomberg Opinion in New York.
Speaker 1: A few people are as familiar with both the viewers
Speaker 1: and China as Kai Fu Lei. Born in Taiwan, Doctor
Speaker 1: Lee has spent his career straddling Silicon Valley the tech
Speaker 1: precincts of Beijing. He used to run Google China and
Speaker 1: now leads sign Ovation Ventures, a firm that focuses on
Speaker 1: developing the next big thing. Along the way, he had
Speaker 1: a personal crisis that further sharpened his insights. Dr Lee
Speaker 1: is the author of Ai Superpowers, China, Silicon Valley, and
Speaker 1: the New World Order. It's probably the business book of
Speaker 1: the moment. Dr leeh thanks for joining us, and thanks
Speaker 1: for not putting the word disruption in the title. Thank you.
Speaker 1: It's great to talk to you. I've heard you describe
Speaker 1: China as the new Saudi Arabia and data as the
Speaker 1: new oil. What did you mean by that and how
Speaker 1: does that capture the essence of this moment? Sure? The
Speaker 1: way are the official intelligence or AI works today is
Speaker 1: that within this single application, when an AI algorithm is
Speaker 1: trained down a huge amount of data with corresponding labels,
Speaker 1: it can then make decisions in that domain at a
Speaker 1: superhuman accuracy. So the more the data, the better. So
Speaker 1: the system is not programmed by humans to do make decisions,
Speaker 1: but it learns from data. And the amount of data
Speaker 1: that's needed is is huge. So today China has the
Speaker 1: most data in the world and that gives a certain
Speaker 1: advantage to China. Now, technology, business, and economic literature has
Speaker 1: been gushing about artificial intelligence for a while. What's changed.
Speaker 1: I think the biggest change was that ten years ago
Speaker 1: a new technology called deep learning was invented and it
Speaker 1: was applied in many many domains, and starting about six
Speaker 1: years ago, we began to see its efficacy in face
Speaker 1: wreck cognition, later speech recognition, later the game of Go,
Speaker 1: and almost all subsequent technologies were built on this deep
Speaker 1: learning or associated technologies. So that was the single big
Speaker 1: breakthrough that became clear to the researchers about six years ago,
Speaker 1: but to the rest of the world about two and
Speaker 1: a half years ago when Alpha go emerged, and this
Speaker 1: technology coincided with the rapidly increasing amount of data because
Speaker 1: deep learning is a very deep network with potentially billions
Speaker 1: of parameters to train, so it was hungry for data.
Speaker 1: So the accessibility and growth of Internet data alongside with
Speaker 1: that the development of deep learning together created never before
Speaker 1: seeing accuracy in all kinds of tasks that deep learning
Speaker 1: plus large data tackles. Can you put this in the
Speaker 1: context of economic history for the past couple of centuries?
Speaker 1: Where does this rank in the period that began with say,
Speaker 1: the Industrial Revolution in the United Kingdom? Okay, I think
Speaker 1: AI should definitely rank among the Industrial Revolution, in particular
Speaker 1: with the steam engine, electricity, and perhaps the internet computer revolution.
Speaker 1: These probably are the top three or four in my
Speaker 1: personal opinion. It will end up proven to be number one,
Speaker 1: but of course that remains to be seen. Does the
Speaker 1: industrial and economic map of the world now resemble something
Speaker 1: from the nine century but instead of European powers gobbling
Speaker 1: up territory in Africa and Asia, China in the United
Speaker 1: States carving up the technology world. What does that map
Speaker 1: look like today? I think if we take a snapshot
Speaker 1: right now, US is still has the upper hand with
Speaker 1: American technologies penetrating developed countries and some developing countries, and
Speaker 1: China is largely still within China, with a little bit
Speaker 1: of penetration into other countries. But we're seeing a rapidly
Speaker 1: increasing pace that Chinese technology companies, and that's primarily mobile
Speaker 1: apps and AI companies going from China to Southeast Asia,
Speaker 1: Middle East, and Africa. They're just at the beginning, so
Speaker 1: it's too early to tell the final results. But given
Speaker 1: that the American giants have largely ignored those regions. Um
Speaker 1: as you add India also, since that's generally separate from
Speaker 1: the Southeast Asia, US is generally not paid too much
Speaker 1: attention to those four regions. I think it gives China
Speaker 1: an opportunity to go into these four regions. And in addition,
Speaker 1: the Chinese demographics may match those regions better than the US,
Speaker 1: so the products may be more attractive. And coincidentally, it
Speaker 1: also matches the Belt Road initiative from China. So I
Speaker 1: think the developed countries will end up continuing to be
Speaker 1: a stronghold of American dominance in technology. But I think
Speaker 1: most of the rest of our world would potentially have
Speaker 1: a high degree of Chinese penetration, probably not as strong
Speaker 1: as US in the developed countries, but let's say a
Speaker 1: more than fifty percent penetration or dependency on Chinese technologies.
