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