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First Move with Julia Chatterley

COP 26 Focuses on Funding the Push for Net Zero; A Tough Election Night Means Big Questions for Biden's Agenda; Facebook is Ending its Facial Recognition Operations. Aired 9-9:45a ET

Aired November 03, 2021 - 09:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[09:00:14]

JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York, I'm Julia Chatterley. This is FIRST MOVE, and here is your need-to-know.

Show me the money. COP 26 focuses on funding the push for net zero.

Democrats' dilemma. A tough election night means big questions for Biden's agenda.

And face off. Facebook is ending its facial recognition operations. But what about Meta?

It's Wednesday? Let's make a move.

A warm welcome once again to FIRST MOVE where going green means raising lots of green. We're all about climate ka-ching on today's show. Green

energy commitments at COP 26 have been ambitious. The money to pay for them will need to be prestigious, will the financial community step up? Well,

critics, they're justifiably suspicious.

The world's Finance Ministers though are out in force today including the U.K. Chancellor hoping to turn London into the world's first net zero

financial center to fund the green transition. Forget Brexit, here comes the carbon exit.

Great guests just a hop, skip, and a jump away here on FIRST MOVE, too. The President and co-founder of ride hailing app, Lyft, John Zimmer talks

recovery and sustainability with a promise to be fully electric by 2030 on the platform.

And from electric vehicle evolution to artificial intelligence revolution, former Google CEO Eric Schmidt has co-authored a new book on the promises

and perils of AI. We'll also get his take on Facebook's metamorphosis and its about-face about your face.

For investors, a wobbly Wednesday in the meantime after the Dow topped 36,000 for the first time on Tuesday, lots to face up to. A Republican

rebound in Tuesday's state elections in the United States and a Federal Reserve meeting to announce long telegraphed tapering. What they say about

raising rates, though, could be market shaking.

The news is nonstop, let's get to COP.

The money to get to net zero is there says the U.N.'s climate envoy, it's just not in the right places. The U.K. says to get there, we need a quote,

"rewiring of the world's financial system." It's announced a plan to be the world's first net zero financial center. And this will help align 40

percent of the world's financial assets with a one and a half degree Celsius goal, it says.

I'm grateful to see Bill Weir joins us now from COP 26. Bill, great to have you with us again. Let's be clear, this is a huge amount of money that

we're talking about that is now aligned on the Paris climate goals. We're talking what -- $130 trillion? The critical question is, is it aligned

appropriately? And is it aligned towards concrete projects? Because that's what we need.

BILL WEIR, CNN CHIEF CLIMATE CORRESPONDENT: Exactly, Julia. You know, the devil is in the details as the cliche goes. And you see a sign around some

of the protesters here along the River Clyde and around the blue zone behind me that says "Net zero is not zero." And you get the feeling that

these huge banks, what is it -- 450 financial institutions in 45 countries might be able to justify a net zero financial portfolio by offsetting their

investments in fossil fuel companies by maybe throwing some money towards renewables in some ways.

Scientists would argue that won't work. Ultimately, the goal is for humanity to stop using fuels that burn and leak as soon as possible. And no

country, the greenest from the brownest is talking about that, about shutting off oil wells and fracking sites.

And so, you know, this is interesting. And then of course, there's the pledge -- $100 billion a year pledge from the rich countries to the poorer

countries to help them adapt. We got a little bit of the actually bucks behind that just now first on CNN, we can report that Steny Hoyer, the

House majority leader for the Democrats in the United States is proposing legislation that would establish a $9 billion trust fund for the U.S. State

Department to fund developing countries' reforestation or to help them stop deforestation.

Of course, it has to pass through a divided Congress, although Republicans have been behind a trillion tree program in the past. Many on that side

think that maybe we can plant our way out of this mess with enough trees. Scientists would disagree with that. But it'll be interesting to see. Boris

Johnson who of course, framed this whole thing as coal, cars, cash and trees to bore down on where exactly that that cash is going and how.

