Weapons traitor to Digital Technology has become both a tool and weapon. Its great all kinds of benefits but all kinds of challenges as well and where to grapple with both sides to that equation. Host your book is essentially a world tour that begins in quincy, washington. Why there . Guest my coauthor and i chose quincy because its one of the data center capitals of the world. Its near the columbia river. Data centers are being built there because its close to hydroelectric power that is both cheap and clean. We take the reader on a tour of what is really becoming the infrastructure of the 21st century. These mammoth buildings, more than 20, filled with electrical generators, hundreds, thousans of batteries but mostly server computers. Everything we do. Almost every day is accessing or storing our data in the cloud which really means one of these data centers. Host you have 100 of these in 20 countries . Guest more than 20 countries come with an 100 data centers. Microsoft is one of the largest but Companies Like google, amazon, facebook, apple are all building more and more of these data centers. Its where we are all storing our data. They become among other things the Largest Consumer of electricity in the world. Host if i sent an email from Microsoft Outlook here at the office to somebody at the office, does it have to go through that data center . Guest it doesnt have to. You can still use our software in a form where you stored on your own laptop or run on your own server computer in your Office Button the world has moved to the cloud over the last decade. Its far cheaper. Its more secure. You are was going at the latest technology. You will not have to upgrade it yourself. You can rely on microsoft cybersecurity came rather than those in your office. The world is shifting and most technology is moving in this direction. Host what does a cost to build one of those buildings that you say is about the size of two football fields . Guest anytime we openended data center by definition its an investment, hundreds of millions of dollars. If you look at microsoft, look at the other Industry Leaders collectively we are easily spending several tens of billions of dollars a year just in building these new buildings, connecting them electrically, putting all the computers inside them. Host what kind of investment to make in securing that cloud . Guest its a fascinating piece of this. Of course its enormously expensive. It starts with the physical security. You cannot get into the ground around these premises, the physical security is tighter than what youd see in a commercial airport but it surely the Network Security thats more important still. We spend 1 1 billion a year n new security features. Thats r d and innovation. We have 3000 security engineers, just the protection of this has become a huge priority. Host brad smith, you say you were searched on your way out of this facility as well tragic yes. Its fascinating because youre not surprised when you go into a data center and before you go into the intersect in so to speak, the room with the computers, the servers, you have to go through a second very tight airport style metal detector. But then your searched when you leave as well. Why am i being searched when a leave . It so no one can walk out with a hard drive. Literally the only way to hard drives leave that rim at the end of their life is by first going through what is a huge machine, its the equivalent of a Paper Shredder but this is literally metal hard drives and then it leaves to its own special exit. Host you write in your book, tools and weapons, tt ireland is too dated what switzerland is to money. What do you mean . Guest island is a great place to store data, twitchell it is generally across europe, the middle east, around the world in many ways as a safe place to store money. Its secure. Ireland first of all its a great place to build data centers. The temperature is mild. You dont typically have to turn on the heating or the airconditioning. It uses less electricity as a result. But more than that what we really mean is it has a network of laws that protect privacy, that protect data. It is a stable government. Its part of the European Union so it has access to the rest of the eu for moving data back and forth. Its one of the worlds most attractive places to store data. Host but its an islet as well. Dont you need cables to connect . Guest that is a fascinating part of the story as well. The Irish Government has long had a lot of foresight i would say when it comes to planning for its economy and thinking about technology. The american tech sector sort of got started in ireland in the 1980s. Its for what everybody manufactured their evs back then. As we got close to 2000, the Irish Government came to us, the United States, they saw the teach ins and make island the place to build a data center. We said but you dont have cables to move data to the continent. They said give us three months. We will go solve that problem. Three months later they had. They came back. They entered into a contract and the cable was just about to be laid, and the rest is history because i havent really has become a place where by our calculations about 35 of all European Data is stored in ireland. Host whats the advantage of having these Data Security locations, these clouds as tools . Guest as tools they are really enabling businesses to do new things. First, perhaps it is driving down costs and enabling businesses and governments and others to rely on other peoples advanced security protection. Fundamentally what all of this is doing is enabling people to use technology in new ways. We really have entered a new era. Its an ai or artificial intelligencebased era. If you think back to the first half of the 20th century, the Combustion Engine