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Do you want AI involved in your brain surgery if it's really good?
Okay.
The reason I'm asking you is because China is actually testing an AI assistant for neurosurgeons seven hospitals in Beijing. The bot's going to answer questions with citations based on more than a million academic records, could help with CT scans images. Eventually, though, the researchers envision the AI taking a more active role, warning doctors from pursuing risky procedures for instance.
Yeah, there's a lot of questions about this, right. We have a great guest to talk about this, because you know, the idea of having AI helping in the operating room could be an issue of trust. But you do wonder you could have a doctor who's had a little tired watching the oscars or doing something else, and you do wonder about that element. So there's a lot at stake here and we've got a great guest to get into it.
Yeah. Michelle guide To, a CEO of the CROC Institute for Tech Diplomacy at pursue. She's Purdue. She's also a former Assistant Secretary of State for Global Public Affairs that was during the Trump administration from twenty eighteen to twenty twenty. Michelle joins us from Austin at Texas. Michelle, good to have you on with us.
How are you good to be with you?
Well, good to join us. I'm so glad you're joining us on this because we've been talking a lot about AIS. You can probably imagine, but you and the team over at the Institute for Tech Diplomacy at Purdue. I got a a poll on our radar from Edelman and we talked to the Edelman team a lot about their trust barometer. And this one specifically has to do with trust in AI companies declining. And it's not just here in the US,
but it's around the world too. How can companies that are working on this technology earn the trust of us?
So thanks for that question. I've seen that poll and it says that about thirty five percent of Americans now trust companies to do what's right when it comes to artificial intelligence. Let me give two other numbers for you. The first is twenty thirty, which is the year that China has stated that it wants to lead and dominate in artificial intelligence. The other number is fifty one billion dollars, and that's how much China is committing to science and technology,
which is up ten percent from last year. They just announced this coming out of their National Party Congress. And I share those because there's important context in terms of the trust that we are putting in our government and in our tech companies to innovate properly when it comes to artificial intelligence. But it's not happening in a vacuum.
That is happening in the context of a competition with adversaries across the world who want to use these technologies, dominate in these technologies, and compete with us in order to advance their value system and their systems of government which are authoritarian versus ours. So that's really important context. But this notion of trust is so central, and it's not about the tech, it's about the trust. And the good news is we don't just have to rely on
government to get it right. We don't just have to rely on tech companies to get it right. And what the CROC Institute for Tective PLOYANCDE is doing is also making sure that citizens are involved in shaping this, that they have a right and they have a responsibility in order to help shape and dictate where AI goes. I'm
here at south By Southwest in Austin. This is a gathering every year of creatives and leaders in media and an innovation and that's why we're here having conversations around, well, what is the role necessary role that you play in national security and in geopolitical competition. So it's getting everybody involved, and here's two practical ways to do this.
Hold on, let me let's I just want to jump in real quick, because I you know, if there is one thing that unites democrats and Republicans, like, there's only one thing, I think it's it's kind of beating up
on these tech CEOs when they do testify. And we did see in recent weeks examples of the way that Democrats and Republicans do not think that companies like meta platforms have guardrails on the way that they're serving content, the algorith rhythms that they're using two feed content to for lack of a better term, miners here in the US. So I'm wondering how you can rely solely on companies to actually get this right without involvement from government or without relying on government.
Yeah, well, I would add and maybe challenge what you just said. There's actually another really bipartisan issue in DC, and that is winning the competition against China, and specifically on technology. And so with that context, it isn't just about relying on tech companies to get it right, whether it's in the US or in any of our like minded partners in allies countries, and it isn't just relying
on government. One good example of talking about bipartisanship is there's a new House bipartisan Task Force on Artificial Intelligence. So you've got leaders in the House across both sides of the aisle coming together to think about how do we engage industry in the right way, engage the public in the right way in dictating what role artificial intelligence plays in our lives. That's a great place for those who responded to the poll and said they don't trust companies,
so they don't trust government to get it right. Then working with and getting involved with the members. There's twelve members in that House caucus and that task force is a really good way to do it.
How do we do that. I mean, companies are going to be very careful. They don't love regulatory oversight, they don't like what they might deem as extreme regulatory oversight. I'm playing a little bit Devil's advocates. So how do we create quickly the right private public partnership on this, And to be fair, it's got to be global. None of these companies are operating in a vacuum, right. We've seen this with financial regulatory oversight, and often Europe has led.
We think about kind of climate Europe has led. So how do we do this in a smart way and quickly.
It's interesting that you actually see companies Microsoft, for example, trying to lead the conversation on AI and essentially saying we're not going to wait for government regulations to figure this out, and we're actually going to put out a proactive point of view on what we think some of the guardrails might be and initiate that conversation with government not only here in the US, but to your point,
in Europe and across other parts of the world. And that was a lesson learned I think from social media where we're flipping the script now and seeing private sector companies try to initiate that conversation. And that's a good thing because look, if do you feel.