[09:05:05]

CHATTERLEY: Yes, I mean, you've raise so many great points there. We had a taste of somewhere closer to effective zero rather than net zero during the

pandemic, and huge swathes of the world had to stop in order to see the climate suddenly spring back to life in our seas, to some degree, clean up

as well.

Your point I think about fossil fuel investment is a really important one. I read a stat this week from the I.M.F. that says $11 million a minute is

spent in some way subsidizing fossil fuels around the world. If we could just harness a fraction of that. I am not saying that we don't need fossil

fuels, at least in the interim while we transition, but if we could harness a fraction of that and repay it into renewables, some huge part of the

battles there surely.

WEIR: Exactly. And those subsidies, there's direct subsidies in countries paying oil companies to keep their prices lower or giving them tax breaks,

but there is the indirect subsidies, which is when you go fill up your, your car with petrol, as they say, over here, if it said, you know, the

price per liter, actually reflected the cost to human health, to premature air pollution deaths to the cost on the environment, it will be six or

seven times what you're paying now. That's where the brunt of the subsidies go, and that's the argument right now if we're going to stop digging this

metaphorical hole for humanity, the first thing we should do is stop paying the guys with the shovels.

CHATTERLEY: Yes. Couldn't be more. Bill, great to have you with us. Thank you so much for that. Bill Weir there.

Okay, let's move on to the Democrats' dilemma. Less than one year into the Biden administration, the party suffers major setbacks in governor's races

in Virginia and in New Jersey. John Harwood joins us live from the White House.

John, my apologies there on the name. A deeply demoralizing night, I think for the Democrats. Can you be specific for our international audience what

you see is the policies that were being rejected here. And to what extent, what we saw in those two states is perhaps a blueprint for other states as

we head closer towards the midterm elections.

JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: Julia, I think the biggest message of last night's results in both Virginia and New Jersey is that

voters are unhappy with the persistence of the pandemic, which has disrupted American life in such profound ways, and the associated economic

effects of the pandemic.

So you're seeing in the restart of the economy, it was slowed in the third quarter by the resurgence of the delta virus, we've seen the inflation

significantly rise, some goods are harder to get and they're more expensive if you can get them. All of that -- we are down 10 million jobs from the

pre-pandemic, and some people feel apprehensive about going back to work because of the pandemic.

And all of those things have weighed down President Biden's approval rating taken him from above 50 percent to well below 50 percent and made people

think that the change they thought they voted for in 2020 isn't paying off and that was to the disadvantage of Democratic candidates in both Virginia

and New Jersey.

Some of this, Julia, is the cyclical tides of American politics. Of the last 12 elections for Virginia Governor, for example, the party that was

not occupying the White House has lost the race or has won the race 11 of those 12 times, and that's because the party in the White House, the

President in particular becomes the embodiment of people's discontent. That's happened with Joe Biden, and that helped defeat Terry McAuliffe in

New Jersey and made an extremely close call for Phil Murphy -- I'm sorry, helped defeat Terry McAuliffe in Virginia, and made for an extremely close

call for Phil Murphy in New Jersey.

CHATTERLEY: So, I guess it goes back to the question, John, if you can tackle some of these issues that you're saying there, deep unhappiness or

discontent as we transition out of the pandemic, some of the issues, high energy prices, there's lots of things for ordinary people to be worried

about, never mind some of the policies that we've seen, particularly from the more extreme left of the Democratic Party.

Is there a warning in here for the Democrats? And also, I think, for the Republicans a message here about what the party can look like in certain

states, at least, minus Donald Trump?

HARWOOD: Well, certainly Donald Trump is a galvanizing figure for the base on both sides and Democrats had hoped to use him in Virginia as a way to

get their base out, the Democratic base is very demoralized right now. They're watching Democrats in Congress fight over the Biden agenda and

seems to be stuck in moving at a molasses' pace forward.