changed everything. The car, the tractor, the truck, the tank, the airplane. Over the next three decades andd i will have a similar impact. Its already making it possible for machines to understand speech, what people say. Vision, to understand peoples faces come to recognize people, to translate between languages. All of that is based on several things but perhaps the most important is this large amount of competition power, a data storage in the cloud, meaning these data centers. Host also in your book tools and weapons talk about the weaponization of data, which is what . Guest i would say it starts with cyber attacks. It starts with hacking by organized crime. It started now these days unfortunately with hacking by nationstates, hacking of political candidates, of campaigns, think tanks and the like. It includes disinformation campaigns. It includes the potential hacking of voting and elections. It includes a variety of other challenges that mean that the weapons per se but when we think of the impact of all of this technology on our jobs, what is going to mean for our people, our jobs, our children, their jobs . All of these are the challenges that technology has created. Host that takes us on our tour to north korea, russia and china, doesnt it . Guest it absolutely does as well as iran. We are seeing certain governments around the world being particularly aggressive. We measure this everyday. We see the attacks that are taking place. We have been public in saying that we seem the most attacks over the last few years coming from russia, north korea and iran, especially attacks that tend to be more focused on our civilian infrastructure or on our electoral processes in particular. Host what is microsofts business interest when it comes to china . Guest we want to serve our customers when they do business in china. China is not as large a market for us as it is for some of the Tech Companies. China has 18 of the world people. It accounts for 1. 8 of our revenue. But if an American Company wants to go to china to sell coffee, we want it to be able to use our services in china the same way it does everywhere else. If there are consumers in china who want to use windows on their laptops, office to write the documents, to send her email, we want them to be able to do that. So we want to participate in that economy. We want to participate in the Global Economy in a thoughtful way, in a way that actually is focused on u. S. National security and the protection of human rights, but also serving people who in our view need to be served. Host but in tools and weapons to talk about the fact that microsoft doesnt judge the nation on which human rights score, correct . Guest before we open a data center in a new country we evaluate many things. Do we have access to electricity, to water that is being needed for data center . Do we have concerns about corruption risk and the like . We evaluate human rights. We use that human rights evaluation to make decisions. There are some countries where we wont place a data center because we feel that once the data is in that country, we cant protect peoples rights the way they need to be protected. Theres other countries where we will put data. This is china as one of them, we wont put our consumer services. We have, for example, a Consumer Email service. Com is the current name. We dont offer it in china because we dont feel we can strike the balance we want to strike in terms of protecting human rights. Host with china moving towards the social Credit System that theyre having, are we in danger of perhaps having two world wide web, to make internets separate . Guest i think over the past decade there has been a train in that direction. I think that one sees to let countries in the world today that tend to be producing the most tech leaders. Its the United States and it is china. Use less American Technology in china. You see less Chinese Technology in the United States. Use different laws, different public policies, to some degree even some distinctions and business practices. Then you see competition especially in places like europe as a decide where theyre going to buy, who they are going to buy from. Host brad smith, you call for regulation in this book, and, in fact, bill gates in his forward points out the anomaly of the Business Leader calling for more regulation. But you are writing that you need that, comes you need to he that regulation. Guest i think we need two things. We need businesses in the tech sector to step up, exercise more selfregulation and her commitment to responsibility. But we do think we do need more regulation of technology. Think about how we live our lives. If you go to the Grocery Store and pick something up off the shelf, you will read the nutrition label knowing it standardized and accurate because of regulation. The zika over to the Pharmacy Department and buy a product, you dont worry about the safety of it because its regulated. When you get in your car it complies with certain Safety Standards the same is true of an airplane. We think them customers and even industry itself would be better served for the longterm with the different balance. Host that takes its washington d. C. Because bill gates took pride in fact, microsoft did that have a d. C. Office for a long time. Guest and he points out in this 40 did take pride in that and then he learned that there were probably some Better Things, there were clearly Better Things in which you could take pride, and we are here today. We are in actually 56 capitals around the world. Host you conclude your book Pricing Technology innovation is good not going to slow down the work to manage it needs to speed up. Guest we really do believe that governments need to speed up. I used to come to washington, and people 15 years ago here