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All Right, well, the biggest headline, of course, out of the WWDC was Tim Cook talking about artificial intelligence.
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Here in the studio with more is Sam Palmisano. He's former CEO of IBM. He is also currently the board chair of America's Frontier Fund, and nonprofit developed to support critical tech to ensure US competitiveness. Sam, it's so great to get you on set, your first guest on set for.
The new show. I'm honor, thank you so much.
We're going to get you a hatter ache show that it's something okay, perfect, We're gonna work my hair, little do, We're gonna work with shoot someone.
Okay.
So let's take a broader view. Then when it comes to AI, how does the US take the appropriate amount of risk to make sure that it can stay ahead.
That's a great question, quite honestly, and I'll step back and say, look, at the models today and why we created the American Frontier Fund. The models today are heavily oriented around software. You heard that today or the Apple announcements.
To stay ahead in tech, it has to.
Be much more than just software, So you need long term investments in science and research. US is far ahead in science and research, but we're losing track on commercialization that builds the new technologies that changes the future, and not just consumer convenience. I mean how healthcare is done, how banking and our financial systems are run, how the
national security, national defense occurs. All those types of things require much longer cycles of investment, and that's why we created this thing called the American Frontier Fund.
We want to keep the West ahead of the East.
So we have the Chips Act.
Right, Yes, we clearly have big tech innovating. Like where are we falling short? Like where do you think the money, in the talent and the time needs to go into That's.
A great question because obviously the issues telling me that, Well, okay, then I'll tell you that's an okay question.
I asked Roman for a good question.
But seriously, what it is that the point that the cycles that we're talking about for these very advanced applications to require I'll say, let's say ten to fifteen years, we call it the value of death. To take it from science and research through the value death to get
it to commercialization takes a long time. So to do that you have to create a partnerships or an ecosystem with the research laboratories, with the academic institutions, with the private sector as well, and you need government involved because of the risk associated of getting through the value of death.
And that's what we are about.
And what we've created is a new model for commercialization of this tech that it's required to keep the US ahead of the rest of the world, but also the funding models that make it attractive for private investment to come in to these opportunities.
Do we have that right now? I mean, when you look at sort of all the movement we see seen an AI as of lately, so much of it seems to be driven by the private sector. And even when the government got involved, who do they turn to first? They said, basically they brought the private sector and it said give us a solution to regulating this, which I think caused everyone to kind of scratch their heads.
Well, they're t two different questions regulations different than actually the creation of the tech and the creation of the tech. The reason why go back to the early days of your INCU tell the CEO of the organization's give them who created incutel.
That was for national security and defense.
But it was the same sorts of things that what could you do long term in technology to make the country more secure? And sometimes you need governments involvement because of their risk factors, no different than the Chips Act. As far as you're talking about billions of dollars to create these facilities which are necessary that we control the resilience of the supply chain.
But who's going to take the risk of forty or fifty billion in the private sector?
I mean, Intel might invest twenty billion, but you're doubling it up now for these kinds of technologies going into the future.
So this is why we've come up with this.
Model that says, Okay, we're going to collaborate in the science with the national laboratories and everybody else, and then when you have commercialization, we'll take it to the private sector. But whether there's high risk involved, we're going to ask for We're going to try to seek which we've done in our first fund, there's government involvement, there's private sector involvement as well. The combined are going to create the first fund we're about to announce in two or three.
Are there parallels between what you're trying to do and what we're seeing now and maybe what we saw coming out of the sixties seventies with some of the Defense Department projects and now there's some of the science based projects that were government based that eventually created the foundations for what really is our tech industry.
Well, you go through a dark both, right, is the in there? I mean, you go through those initials. I'm so old I was involved with these things. I mean, so I can take you through the history of hell was all was done. But fundamentally, it's those kinds of core technologies. Did you ever think of when you were exchanging technical documents it would lead to what you do
today on your Apple phone, which you just heard about. No, of course not now, this is like what thirty forty years later, But nonetheless it's the same sort of thing here. But a lot of this stuff does originate quite honestly, in the science organizations within the government and the academics research organizations. But you still need the private sector to commercialize, not just the fund but also to commercialize because the talent and the skills that are required to build these
companies don't exist in government. In fact, I would never let government do it if I had an opinion on that subject, because that's not what they do. So we created these things we call road weather laboratories that actually will take what we're not talking about and drive the commercialization phase.
So to that point, I've been wondering what the cycle, I don't know what to call it, like the cycle of AI or the cycle of AI chips, Like, what what does that look like?
Is it short? Is a long?
How does that affect the private the private money coming in?
Well, give you a sense.
Historically, that's technology cycle. If I take you back fifty years is fifteen to twenty years. So go back to the mainframe mainframe, to the client server PC. Any clients ever precede the cloud, they were fifteen to twenty year cycles. They started slower, Televisions, phones all started slower. Today with Jenner the AI, it is like on steroids relative to the pace of it. However, a lot of people argue that it's at the peak, even there's research out there that says we're peaking.
In the cycle.
So then what happens next and you hear it in the enterprise talking about we can't use the stuff it hallucinates.
That's an indication that this thing is peaking.
And maybe it's okay for music and poetry or marketing material, but you're not going to go defend the United States infrastructure with that kind of technology, or you're not going to have a bank and not deal a deal with fraud or cyber with that kind of technology. So my point being is this is where we are, but it's
going really really fast. Now the key, and we believe the key for it to really be adopted in enterprise, it's basically you have to deal with we will call them guardrails versus regulations room and we would argue that, and we do argue this that the right source for the regular is not the tech industry itself, because there are leaders in the tech industry and they're going to show up with an opinion which is a valid opinion,
but also it serves the hyperscalers. We would say that you really need to do who the users of the technology are to take the businesses the CEOs of these companies in healthcare, banking, government, whatever it happens to be, and let them come up with let them innovative the technology, but regulate the use cases the application, regulate the use of the data, regulate the privacy, establish the guard rails so that people are protected in their privacy and their
data is protected, both the consumer as well as the enterprise.
That should be done by the enterprises.
Look, I was in the tech industry for forty years, not by me or my counterparts.
All right, Sam, great conversation. I really appreciate you being here today.
Sam pal Masano, former CEO over at IBM, and of course now helping to shepherd that effort of that public private partnership to further our technological advancement here in the US.