But I think what both the Biden White House and other Democrats are going to take away from this is A, they need to pull together and enact the Biden

economic agenda so they can go to voters and say, here's what we've done for you. And secondly, focus, refocus on getting the pandemic under

control. If they can do that, if -- the and we're seeing some positive trends in terms of receding case counts and deaths and hospitalizations, if

they can do that, and the economy's in better shape in 2022, they'll have a much better shot at trying to hold the Congress.

[09:10:19]

HARWOOD: They are still likely to lose it because that what tends to happen in the first midterm of a presidency year. For Republicans, clearly

in Virginia, where there's a lot of suburban voters, Glenn Youngkin benefited by keeping Donald Trump out and trying to deflect the charges

from Terry McAuliffe that he was a Donald Trump in a sweater vest.

The challenge is going to be when you get into congressional races, the House and Senate races, can Republicans pull that off in party primaries,

and elect candidates who are going to keep distance from Trump and then take the fight to Democrats? Not a hundred percent clear they can do that.

But certainly, a significant chunk of the party will adopt that as their strategy and to focus on issues that are very much of concern to voters

like education, like the economy.

CHATTERLEY: Yes, a lot of soul searching, I think to be done in the coming days. John Harwood, thank you so much for that.

Okay, let's move on. Facebook's face off. It is scrapping its facial recognition software, which identifies who's in photographs and videos.

It's also wiping its database of a billion faces amid ethical and privacy concerns.

Anna Stewart joins me now. Anna, as we've said, with Facebook, timing, is everything. So perhaps no surprise of the timing on this, unless, once

again, you read the print, and I see the name Facebook, just a few days after they said that they're now going to be called Meta. So who exactly is

backing away from facial recognition technology and will or will not -- will or will not know -- now that doesn't make sense. Will people's faces

be deleted or not?

ANNA STEWART, CNN REPORTER: I mean, the distinction now of the Meta group very useful, actually, because this relates to Facebook only, the Facebook

platform. And this is one function that they use, which essentially identifies users in photos, if the user has actually opted into it. The

wider Meta group are not banning the use of facial recognition technology, and actually, they're heavily invested in it. They see it as very valuable.

But they have made a distinction today saying that they see it increasingly as particularly valuable when it operates privately on a person's phone. So

when you use your iPhone, and you unlock it, the data that is stored on the phone, not going to a server, obviously giving the user more control, but

also reducing the exposure for some sort of data breach in the future.

The Vice President of Artificial Intelligence said in a statement, the reason behind this was that they need to weigh the positive use cases for

facial recognition against growing societal concerns, especially as regulators have yet to provide clear rules.

I thought this was so interesting, because it's showing that they do balance the good and the bad impacts of their social media platforms. I'm

not sure that it's going to quash the huge concerns swirling around Meta right now in terms of the impact that platforms are having on mental health

and so on.

And once again, prodding regulators, they're saying, as ever, they will play by the rules, someone needs to write the rulebook, and it's not going

to be them. And with this sphere of biometric data, regulation would be very helpful -- Julia.

CHATTERLEY: Yes, it's fascinating, isn't it? It's okay to get ahead of this before the regulations come into place when it doesn't really impact

the financial performance of the company, a little bit of a different story when you're talking about the social media platform itself, perhaps.

Anna, very quickly, they have come under scrutiny and been fined in this sphere in the past by the F.T.C.

STEWART: Absolutely, and I think it's important to note that while there has been no data breach with their biometric data, there have been so many

circumstances where social media platforms like Facebook have had private information or public information scraped from them.

So your profile photo, your name, where you live, your workplace, and that can be scraped by a third party company, which has facial recognition

software that can build up a database and sell it on to other companies or even law enforcement.

So, it's a really murky area. There's only actually so much that these big social media companies can do, and often, it is dealt with jurisdiction by

jurisdiction with civil lawsuits and what's really needed of course, as with all of these things, is a big international regulatory framework.

CHATTERLEY: Yes, if only ClearView AI, of course, that was the company, wasn't it? Where they demanded that they stopped scraping pictures from

Facebook and Instagram. Yes, so they understand both sides of this story, too. Yes, no more scrutiny, please, I think is the message if we can avoid

it.