Speaker 1: Over let's say the next five to ten years. So
Speaker 1: broadly speaking, the US would have Western Europe, Canada, and Japan,
Speaker 1: and China would have the rest, probably not quite I
Speaker 1: think um. I think the US would have nearly total
Speaker 1: penetration of most of, if not all, of Europe, Canada, Australia,
Speaker 1: and Japan, and possibly some of South America and a
Speaker 1: little bit at the rest of the world. And China
Speaker 1: would have all of China and more than fifty of India,
Speaker 1: Southeast Asia, Middle East, and Africa. The trade disputes between
Speaker 1: the United States and China, which dominate much of the
Speaker 1: public discourse in America these days, that principally about merchandise trade,
Speaker 1: about deficits, about the cost of production. That seems to
Speaker 1: be a completely different conversation from that of the world
Speaker 1: that you're inhabiting. Well to be fair. There's also intellectual property,
Speaker 1: which I think is crosses both. I do agree that
Speaker 1: the trade disputes are include the intellectual property don't affect
Speaker 1: um our area, which is AI mobile software. But some
Speaker 1: of those issues certainly do affect semiconductor PC UM mobile
Speaker 1: phones and so on, which are very much related to
Speaker 1: the area as we invest in now. You were born
Speaker 1: in Taiwan, you came to the United States as a
Speaker 1: small boy to Tennessee. You've worked in the Valley, You've
Speaker 1: worked for an American company in China, you have your
Speaker 1: own venture capital firm. As a student of the United
Speaker 1: States and the economic and technological currents, what from your perspective,
Speaker 1: is going on in this country right now? How would
Speaker 1: you define this moment? Do you mean the technology development
Speaker 1: or the trade disputes? If you've wrapped up the overall
Speaker 1: vibe in America right now compared with previous visits, from
Speaker 1: the time you were growing up, from the time you
Speaker 1: were a student at university, here, what's changed in this
Speaker 1: country and why? I think in Silicon Valley not much
Speaker 1: has changed. There has been and still is a very
Speaker 1: strong self confidence that it is the center of the world.
Speaker 1: The rest of America is beginning to realize that there
Speaker 1: is an alternate technological force emerging that's called China. And
Speaker 1: I think the Silicon Valley centric view is potentially dangerous
Speaker 1: because it is a great view. It is a great
Speaker 1: way to develop products, but China has proven that it
Speaker 1: is not the only way. So it would be wise
Speaker 1: to consider at least the two alternate ways that great
Speaker 1: innovative products can be developed. And in terms of overall sentiment,
Speaker 1: I think I sense more divisiveness in America. I think
Speaker 1: before there was a much greater unity, and I think
Speaker 1: there is um more disagreements today, and I think there
Speaker 1: are it feels like they're more uncertainty, but the economy
Speaker 1: is good and the people feel confident about the American technologies. Yeah,
Speaker 1: that's basically what I see. How profoundly did your brush
Speaker 1: with cancer effect your perspective? Very very profoundly. In my
Speaker 1: first fifty plus years of my life, I've I've really
Speaker 1: was a workaholic, and I felt work was the center
Speaker 1: of my life. And family was UM a set of
Speaker 1: people I depended on, but I gave them time as
Speaker 1: I could afford from my work. UM gave enough times
Speaker 1: so that they tolerate my lack of attention. But as
Speaker 1: I found out that I had cancer, I realized that
Speaker 1: all the accomplishment really meant nothing, and that, like most
Speaker 1: people facing the possibility of death, I realized that what
Speaker 1: was important in life was first and foremost to love
Speaker 1: and give love back to the people who love me,
Speaker 1: and secondly, to follow the things and do things that
Speaker 1: I am passionate about. And that's very consistent across thousands
Speaker 1: of people facing death, and I think there's a lot
Speaker 1: of wisdom in people facing death. So fortunately, I'm now
Speaker 1: in remission and when I now come back to work,
Speaker 1: I no longer put work as my only priority, and
Speaker 1: when my kids come home, I actually just don't work,
Speaker 1: and it's a reversal of what I used to do.