Like, can I ask you something of the Michelle, do you feel like the world has learned their message on not having enough oversight on social media? And I know, we get into a free speech. There's it's complicated, right, It's not so black and white. But have we learned the lesson that you know, not having enough oversight in social media and content and you know, the false content that gets out there, the content that can hurt in
so many different ways. Have we really learned the lesson so that we get it right this time around when it comes to AI.
I definitely think you see some changes. So for example, when Facebook came out, Twitter came out, there wasn't a House bipartisan Caucus on social media because we didn't know that we needed one, and that all came after the facts. So now in the early days, you have things like this, this task force in the House trying to get ahead of it. You have companies I mentioned Microsoft earlier, trying
to get ahead of it. But here's the thing we don't want to rely too much on and point the finger at government to say, go figure it out, because if tech companies and innovators don't know where the technology is going, our government leaders, sure as heck, don't know
where it's going. And so this has to be a collaborative conversation not only with the innovators and the high tech companies and with government leaders and policymakers, but also with customers of those tech companies and constituents of those politics we trust to different.
How can we trust them to do it right? Come on, because they make money over you know, having more eyeballs, the velocity on social media platforms. How can we trust tech companies to do the right thing here?
Well, that's where I don't think it just has to be a hey, we're going to trust you, and I'm going to sit here and watch them. Be a spectator, and I hope you get it right. Whether it's it's asking that of tech companies or it's asking that of governments, it's well, then, what is the role of a customer, what is the role of an end user, and what is the role of a citizen in getting involved? Now on the front end in driving that conversation.
Hey, Michelle, we only have thirty seconds left. Should the US force TikTok's parent company to divest TikTok.
Well, the US is giving them the option to divest or be banned. But yes, because Byte dances a Chinese company, they're required by law to provide information to the Chinese Communist Party, and it's a surveillance platform, and it's an influence operations platform, so it does a national security issue.
I feel like we scratched the surface. We come back soon. Tim's angry. I will get like three questions in a row with you again.
We have a ton to talk about.
Come back, come back, come back. Michelle Gaida, CEO of Crock Institute Protect Diplomacy over at Purdue joining us from Austin, Texas. I'm sorry, it's excited because I want.
To talk to her too.
How do I trust them?
We'll call her.
After to do the right thing. All right, Now, he's not even going to listen to me. All right, you're listening and watching Pootburg Business Week.
Well, another piece of the Biden administration sweeping policy response to climate change fell into place last week. That was when the SEC voted to approve highly anticipated climate disclosure requirements for public companies.
That's right, Tim, The SEC's new rule is groundbreaking and that it requires public companies to make certain climate disclosures, mainly reporting of greenhouse gas emissions. For the first time, large public companies will be required to disclose their direct or scope on and Script two emissions. Notably, they must do so only if they deem them material significant to their bottom line.
That's what that means.
Okay, So all that said, some environmental advocates say it doesn't go far enough. Leslie Libruto is Managing director of Sustainable Finance at the Environmental Defense Fund. It's a nonprofit that works to address climate change, which it calls the greatest challenge of our time. She joins us from London today, Leslie, do you think the SEC climate disclosure requirement goes far enough?
Hey, guys, great to be here. To be honest, this SEC rolling it's a positive development for businesses and investors. We needed this step, it was overdue, and finally it's a chance to bring the United States to a point of consistency and rigor in disclosures that we hadn't seen before. So we obviously the Commission will go further, but this is a foundational step that we need to take in order to start moving us.
How much further, do you want the SEC to mandate that companies disclose emissions within their supply chain, because that's what a lot of critics are pushing back on right now.
Yeah, I mean, look, we need to start somewhere. And at this point, when we see all of the considerations being taken into account, climate risk is financial risk, and this is where we need to start. And you know, the SEC is long required disclosures across a number of different metrics, and finally we're seeing a step forward and
really getting public companies towards they need to be. And with the tunnel lined disclosures, it also gets smaller companies, gives them a chance to really get up to speed, and then finally we can evolve on this role over time. But for now, this is where we need to start to get the ball moving.
I mean, this is what ESG was supposed to be. I think about right to really understand environmental social governance issues and what risks financially materially they are for companies. Having said that, what the SEC is doing and Chairgantler is doing, we're now getting a standardization right, so apples to apples from company to company, but it's.
More than that it's apples to apples, but finally we have an ability to foster transparency. It means that investors and people like you and me can finally start seeing the data. As you said, apples to apples. But it also builds a more resilient market. Right if you're in Louisiana and you're a company and you're not thinking about flooding, you're not thinking about the material risks to your business that are going to affect ultimately your resilience and your growth.
And you know, imagine if your a utility company and you're not thinking about wildfires. I mean, if you look at the data, the US alone has suffered six hundred billion dollars in damages from just about one hundred weather months in the last five years alone. These are things that we're trying to start taking to consideration where we're looking at businesses and evaluating, you know, should I invest
in this one or that one. We now have data around just climate risk, which again is a financial risk that can help us make better decisions, help investors figure out where to allocate capital, and again help folks from Main Street to Wall Street figure out where to put their money.