Anna Stewart, great job. Thank you.

And in about 15 minutes' time, we'll talk more about artificial intelligence and other things with the former Google CEO, Eric Schmidt.

For now, let me bring you up to speed with some of the other stories making headlines around the world. A joint investigation by Ethiopia and the U.N.

says all sides in the Tigray conflict have committed violations that may amount to war crimes. It was released a day after Ethiopia declared a state

of emergency. Sources are telling CNN, forces from the northern Tigray region are now on the outskirts of the capital.

[09:15:06]

CHATTERLEY: CNN's Larry Madowo joins us now live from Nairobi. Larry, great to have you with us. I want to hone in on this report. Atrocities may

have been committed by all sides, but what they're calling for as well in this report is an independent investigation to find out exactly what

happened. How likely is that investigation?

LARRY MADOWO, CNN CORRESPONDENT: It is unlikely because even this joint investigation by the U.N. and Ethiopia Human Rights Commission, Julia, had

some shortcomings. They were not able to go to other the locations they needed to go to. And this investigation covers only the period from third

November 2020 until the end of June this year when Ethiopia declared a unilateral ceasefire. That has since changed and it is now actively

carrying out airstrikes in Mek'ele, that is the regional capital of Tigray in the north, and where they say they are targeting specific locations that

are used by the Tigray People's Liberation Front, and that is something that the report author in the U.N. Human Rights Commission talked about in

her statement today.

(BEGIN VIDEO CLIP)

MICHELLE BACHELET, U.N. HIGH COMMISSIONER FOR HUMAN RIGHTS: We are receiving continued allegations of serious abuses and violations of

international human rights and international humanitarian law. There are reports of shelling and airstrikes resulting in civilian death, summary

executions, large scale displacement, and a worsening humanitarian situation.

(END VIDEO CLIP)

MADOWO: Julia, this conflict is not coming anywhere close to an end; if anything, it is expanding. Ethiopia yesterday declared a state of emergency

nationwide because there are fears that fighters from the north are advancing south towards the capital Addis Ababa, and so that's the major

development.

Also yesterday, there is a slew of news coming out of Ethiopia. The U.S. warned Ethiopia that unless it changes course in this conflict, it will be

pulled out of a major preferential trade deal, the African Growth and Opportunity Act that allows it duty free access, access into the very

lucrative U.S. market.

But Ethiopia says, we've done nothing wrong, and pulling us out of a GOA would hurt ordinary people, the men and women who depends on leather or

apparel exports into the U.S., and not the people in charge of the conflict in the north.

CHATTERLEY: Yes, another devastating blow for ordinary Ethiopians. Larry, great to have you with us. Thank you.

In Australia, a missing four-year-old girl has been found alive after an extensive search that drew national attention. Police rescued Cleo Smith

from a locked house Wednesday morning 18 days after she vanished from a campsite. She has been returned to her family and a man has been taken into

custody.

Coming up after the break, giving Lyft a lift as drivers make a post pandemic return, the founder of the ride hailing app joins to map out the

platform's future. That is next, stay with us.

(COMMERCIAL BREAK)

[09:20:24]

CHATTERLEY: Welcome back to FIRST MOVE. It's another important Fed day in the U.S.A., a subdued stock picture meanwhile as investors await the

Central Bank's decision on trimming stimulus, plus any clues on when it might start raising interest rates. Patient Jay Powell is patiently

awaiting his own news, word from Joe Biden on his future. Biden saying Tuesday, this decision on a second term for Powell is coming quote "fairly

quickly."

In the meantime, gains coming quickly for car rental firm, Avis. Shares spiked 200 percent on Tuesday after a big earnings beat. Avis is also

promising to offer customers more electric vehicle options soon.

In the meantime, Lyft plotting a journey to recovery from the pandemic with strong earnings and shares are surging by a whopping 14 percent premarket.