Speaker 1: I still spend a lot of hours working less than before,
Speaker 1: but it's a matter of priorities. It's a matter of
Speaker 1: finally realizing what was important. And it also made me
Speaker 1: realize that workaholism is something that haunts both the Americans
Speaker 1: and the Chinese, and that there really is more to
Speaker 1: life than work. So in some sense, uh, as we
Speaker 1: enter the era of AI, I think AI is here
Speaker 1: to relieve us from a lot of redundant or repetitive
Speaker 1: or routine work that we're doing, giving us a lot
Speaker 1: more time back to us so that we can give
Speaker 1: time to the people who love us, We can do
Speaker 1: the things that we are passionate about, and and we
Speaker 1: can have time to think about the real meaning of life,
Speaker 1: which is definitely not work. In keeping with that, what
Speaker 1: does this new technological world order main for the future
Speaker 1: of work? Because AI is capable of doing single, distinct
Speaker 1: tasks much better than people, that means we don't have
Speaker 1: to be threatened that AI will become robot overlords ruling
Speaker 1: over us because there are tools that we control. On
Speaker 1: the other hand, if they can do single tasks better
Speaker 1: than us, there are many people who do jobs that
Speaker 1: are composed of a number of single tasks. That means
Speaker 1: those jobs will be displaced by AI, either one on
Speaker 1: one or through industry disruption. So in terms of the
Speaker 1: future of work, I'm quite concerned that a certain percentage
Speaker 1: of jobs that are not requiring the most creativity and
Speaker 1: not requiring the greatest human touch and interaction, those kinds
Speaker 1: of routine jobs will be replaced by AI, and that
Speaker 1: the time has come for us to plan to real
Speaker 1: to reskill the people in those jobs, and while we
Speaker 1: still have time to create jobs that can be both
Speaker 1: satisfying and reasonably play paying, so that people can move
Speaker 1: on to the next steps in their lives rather than
Speaker 1: just to see AI take over one type of job
Speaker 1: after another, Doctor Lee. You're probably familiar with some of
Speaker 1: the criticism that's made of Northern California and in some
Speaker 1: ways the state in general, that the scene is to uniform,
Speaker 1: there's too much group think, it's a one party state,
Speaker 1: and it's lost its age. What's your perspective on that
Speaker 1: about California, about Silicon Valley California in general, versus what
Speaker 1: you're seeing when you hang out in the tech precincts
Speaker 1: of Beijing. Well, I am very conflicted because at the
Speaker 1: same time, I have tremendous respect of the vision that's
Speaker 1: come out of Silicon Valley, that has led the world
Speaker 1: for the last thirty years, and that still has many
Speaker 1: of the world's most amazing companies and startups. But I
Speaker 1: I'm also at the same time concerned that the success
Speaker 1: has created some degree of self entitlement and maybe even
Speaker 1: a little bit of hubris, the feeling that the world
Speaker 1: revolves around Silicon Valley. They belief that um only the
Speaker 1: companies there matter, the belief that only Silicon Valley innovates,
Speaker 1: and only the method of Silicon Valley that matters when
Speaker 1: it comes to innovation. And I think that is myopic.