didnt understand technology deeply. I think many times today they often do. They understand much better and to some degree politicians get a bad rap. I think journalists look for the opportunity to point out, heres a politician who didnt ask the right question, or heres a politician who didnt ask the question the right way. I think thats frankly a mistake. I dont think its accurate. I dont think you serve anybody well whenever you criticize them for asking a good question the wrong way. The truth is we have regulators and politicians today have figured out how to regulate very complex pharmaceutical products. We have people today that regulate airplanes, that are basically computers with wings. They regulate the Safety Standards for cars. They are basically computers on wheels. We have people who are perfectly capable in washington, d. C. Of regulating computers that dont move at all. They sit in a data center, and i think as a country, as a world we need to strike a balance with a healthy dose of regulation. Host when it comes to privacy what would microsoft like . Guest we would like to see a Strong National privacy law in the United States. We have been advocating for that. That. Ive personally been advocating for that since 2005. You can feel the impact with that in washington, d. C. On that issue over the course of a decade and a half, we think its a good thing that california adopted the strong privacy law last year. We think its a good thing that is now bringing the debate washington, d. C. Washington, d. C. I think that the american public, consumers, customers can even Tech Companies will be well served if theres a good privacy law, a strong privacy law in the United States. I think for the next decade what we really need is more of a global privacy compact. Data moves around the world. You dont actually want the protection of peoples privacy to constantly change every time data crosses the border and we will only get that would bring governments together. Host what do you think of the european gdpr . Guest on balance were pretty enthusiastic about it. We have long been more enthusiastic about it than most companies in the tech sector. Host is that because you do Different Things . Guest i think to some degree you could say maybe do some Different Things. We are not as focus on monetizing data through behavioral advertising and the like, but i think it reflects her own experience with laws, regulation, the antitrust cases that we learn from when unfolded in the 1990s and the early 2000s. I think in some respects it reflects a belief that a market will work best and the companies that participate in it will succeed the most for the longterm if consumers have confidence. Host whats the current status of International Cooperation on these issues . Guest there are signs of progress and a lot of headwinds. You see signs of progress on cybersecurity, on issues like digital safety. Weve seen some really impressive leadership last you by the french government. Issue by new zealand Prime Minister in the wake of the christchurch terrorist attack to bring companies and governments around the world to advance digital safety. That is creating a model that we can look to more broadly. But, of course, were also living in a time and multilateralism is less popular, certainly less popular in the United States than perhaps any time since the 1930s. In part, our book is a call for governments coming together with companies, with Civil Society and a multistakeholder approach. We just dont see any other effective alternative for addressing the challenges people care about. Host christchurch, new zealand, takes apart in your book as well. Guest it does. By coincidence really we were in newbies on 12 days after the christchurch attack. During the course of the day the Prime Minister reached out. We hurt you want to meet with us so of course we did. It was a fascinating conversation. She said look, i just dont want to see what happened in christchurch repeated. What happened there was different from other terrorist attacks because the attacker really used the internet as the stage. It was streamed live on facebook. It was uploaded probably millions of times on youtube. Its the kind of thing that actually can incentivize terrorism if we are not careful. So we said lets see what we can do together and really thanks to her leadership more than in single thing, she got on the phone. She called other tech leaders. We worked with others across the tech sector and it led to what is now called the christchurch call. It was signed in paris. I send their by september at the yuan there were more than 50 governments the signed it. But it has facebook, youtube, amazon, twitter, microsoft, and with all committed to take now some concrete steps that make it harder for any terrorist to do is done in christchurch. Host how often do you find yourself and this is something you write about, working with the federal government and or suing the federal government . Guest well, we work with the federal government everyday and we probably sue the federal government on average every year. Thats the balance and, of course, once a lawsuit store just to continue it. We never sue our own government without a lot of thought and without deleting a real principle is at stake. But we have be leaving a real principle is at stake. During the last couple of years as well as to stand up for our employees who are protected by daca. With 66 employees who are dreamers and so we thought that was another important case to bring so we did so. Host when it comes to privacy once one of the cases you have pursued . Guest most of the privacy cases we pursued have been about getting people, businesses or individuals more knowledge or information about when the government is needing their data. This star