Investors encouraged by news that drivers are returning to the ride-hailing app jumping nearly 45 percent year-over-year. The company says it is now on

course for sustained profitability. And like Uber, the company is headed for a fully electric fleet by 2030.

John Zimmer is cofounder and President of Lyft, and he joins us now. John, always great to have you on the show. I think this is the kind of investor

reaction that management always like to see after earnings reports have been released. At the core, it's getting easier to attract drivers.

JOHN ZIMMER, COFOUNDER AND PRESIDENT, LYFT: Yes. Absolutely. As you mentioned, 45 percent growth in active drivers year-over-year, also on the

rider side, we added nearly two million new riders to the platform in the quarter. So, feeling great about the quarter, feeling great about the

recovery.

CHATTERLEY: Let's talk about the riders because you've also said as you look forward to what we're seeing in the fourth quarter, it's going to help

service levels, it is going to mean reduce wait times. It is also going to mean lower prices. Can you give us a sense of how much lower?

ZIMMER: I can't give exact numbers, hard to predict exactly. But the other thing I can mention on the rider side is that since the pandemic started,

we've added a lot of different price points. So, we're typically you would have just one choice with Lyft per class of vehicle, even within the same

type of sedan vehicle that you might get, there might be three price points depending on how much you're willing to wait or how fast you want to get

the ride.

CHATTERLEY: And so, what are you seeing in terms of the mix of people then? Are they making choices to wait longer in order to get a cheaper

ride? How are you seeing that utilized?

ZIMMER: Yes. It depends on the time of day and the need for that use case. But yes, we are seeing the ability for people to wait and save money, which

is the name of the mode is "Wait and Save." You can save you know, something like $5.00 if you're willing to wait five to 10 minutes, and then

you can pay a little bit extra if you want to get picked up in two minutes.

And so it is both by an individual who is more price or time conscious, but also in the individual moment, if I need to get to work by a certain time

or if I have a little more flexibility because I'm going out at night.

CHATTERLEY: Yes, I mean, you can correct me if I'm wrong on some of the data. But as of two weeks ago, the price per mile driven for Uber and Lyft

across the United States as a whole was up 26 percent versus 2019 levels, and up 17 percent versus January. Can we suggest that we may be back to

some degree of normality in terms of pricing by the end of the fourth quarter? Or is it too early to predict?

ZIMMER: Again, it's hard to predict. It has been really hard to predict COVID throughout the last year and a half.

CHATTERLEY: Very true.

ZIMMER: But it is proving, it is getting to a better equilibrium. And in addition to the prices coming down again, we're offering multiple price

points to help as well.

CHATTERLEY: What difference do you think that the reopening at the borders is going to make, as you said, you're adding more active users at the same

time as you're adding drivers? If you add some degree of tourism as well into that, that could also be a pricing pressure and a time pressure.

ZIMMER: I think it would be overall positive to be driving more demand. Again, the driver return is happening. Every quarter, it will get better

and better. We looked back at some Bureau of Labor Statistics, some government data on labor in the hospitality and retail industry and active

drivers on our platform are coming back five times faster than labor in those other sectors.

And so I think we'll be able to deal with and welcome the increased demand of tourism. We are seeing that airport rides are up 3X year-over-year, so

things are coming back and overall, that's a good thing.

CHATTERLEY: Yes. It makes sense to me. You announced last year that you're planning to have the platform all electric by 2030. Can I ask what you made

of the Tesla-Uber-Hertz deal trying to make it easier for drivers to access at the same price that they would pay for a gas car or a petrol vehicle an

electric vehicle, a Tesla?

[09:25:04]

ZIMMER: Yes, I mean, we love seeing more electric vehicles come into rideshare. Again, we were the first company to commit to all electric by

2030. The reason we feel so confident in our ability to do that is because we have a portion of our business called Flex Drive, which the drivers, we

rent out vehicles through a subsidiary, and we have a lot of control through that process to make sure that we can get those vehicles and get

them at the right price.

We've had electric vehicles in the fleet for years now, and it works really well for our driver population, because they utilize the vehicles more than

an average person who's just using it for personal reasons. And so, the payback on something like the battery is much better.