Speaker 1: And if if we, if Americans all really believe that,
Speaker 1: then it would be missing all the exciting things happening
Speaker 1: in China. Chinese model of innovation is different. It's heavier,
Speaker 1: it's building impregnable business models that actually are more built
Speaker 1: to last, but maybe less visionary and technically exciting. I
Speaker 1: think as citizens of this world, we should all be
Speaker 1: hum ball and study different types of innovation and be
Speaker 1: open to different models. And if Silicon Valley continues to
Speaker 1: only look within and not accept external innovation, then it
Speaker 1: will be missing half of the teaching materials for the
Speaker 1: young people in Silicon Valley. That I can assure you
Speaker 1: that the young people in China are studying humbly both
Speaker 1: the successes in the US, the Googles and facebooks and
Speaker 1: the successes from China the Ali Baba's and made Twins
Speaker 1: and ten cents, and that gives a more robust set
Speaker 1: of instructions, if you will, for the Chinese entrepreneurs that
Speaker 1: there's no reason American entrepreneurs should um keep the blinders
Speaker 1: on and throw away half of the instructions that could
Speaker 1: be so helpful to their growth as entrepreneurs. What role
Speaker 1: should the state play in this? I was fortunate enough
Speaker 1: to be at an event last month with Audrey Tongue,
Speaker 1: Taiwan's Digital minister, whom you probably know. Uh. That was
Speaker 1: a very special experience. It should China and the United
Speaker 1: States each have a digital affairs minister like Audrey Tongue.
Speaker 1: I'm not sure. I think UM, whatever role is called
Speaker 1: chief technical officer, chief Digital officer, chief AI officer, that
Speaker 1: role has to be empowered in order to be impactful
Speaker 1: for any country. I think what's perhaps more important is
Speaker 1: to let private enterprises do what they do best. That is,
Speaker 1: let private capital invest in private companies to build companies,
Speaker 1: and to the extent that they're successful in getting users,
Speaker 1: in generating revenues and profits, they will get more money
Speaker 1: and then potentially be listed publicly under to success. But
Speaker 1: the role of governments is really to provide the types
Speaker 1: of infrastructure that private companies cannot do, and to have
Speaker 1: really as open as possible technical policies that let new
Speaker 1: technologies have a chance to perhaps grow faster and potentially
Speaker 1: even disrupt traditional UM technologies. I think it is that's
Speaker 1: openness and infrastructure building UH that will ensure the country
Speaker 1: moves forward. China does a reasonably good job on both UH.
Speaker 1: Infrastructure building would be examples like building a new highway
Speaker 1: for autonomous driving or even a new city the size
Speaker 1: of Chicago for autonomous driving. And as far as open
Speaker 1: policies would be the example of letting the Chinese software
Speaker 1: companies develop payment so much so that these up mobile
Speaker 1: payments have squeezed out cash as well as credit cards
Speaker 1: from almost into obsolescence. So these are the kinds of
Speaker 1: examples that has pushed China ahead to the extent possible.
Speaker 1: I think other countries can try to build similar infrastructures
Speaker 1: and have such open mindedness about technology, otherwise there would
Speaker 1: be risks of falling behind. I attended your Asia Society
Speaker 1: event in New York October one, and I have to
Speaker 1: admit to being surprised to see you in an extremely smart,
Speaker 1: well tailed three piece suit with an immaculate tie. I
Speaker 1: don't think it was many people's vision of what a
Speaker 1: tech guru would look like. Where had you just been
Speaker 1: I knew I was going to the Asia Society. I
Speaker 1: was going to greet many people who wear suits and tie. Um,
Speaker 1: but to be fair, I do wear a certain tie
Speaker 1: quite often and that's my prefer attire. Dr Lee, thank
Speaker 1: you so much for joining us, and congratulations on the book. Okay,
Speaker 1: thanks so much. Benchmark will be back next week. Until then,
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Speaker 1: Thanks for listening. See you next time. It was not
Speaker 1: the Boy