Leslie, we talk scope on Scope two emissions. But my understanding is the biggest change from the proposed rules initially that public companies are no longer required to report Scope three emissions are those from the supply chain and the downstream use of products, even though that these often represent the largest portion of a company's greenhouse gas emissions. So is that kind of a big bummer to be quite honest.
I mean, look again, we got to start somewhere, right, and when we look where we got to start in the United States, we're asking public companies to now do something that. Mind you, ninety nine percent of the S and P five hundred already report on some metrics around sustainability and non financial metrics in general. So for us, it's a chance to really brand us up to speed and then we hope the SEC can keep evolving on this decision over time. Right, this isn't a one and
done deal. We have time to keep evolving this and you know, bring the United States to you know, where it wants to be in terms of fully encompassing climate risk as one.
When do we see this move the needle for investors, like, when do we start to see this type of data come out and actually move a company stock price.
You know, a lot of this data already exists. We talked to one investor. They have to collect twenty five thousand data points right now just to get a view of climate risk, and it's oftentimes really inconsistent. Because this rule is taking effect, and we can start, you know, taking time in about a year, those twenty five thousand data points that might be inaccurate, we can start seeing
them streamlined and be reliable. So again investors can start looking apples to apples and we can start seeing not only what are the risks, but how are these companies mitigating them as early as next year? Right?
And to be fair, I mean this is a leslie. This is about how climate can impact financially or does it have a financial material financial impact on a company. That's what this is about. This isn't necessarily assuming that it's going to force companies to do something better for the climate.
Is that fair? This is all about managing risk. It is asking companies to say, what material risks have you identified and what are you going to do about it? So when we're reading reports an less reports looking at a company, we can say, oh, they've considered these things that are straight up risks to the company, and we know that they're mitigating them. Again, I mentioned the stat about six hundred million dollars in damages from weather events.
This is real stuff. These are real risks that we're talking about, and this gives us a chance to look at those and say, did this company consider them? Are they looking at the things that pose significant risks of their business that could affect me and you and investors in making decisions about allocating capital, where to put more money, and how to shift kind of you know, what we're seeing as the future for a resilient market in the United States.
Well, having said that, I don't know what work you guys have done over at the EDF, but I do wonder in terms of, you know, the insurance industry, Tim and I in our Bloomberg News team, they have done a lot of reporting about was it home insurance in California or Florida where insurers are just kind of backing off because of the costs. Have you guys done works where you where you feel like certain industries, whether it's insurance, whether it's home builders, I don't know what where they are.
You know, once we get a clearer picture, we might find that there's a lot more of climate related material effects on their businesses that maybe has been way under reported.
Yeah, you know, our team we are constantly trying to equip the final community with independent analysis of what they need most to make decisions around climate risk. And this completely includes the insurance markets as well. I mean you said it so well right. We're seeing insurance shifts all over the place, people retracting from markets, premiums going up, and a lot of it us to do with. We have no idea how to price and assess the risk
that climate faces poses on businesses. So when we look at the insurance market, for example, it's a great chance for us to say, how are insurers thinking about this, Where can alternative tools step in to build resiliency, and how do we stop kind of fueling the beasts, so to speak, by making decisions that put consumers at risks
like building homes and flood zones. Right, And if we have a chance to start assessing data that's apples to apples, we can start making better decisions that again are working for just the general public and you and me.
You know what's so interesting, Carol, I'm looking at shares at BIL resorts. They're right now down five percent. This is a company that owns many mountains throughout the United States, some outside of the US. The company came out with earnings and said that they had forty what is it, unfavorable conditions forty two percent lower snowfall across the entire western North American resorts through January compared to the same period a year prior.
So this would play right into it exactly.
I mean, this is we're talking about. I mean, this is a company that has sample yeah, and that it's like because of climate change, because of our shifting climate, they're seeing real, real detriment.
No, and that's so Leslie, this is the kind of thing that we're talking about. You're nodding your head. Is California though, the holy grail? Because when it comes to rules, you know, in terms of you know, in regards I guess to some of the climate if you will, or sustainability reporting requirements, is California kind of the holy grail in terms of where we need to go with this. I know you say it's important, it's great, it's first step, but like, what's what's the endgame in your view?
You know, we've seen different regulations come through in different states, and this ruling is a chance to really streamline what we're seeing. Obviously, different states have adopted different kind of rigor in terms of, you know, where they want to see on climate reporting. Finally, because the SEC is an independent body, we're seeing a streamlining of the data that's going to be coming through. So it's a real chance to take the US to a place that is consistent.
Right and we've already seen sort of some of these multinational disclosure frameworks in other markets Canada, Australia, the EU, China. The US now has this as well to kind of bring us to a speed where it's international and global.
We only have ten seconds left. But if the election, if President Trump wins the election in November, what happens to these rules or the way you think about things.
I mean, fortunately, again the SEC is an independent agency acting on a mandate from Congress to protect investors at the end of the day, and meant you're not concerned, Hey, you know, you don't know. But again, because they're an independent agency, we're feeling that these disclosures hopefully figure Scots for hear.
Today leave it on that note, Hele Leslie, thank you so much. Leslie Libruto, Managing director of sustainable Finance at the Environmental Defense Fund, joining us right here in New York City,