CHATTERLEY: Are you talking to Tesla? Are you talking to some of the big electric car makers to do these kinds of deals? Because surely that's going

to help. What you're saying you're going to achieve by 2030 is a huge feat.

ZIMMER: Yes. Absolutely. We're we are talking to various OEMs, and also regulators to make sure that that policy supports drivers on our platform,

and not just drivers that can afford a personal Tesla, but oftentimes individuals who don't have the right credit scores or things like that, can

get cars through a rental program or through our rental program in a much easier way, which is important.

You also, with drivers on our platform, have more miles driven per vehicle. And so the environmental savings are bigger when you get EVs on rideshare

versus just with personal vehicles.

CHATTERLEY: And that's better for the climate. John, great to have you with us. John Zimmer, co-founder and President of Lyft. Always great to

chat with you, sir. Thank you.

ZIMMER: Thank you.

CHATTERLEY: All right, coming up, are we smart enough to outsmart artificial intelligence? I speak to the former CEO of Google and the head

of M.I.T.'s Computing College about their new book, "The Age of AI and our Human Future, " that's next.

(COMMERCIAL BREAK)

[09:30:03]

CHATTERLEY: Welcome back to your FIRST MOVE and cheering and smiling faces there over at the New York Stock Exchange and U.S. stocks are up and

running and it's a cautious open after the Dow's first ever close above 36,000 in Tuesday's session. The S&P and the NASDAQ also hit record highs.

The Federal Reserve meanwhile getting its last piece of economic data before its big policy announcement later today. U.S. private sector jobs

growth rising by greater than expected 571,000 last month, encouraging news for policymakers as they get set to announce a pullback in pandemic

support.

And now, to the real power of artificial intelligence. Here are just a few examples of what AI can do. It can win a game of chess using moves human

Grandmasters would never consider. It has discovered an antibiotic by analyzing molecular properties scientists didn't previously understand. It

can defeat an experienced human pilot in simulated dog fights. The problems AI can solve are complex and sophisticated. But so too other questions its

use raises.

Joining us now, Eric Schmidt, Chair of the National Security Commission on Artificial Intelligence and former CEO of Google. We are also joined by

Daniel Huttenlocher, Inaugural Dean of the M.I.T. Schwarzman College of Computing and they are both co-authors, along with Dr. Henry Kissinger of

the new book, "The Age of AI and Our Human Future."

Eric, Dan, fantastic to have you on the show. I just want to set the scene first and foremost, because that's where the introduction took us and where

the book begins on the capabilities of AI software today. And it begins with a chess game where the software didn't rely on any human experience or

knowledge of strategy. In the space of four hours, it taught itself to win and it confounded Grandmasters. That's the kind of power that we're talking

about, Eric.

ERIC SCHMIDT, CHAIR, NATIONAL SECURITY COMMISSION ON ARTIFICIAL INTELLIGENCE: Most of us did not think this was possible.

CHATTERLEY: Yes.

SCHMIDT: They fed the rules of the game to the computer, and in four hours, it could beat every human. It learned not only the rules, but also

the strategies, and it learned all the strategies that human had developed in a few thousand years. What's interesting about it is it also developed

some new strategies that humans had never invented and that's pretty powerful.

CHATTERLEY: I mean, it is proof effectively that AI is no longer constrained by the limits of human knowledge.

SCHMIDT: In our book, Dan and Dr. Kissinger and I basically say that this is a new epoch in human experience that hundreds of years ago, there was

something called the Age of Faith and in the Age of Faith, you basically talk to God, and the Age of Reason replaced it, which is how we have

critical thinking, how we invented the future that we've had for the last few hundred years, which has been extraordinary in terms of its progress.

We argue that the arrival of a new kind of intelligence will be both our partner, but also the bane of our existence, in the sense that it will

really drive a completely different interpretation of how people think, and how they live.

CHATTERLEY: I mean, you described it as a rival, potentially in the book too, which I found fascinating. Dan, come in here, because it's multi-

discipline, too. And I just want to emphasize the point further, because this blew my mind as well. And again, I mentioned it in the introduction,

finding an antibiotic for a drug resistant bacteria that scientists simply didn't understand the decisions that the AI software was making. We are

effectively seeing the transfer of judgment from human beings to a machine in the outcome here.

And it was happening incredibly fast, too. It's unlike anything we've seen before. Dan, that's to you.

DANIEL HUTTENLOCHER, INAUGURAL DEAN OF THE M.I.T. SCHWARZMAN COLLEGE OF COMPUTING: Yes. So, AI perceives the world we're starting to see, it

perceive the world in ways that are different from the way humans perceive the world and that both offers tremendous opportunity for new discovery,

chess, antibiotics, things that humans have been studying for decades or even centuries and haven't made progress on.

But it also can pose challenges because if something perceives the world differently than you do, you know, we all know people perceive the world

differently than we do. It's very important to understand the nature of those differences. And because AI is new and something we've really just

created recently, we don't understand how to handle AI and perceive the way that it perceives the world differently than we do.

CHATTERLEY: And this is some of the questions that you asked in the book is, how will being a human change? What does AI enabled-war look like? What

advantages will it create? What disadvantages will it create? And I go back to the example of alpha zero and some of the decisions it was making, it

was choosing to sacrifice a queen.

[09:035:12]

CHATTERLEY: It's for the greater good of winning the game overall. And again, that confounded the Grandmasters. And Eric, I am sure this comes

from you with your experience with the National Security Commission on AI. What if we got to a situation where AI was saying, we can sacrifice 3,000

lives in order to save three million lives and says to whoever's in charge of this, and you have three minutes to make a decision. That kind of power

and those kinds of questions, profound ethical questions were to be asked.

SCHMIDT: The three of us fundamentally believe that these questions are not being asked correctly.

CHATTERLEY: Right.

SCHMIDT: So you have a combination of this new intelligence, which is not the same as human, but humanlike, organized around objective functions is,

as Dan likes to say. It's all about the objective function. What is this thing learning?

But you have a compression of time and we're extremely worried that the compression of time will cause people to become dependent on the systems

which at least today, are imprecise, emergent, still learning, still changing. Would you really want that kind of a profound decision to be made

by a machine? I don't think so. I don't think we do.

At a minimum, we need to start discussion about the most extreme cases, the most obvious one is essentially launch on warning. It's like the Dr.

Strangelove scenario, where, you know, they think a launch has occurred and so they guarantee a response even if the launch doesn't happen. That kind

of stuff can create incredibly dangerous, and incredibly destabilizing National Security scenarios.

CHATTERLEY: But you can't look at this as one nation, Eric, either. I mean, whether or not the United States or Europe can overlay a set of

ethics. And I know you have questions about the way that that Europe is looking to regulate this, too. But what about North Korea? What about for

China? What about Russia? Because you've certainly step forward in that whopping great report and I had a look through it last night, 756 pages, I

believe. And one of the things was saying, look, we can't ban the development of AI infused weaponry, because it can be a defense as much as

it is an offense.

SCHMIDT: We looked at this really carefully, and what we concluded was that if an improvement in war, if that's a correct term, is to be more

precise, that is less collateral damage, these will be very good. One of my military friends explained to me that the majority of the deaths in these

kinds of situations are from target misidentification. In other words, they get the wrong group. We've seen this most recently in Afghanistan.

So, there is hope that these technologies will allow war, which is never good to be precise with as little essentially collateral damage.

The question to me is, what do we do about these extreme cases? In our report, what we say is, we would like Russia and China, to say clearly that

they're going to only launch nuclear weapons under human command. That doesn't seem like an unreasonable request given the disruptive nature of

those weapons.

CHATTERLEY: How do we tackle this, Dan, because you're going to be in charge of teaching, promoting, helping people coming into this industry

because they're excited and they see something new and something exciting that is going to be a game changer.

I think you also feel very passionate that this is bigger than the invention of the internet, bigger than social media in many respects. And

in the book, you guys talk about needing CEOs, scientists, strategists, statesmen, philosophers, clerics to come together to work out how best to

understand to develop to regulate this. Dan, what does that look like in practice?

HUTTENLOCHER: So as we say, in the book, we really call for a new ethic, a new philosophy underpinning artificial intelligence, much like when you

look at the transition that Eric talked about from the Age of Faith, to the Age of Reason. We're now moving to an age where there is faith, reason, and

AI.

In that era, 400 or 500 years ago, there were huge advances in philosophical understanding, and those philosophers were people who often

came from other walks of life. They weren't professionally studying philosophy and that's one of the things that we really look for going

forward in the future here over the next few decades, is how do we build new underpinnings for AI that are informed by people's understanding of

domains not just engineering, not just business, not just computer science, not just foreign relations, not just the military, but from everywhere, but

all of us looking at the set of philosophical issues that are posed by the fact that there is a new type of intelligence there that we don't fully

understand.

SCHMIDT: Can I add that --

CHATTERLEY: Yes.

SCHMIDT: Can I add that Dan and I disagree a little bit on this. I think that we have very little time. Dan is a bit more cautious in the claims

here, but I would tell you that there is massive investment in these technologies around the world, massive investment in the United States.

[09:40:15]

SCHMIDT: In Dan's program, which is sort of one of the best programs in the world of AI. Essentially, everybody is majoring in machine learning and

AI and computer science now. There is just way big. And the wave is coming in China, they produce more PhDs, in many cases, better PhDs than in the

West. There's enormous investment in the tools that we describe in our book. We've got to get our act together now.

CHATTERLEY: How long do we have, Eric?

HUTTENLOCHER: But one thing that's very encouraging in that --

CHATTERLEY: Dan, I know you're positive, but I want Eric to tell us how long we've got and what the consequences are of not regulating this in your

mind properly. And then Dan, you can come in with a positive finale.

HUTTENLOCHER: Certainly.

SCHMIDT: I think we have 10 years, and we need to spend the next couple of years deciding what we want and then the decisions within the next five

years will shape the outcome in 10.

CHATTERLEY: Okay, Dan, how long do you think we've got.

HUTTENLOCHER: My positive vibe was going to be more on Eric's timeline, which is I think one of the really encouraging things today is many

students are very interested in social and ethical questions and implications and responsibilities of deploying artificial intelligence. And

so we get the smartest young people today looking at these problems, and also having depth of technological expertise. And we see this at M.I.T.,

and we see this elsewhere at other institutions. And I think the smart young people can do a lot in a short time period.

CHATTERLEY: You're our hope. Eric, I have one more minute, without appropriate regulation, will AI be a net positive or a net negative? And

could AI be used as the solution? Could AI find the solution to regulation that we've failed to do and things like social media? And you literally

have one minute to answer?

SCHMIDT: It's going to be hard to tell the AI what to do until we can decide what we want in terms of the outcomes, and we don't all agree.

CHATTERLEY: But it does need us.

SCHMIDT: I think it's pretty clear that AI will be regulated in some form. It's clear that some of the worst case scenarios, I'll give you an example

Facebook yesterday, I guess I should call it Meta is deleting all of its face data. That's a sort of -- and Dan likes to say that's a very blunt

decision. We're getting out of that business, because it's too complicated for us, there are too many issues. And I think you're going to see more of

that.

We need to focus on the most extreme cases that produce really negative outcomes and get ahead of ourselves in terms of what we want as a society.

That's not a decision that should just be left up to the tech people.

CHATTERLEY: Yes. Guys, we have to end it there. Great to chat to you. Please come back and we'll continue this conversation soon.

Eric Schmidt and Dan Huttenlocher there, co-authors of "The Age of AI and Our Human Future." Thank you.

And that's it for the show. Stay safe. "Marketplace Asia" is next and I'll see you tomorrow.

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